The Consumer Financial Protection Bureau is not proposing any additional cure provisions in its proposed rule to update and clarify certain aspects of its Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure rule, known as TRID. The TRID 2.0 proposed rule was released late last week. Former CFPB official Quyen Truong, now a partner in the Washington, DC, office of the Stroock & Stroock & Lavan LLP law firm, told...

Nonbank jumbo originators may soon find themselves at a pricing disadvantage to depositories thanks to recent events beyond their control: two jumbo conduits calling it quits and updated regulatory language that offers no comfort when it comes to curing “TRID” errors. Industry veteran Bill Dallas, who runs nonbank lender Skyline Home Loans, Calabasas, CA, put it bluntly, saying: “Banks appear to be the big jumbo winners – Union Bank and others.” He said jumbo production is a low-margin business but a necessity in California. The CEO noted...

As of press time, it’s not clear whether the Consumer Financial Protection Bureau will release its proposed rule clarifying certain aspects of its Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure Rule – TRID – before the end of July, the agency’s original timeframe. Joe Ventrone, vice president and deputy chief for regulatory affairs at the National Association of Realtors, said his organization is now looking at an August release and does not anticipate major changes. “However, the CFPB will put in writing all previous informal guidance [it has] given heretofore,” he said. “I think all the guidance will be important if it gives lenders and vendors comfort against enforcement reprisals.” NAR is...

The Consumer Financial Protection Bureau any day now could release its long-awaited regulation finalizing its proposed amendments to its 2013 mortgage servicing rules, posing yet another compliance challenge and requiring one more round of systems upgrades from the industry as a result. According to a consensus of industry experts, the two biggest subject areas have to do with bankruptcy proceedings and successors in interest. “On the eve of the servicing rules taking effect, the bureau made...

The secondary market for mortgages with TRID mortgage-disclosure errors has stayed fairly constant the past few months, but there are new signs the business is getting a bit long in the tooth. According to interviews with investors and brokerage firms involved in the scratch-and-dent market, the auction of mortgages with disclosure problems (of all varying degrees) continues, but fewer sales are closing. Mid America Mortgage, Addison, TX, one of the most active buyers in the space, said...

A mortgage industry group wants to turn the TRID disclosure tables back on the regulators and reveal to homebuyers all the fees – including those imposed by the government – they have to pay for their home purchases, and not just those generated by the industry. The mortgage broker organization known as NAMB – The Association of Mortgage Professionals wants the CFPB and the Federal Housing Finance Agency to further clarify the TILA/RESPA Integrated Disclosure Rule by including a new line item that clearly states the “hidden” guarantee-fees and loan- level price adjustments from Fannie Mae and Freddie Mac. [However, it should be noted that the FHFA has no authorities under the Truth in Lending Act nor the Real Estate Settlement Procedures Act.] ...

Secondary market participants’ reluctance to invest in mortgages out of fear of liability from the loans being originated with TRID errors seems misplaced or overblown, a new report from Moody’s Investors Service suggests. Violations of the CFPB’s integrated-disclosure rule will not notably increase losses in prime jumbo residential mortgage-backed securities, according to a recent analysis by the ratings service.As Moody’s sees it, TRID violations in prime jumbo RMBS will be minimal and often curable. “Prime jumbo RMBS exposure to loans that violate TRID will largely be kept in check thanks to third-party due diligence reviews,” Moody’s said. On top of that, lenders and aggregators will be able to correct most TRID violations before issuers place the affected mortgages in ...

Fitch Ratings recently updated its U.S. residential mortgage-backed securities rating criteria, partly to include adjustments to due diligence grades having to do with the CFPB’s Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosure rule, otherwise known as TRID. Fitch said it expects that participating third-party due-diligence review firms will determine whether mortgages being reviewed for inclusion in MBS have been closed in compliance with the disclosure rule. Further, the ratings service said it would request that due diligence firms grading loans determine whether the findings are more likely to carry statutory damages and assignee liability or just assignee liability. When it comes to grading TRID loans under the revised criteria, Fitch said unresolved errors that carry an increased ...

The TRID ‘Scratch & Dent’ Market is Still Humming Along, But…. The secondary market for mortgages with TRID errors is still alive and well with more product hitting the market in June than May, according to one active investor. Michael Lima, managing director of whole loan trades for Mid America Mortgage, reported his firm was involved in 82 TRID bids in June compared to 35 in May. Mid America has been one of the most active buyers of such product. But Mid America is quick to point out that even though there were more auctions, it won a smaller percentage of the bids: a 78 percent win rate in May compared to just 32 percent in June. “This could imply ...

The concerns among participants in the jumbo MBS market regarding the TILA-RESPA Integrated Disclosure rule might have been much ado about nothing. A new report from Moody’s Investors Service suggests that TRID violations won’t materially increase losses in jumbo MBS. The rating service said third-party due diligence reviews will identify loans in violation of TRID, and lenders and aggregators will be able to cure many TRID violations before the mortgages are placed in jumbo MBS. Three jumbo MBS have included...