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Volume 27 - Number 13

June 27, 2016

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Life Under TRID: Regulators’ Good-Faith Enforcement Period is Evolving

Given the high stakes associated with the CFPB’s Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure Rule, commonly known as TRID, the mortgage lending industry perhaps can be forgiven for being hyper-sensitive to minute, incremental change, whether it be another clarifying rulemaking or a change in enforcement. Sometimes, these developments could be a matter of perception or semantics; at other times, facts on the ground may actually be changing. “Uncertainty about enforcement on TRID mirrors the uncertainty on the rule itself. TRID has been an extremely complex regulation for the industry to implement,” American Land Title Association CEO Michelle Korsmo told Inside the CFPB. “ALTA has continuously encouraged the CFPB to provide more written guidance on the 1,888-page ...

CFPB Expected to Codify Informal TRID Guidance. Will it Go Further?

There is plenty of speculation in the mortgage industry these days about which issues are going to be addressed in the CFPB’s pending proposed rule to clarify many of the uncertainties associated with its Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure Rule, commonly known as TRID. During a panel discussion at the American Bankers Association’s annual regulatory compliance conference in San Diego earlier this month, Rodrigo Alba, senior vice president and senior regulatory counsel with the ABA, speculated that one of the main areas the bureau will address is the codification of the informal guidance CFPB officials have provided since the rule was released. As he sees it, the bureau will take all of the content and ...

SFIG Issues TRID Compliance Review Documentation

Late last week, the Structured Finance Industry Group, a securitization trade association, put out its long-awaited compliance review documentation related to the CFPB’s integrated disclosure rule under the Truth in Lending Act and the Real Estate Settlement Procedures Act. SFIG said its RMBS 3.0 TRID Compliance Review Scope documentation was put together by representatives of third-party review firms across the industry and its own RMBS 3.0 Due Diligence, Data and Disclosure Working Group. The material addresses TRID compliance issues on non-agency mortgages uncovered during reviews by due diligence providers. Under the standards, loans that would have received grades of C or D due to TRID exceptions can sometimes receive B grades if errors are corrected. The document was created to ...

Compliance Pros Provide Tips On How to Test for TRID

Mortgage lenders throughout the land are justifiably anxious about complying with the CFPB’s TRID integrated disclosure rule. But compliance professionals at Treliant Risk Advisors recently provided a number of key checkpoints that lenders can use to prepare themselves and examine their own degree of compliance. During a presentation at the American Bankers Association’s recent regulatory compliance conference in San Diego, Lyn Farrell, a managing director at Treliant, rattled off a list of TRID technical compliance testing criteria for attendees. First, lenders should “ensure that the testing scope includes all covered products from all applicable channels,” Farrell said. They also should check that their institution provides all disclosures by the appropriate deadlines, including, of course, all loan estimates and closing disclosures....

Bureau Faults Mortgage Servicers For Using Failed Technology

A special edition of the CFPB’s supervision highlights report issued last week claims that some mortgage servicers continue to use failed technology that has already harmed consumers, putting such firms in violation of the agency’s servicing rules, which were released in 2013. “Mortgage servicers can’t hide behind their bad computer systems or outdated technology. There are no excuses for not following federal rules,” said CFPB Director Richard Cordray. “Mortgage servicers and their service providers must step up and make the investments necessary to do their jobs properly and legally.” The bureau acknowledged that some servicers have made significant improvements in the last several years, partly by enhancing and monitoring their service platforms, staff training, coding accuracy and auditing, and allowing ...

Fair Lending Focus Shifting to Access to Credit, Pricing Issues

Mortgage lenders looking to get ahead of the fair lending enforcement curve need to be aware that the industry will face greater scrutiny from the CFPB on two main fronts: access to credit and pricing issues, according to one top attorney. Speaking at the American Bankers Association’s recent regulatory compliance conference in San Diego, Andrew Sandler, chairman and executive partner at the BuckleySandler law firm in Washington, DC, said, “There are really two sets of issues that we’re seeing in fair lending, and that we’re increasingly going to see over time. The first is access to credit as an absolute concept.” As the U.S. came out of the financial crisis, as policymakers adopted all kinds of rules, regulations, philosophies and ...

CFPB Issues Updated Mortgage Servicing Examination Manual

In an effort to spur better industry compliance with its 2013 mortgage servicing rules, the CFPB last week released an updated mortgage servicing exam manual, reflecting a greater emphasis on the handling of consumer complaints as well as fair lending. The bureau regularly publishes a mortgage servicing chapter of the CFPB Supervision and Examination Manual to reflect regulatory changes, to make technical corrections, and to update examination priorities. This new, third iteration of its exam procedures offers guidance to financial institutions and mortgage companies on what the bureau will be looking for in its exams. Among other things, mortgage servicers should note a greater emphasis in exams on the handling of consumer complaints. The CFPB has enhanced the section related ...

Compliance Pro Shares Tips On Prepping for a CFPB Exam

If you’re a mortgage lender waiting for your first examination from the CFPB, there are three important principles you should be aware of, according to Burton Embry, executive vice president and chief compliance officer of Primary Residential Mortgage, based in Salt Lake City, UT. Delivering a presentation during a webinar sponsored by the California Mortgage Bankers Association last week, Embry began with the obvious: Consumer protection. “One of the CFPB’s big focuses is on consumers. It’s all about consumer protection, we all know that,” he said. “So when they are looking at your policies and procedures, for example, that’s one of the things they are looking at: the risk to consumers.” In other words, “How have you written your policies ...

Other News In Brief

CFPB Moves to Defend its Supervisory Information in Ocwen Case. The CFPB recently asked a federal judge to let it intervene in a whistleblower case brought against Ocwen Loan Servicing in order to protect the confidentiality of its supervisory information. “The bureau seeks to intervene for the limited purpose of invoking the bank examination privilege and the bureau’s regulations to protect confidential and privileged bureau supervisory records and information related to the bureau’s supervision of Ocwen,” the CFPB said in its motion filed in U.S. District Court for the Eastern District of Texas, Sherman Division. Among its legal arguments provided to U.S. District Judge Amos Mazzant, the CFPB said its regulatory and supervisory interest could be impaired if it is ...

Capitol Hill Update

CFPB Firmly in CHOICE Act’s Crosshairs. Since Inside the CFPB went to press last, House Financial Services Committee Chairman Jeb Hensarling, R-TX, released more details about the Republican alternative to replace the Dodd-Frank Act. Dubbed the Financial CHOICE (Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs) Act, the bill not only includes provisions to provide a qualified-mortgage safe harbor for any mortgage that has been held in portfolio by a depository institution since origination, but also a host of provisions targeting the structure of the CFPB itself. For instance, the bill could change the name of the CFPB to the “Consumer Financial Opportunity Commission (CFOC),” and task it with the dual mission of consumer protection and competitive markets, with ...

Poll

What is the very best source of new mortgage customers for your lending shop? (Choose one only.)

Leads provided to me by employer

13%

Paid internet/website leads

9%

Real estate agents/Realtors

31%

Homebuilders

6%

Our existing customer base/our servicing customers

19%

My own personal sales "leads" database

13%

Other

9%

Housing Pulse