It has been more than two months since the Consumer Financial Protection Bureau (CFPB)'s TILA-RESPA Integrated Disclosure (TRID) Rule, or the "Know Before You Owe" mortgage rule, went into effect. DS News recently spoke with Brian Benson, CEO of ClosingCorp, a closing cost solutions provider based in San Diego, about how his company is adjusting to the implementation of TRID.
Has the TRID rollout been smooth overall for your company or has it been a challenge?
As smooth as can be expected, given the complexity of TRID; the impact that it has had on long-standing business practices, many of which were turned on their ears; and the need for an enormous amount of coordination and education for all parties. Over the past year, probably 25 percent our team’s time has been devoted to TRID-related topics.
TRID compliance hinges on the availability of information at an exact time and place, and in very nuanced detailed forms required by regulators, which required enormous coordination and education for all parties. I’m very proud of the positive feedback we’ve received from clients and partners who have leaned heavily upon us to help them through this process. It keeps us very, very busy. But we love it.
What are some of the major TRID compliance issues you have experienced or heard about from clients?
The TRID rule creates hundreds of data points to be included in the disclosure documents, then checked and verified to ensure compliance. Accurate fees are critical because there is 'zero tolerance' for services that prohibit the borrower to shop elsewhere while others fall into a 10 percent tolerance bucket. Failing to properly disclose changes in fees could result in the lender paying the borrower for differences—not to mention the administrative burden of managing the payout process. Ensuring accuracy is a challenge because there is no standardization and fees are very fluid.
While collaboration portals can help by manually sorting through the differences, they require significant human capital to do so. The costs can be very expensive, and those costs can’t help but be passed on to the consumer. In addition, title operations departments are being forced to (attempt to) learn a multitude of platforms to meet lender demands. We help our clients manage and automate this process. Also, the response to our Compliance Guarantee has been very strong as lenders and vendors discover how difficult it is to meet fee compliance detail requirements.
Do you see TRID compliance becoming less or more of an issue over the next year, and why?
TRID compliance will continue to be a focal point for the foreseeable future because it is forcing change to the way things have been done for decades. 2016 will focus on how all players within the ecosystem can become more efficient while maintaining compliance—through detailed workflow with documented rules of engagement. But eventually new systems, approaches and experience will make TRID compliance simply business as usual.