TRID: Smoke or Fire?
Where there is smoke, there is fire, right? Or is there? To give you a quick snapshot, on October 3rd, 2015 the Consumer Financial Protection Bureau (CFPB) officially launched its TILA-RESPA Integrated Disclosure (TRID) Rule. It is a rule that the CFPB has created in order to consolidate four existing disclosures required under the Truth in Lending Act (TILA) and the Real Estimate Settlement Procedures Act (RESPA) for closed-end transactions into two forms: a Loan Estimate that must be delivered no later than the third business day after application, and a Closing Disclosure that must be provided to the consumer at least three business days prior to closing.
For all the smoke and panic surrounding the implementation of TRID in October, early indications are that TRID may not be the firestorm the mortgage industry was anticipating. Mortgage applications have been a rollercoaster ride in the run-up and aftermath of the implementation with applications surging in a pre-TRID rush more than 25% in the week leading up to TRID followed the next week by dropping down 25% due to the uncertainty of TRID. Yet, by the end of the second week applications were back up by almost 12% with more modest increases being projected bringing mortgage applications back to normal expectations.
Was the industry ready for TRID? Opinions on the matter vary and most are on the pessimistic side especially when it comes to technology and the loan origination platforms readiness. Yet, loans are still being closed and as we move forward technology and systems will continue to improve along with workflow processes. To put in perspective, the rule was 3 years in the making, almost 1900 pages long and the biggest change in the mortgage industry in the past 30 years. If we didn’t think there would be bugs, well then shame on us but it was to be expected and we’re still here. In the end, the rule will do the job it set out to do which is ‘everyone wins’. It forces transparency between lenders and the consumer. It will aid consumer understanding and simplify the process so that the consumer knows exactly what they are signing up for and I’m all for it. No fire here!
Written by: Marc Cabe
Published: 12/10/2015