Earnings season has begun, and among the biggest financial institutions and mortgage lenders that have reported thus far, there’s been little evidence of damage to the bottom line as a result of the Consumer Financial Protection Bureau’s integrated disclosure rule known as TRID. At top-ranked Wells Fargo, total loan production for the fourth quarter was $47 billion, versus $55 billion in the third quarter, and $44 billion in the fourth quarter of 2014, something Chairman and CEO John Stumpf attributed to seasonality as well as TRID. During an earnings-related conference call with investors last week, Stumpf was asked...

By now the word is out: Certain unnamed secondary market investors are turning away mortgages because of compliance errors, expressing the opinion they do not want to be on the “liability hook” for any origination errors under the new integrated disclosure rule known as TRID. The Mortgage Bankers Association recently singled out a jumbo investor that’s been rejecting 100 percent of the loans offered by originators. The trade group declined to identify the investor, but other ...

FHA lenders are uneasy over whether issues raised by the Consumer Financial Protection Bureau’s new integrated disclosure rules could affect FHA lending. Although the issues cited by lenders are not FHA issues per se, these lenders are concerned that such uncertainties may cause problems for their FHA business, according to mortgage industry consultant Brian Chappelle, a principal at Potomac Partners. For example if a lender cures a mistake and the cure results in a reimbursement of, say, $100 to the borrower at closing, would that be considered a violation of the Department of Housing and Urban Development’s minimum 3.5 percent cash-investment requirement for FHA loans. “I don’t think it is a violation, but lenders are worried about how HUD might interpret it,” said Chappelle. “It is well after closing and it is obviously not a gift given to the borrower. It is ...

A significant amount of mortgage originations that were set to be completed before the end of 2015 were pushed into early 2016, according to industry analysts. The closing issues could be related to the Consumer Financial Protection Bureau’s “TRID” integrated disclosure rule, with first quarter production expected to see a boost as lenders adjust to the new requirements. Late this week, JPMorgan Chase offered the first look at origination trends for major lenders ...

CFPB Director Richard Cordray issued a letter to the mortgage industry over the holidays related to the TRID integrated disclosure rule, clarifying that the new rule includes a provision to “cure” certain mistakes, even after the fact. “The Know Before You Owe mortgage disclosure rule provides for the issuance of a corrected closing disclosure, even after closing,” Cordray said in a letter to Mortgage Bankers Association President and CEO David Stevens. “This can be used, for example, to correct non-numerical clerical errors or as a component of curing any violations of the monetary tolerance limits, if they exist. “As a general matter, consistent with existing Truth in Lending Act principles, liability for statutory and class action damages would be assessed ...

The latest Campbell Surveys/Inside Mortgage Finance HousingPulse survey provides further anecdotal evidence to support the claim that the TRID rule is in fact contributing to delays in closing mortgages. “TRID rules caused delay of about 10 days,” thanks to “new processes for title and lender,” said one real estate agent in California. Another in North Carolina said, “Lenders do not communicate well with real estate agents. With TRID now in effect, I feel like I am flying blind trying to organize, coordinate and keep things on track.” A third in New Hampshire noted, “We had four more closings expected to close in November but are delayed due to TRID. Some had 60-day closing dates and have been extended up to ...

Initial mortgage lending industry anxieties that the CFPB’s integrated disclosure rule might cause problems on the secondary market are being borne out, at least on an anecdotal level, a number of industry officials and participants indicate. Mortgage Bankers Association President and CEO David Stevens last week rattled off a handful of such problems that have emerged since the TRID rule took effect Oct. 3, 2015. “For non-agency jumbo mortgages, there are some pretty significant kick-backs [of loans] from a couple of investors,” said Stevens. Part of it has to do with the due diligence firms that simply identify errors and some investors who have a zero tolerance for any error regardless of severity. “This does not apply to all,” Stevens ...

Some private investors are skittish about purchasing loans in the new TRID environment because of the potentially huge, and largely unspecified, liability that purchasers face on the secondary market under the bureau’s new integrated disclosure rule, according to some top experts. “What we’re seeing now, unfortunately, is that private investors, securitizers and such, are being gun-shy,” said Richard Andreano, mortgage banking practice leader in the Washington, DC, office of the Ballard Spahr law firm, during a recent webinar sponsored by Inside Mortgage Finance, an affiliated publication. “Because what we have is the bureau made clear that there was some liability associated with the TRID rule, not only pre-existing Truth in Lending Act liability, but perhaps now some liability for Real ...

The Government Accountability Office heard a lot of industry talk about the negative effects of CFPB regulations on mortgage lending during its review of the impact of the Dodd-Frank Act, but found little data from regulators to support such claims so far, according to a new report issued by the government watchdog. “The results of surveys conducted by regulators, industry associations, and academics on the impact of the Dodd-Frank Act on small banks suggest that there have been moderate to minimal initial reductions in the availability of credit among those responding to the various surveys, and regulatory data to date have not confirmed a negative impact on mortgage lending,” said the GAO. Some community bank, credit union, and industry association ...

Technical Corrections to the TRID Made With No Fanfare. Over the holidays, the CFPB quietly made what it characterized as “non-substantial” technical corrections to its integrated mortgage disclosures final rule under the Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lending Act (Regulation Z). The November 2013 publication of the bureau’s TRID rule in the Federal Register resulted in “several unintended deletions of existing regulatory text from Reg. Z and the official interpretations (commentary) in the Code of Federal Regulations (CFR) and, in one case, the omission of regulatory language in the TRID from the CFR,” said the CFPB. To correct the CFR, the bureau republished the deleted and omitted text, consistent with the agency’s intent in ...