Heading into 2016, the majority of the mortgage industry is still struggling to comply with the CFPB's Know Before You Owe mortgage rule, or the TILA-RESPA Integrated Disclosure Rule, commonly known as TRID. The rule went into effect on October 3 after a two-month delay from its intended effective date of August 1 due to an administrative error by the CFPB. The rule is designed to integrate four old disclosure form with two new ones, the Loan Estimate and the Closing Disclosure, which the CFPB says will be easier to understand and use for lenders, settlement agents, and consumers.
Lenders have expressed concern the implementation of TRID due to the elevated risk environment the rule presents, since lenders are responsible for the timing, completeness, and accuracy of the closing disclosure and the CFPB has shown a tendency to penalize businesses millions of dollars for breaking the law. A report by Moody's Analytics in mid-December found that 90 percent of recent mortgage loans contained TRID violations, showing the lenders are still struggling to comply with the rule two-and-a-half months after its effective date.
The CFPB generated more controversy in June when it added complaint narratives to its consumer complaint database, publishing 8,000 narratives for the first time. The CFPB says the narratives will push companies toward improving the quality of their products and services, however, some expressed concern that the narratives contain unverified information from disgruntled individuals that may damage a company's reputation. In April, the Five Star Institute and Black Knight Financial Services released a white paper aimed to provide context and insight into complaints received by the CFPB by comparing the two predominant mortgage complaint categories, servicing and default, with loan trends.