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...

Fitch Ratings published updated criteria this week for rating residential MBS. The new criteria include adjustments to due diligence grades relating to the Truth in Lending Act/Real Estate Settlement Procedures Act disclosure rule and evaluations of firms serving as a deal agent. Fitch said the new criteria include a “realignment” of items that prompt C grades and D grades on mortgages reviewed by third-party due diligence firms. The changes incorporate the Structured Finance Industry Group’s recently issued RMBS 3.0 TRID Compliance Review. The rating service acknowledged...

Given the extensive and uncertain administrative, civil and contractual liabilities mortgage lenders are confronted with under the new TRID disclosure regime, anxiety about the inevitable mistakes that will occur remain high. But there are a few remedies available to lenders. During a presentation at the recent American Bankers Association regulatory compliance conference in San Diego, Rich Horn, founding attorney at Rich Horn Legal in Washington, DC, spelled out just what options exist for mortgage lenders to “cure” loans with defects under the Consumer Financial Protection Bureau’s integrated-disclosure rule. “If you have liability for a TRID violation, how do...

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 ...

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 ...

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 ...