TRID: Resources and Program Proposal for Compliance

Small and large businesses alike are grappling to update their business models and software to be in compliance with the upcoming implementation of the TILA-RESPA Integrated Disclosure (TRID) rule effective on August 1, 2015.

Four different rules were consolidated into two to form the cornerstones of TRID. The RESPA Good Faith Estimate and Initial Truth-In Lending disclosure were combined to create the Loan Estimate form. RESPA HUD-1 and the Final Truth-In Lending Disclosure merged to form Closing Disclosure.

Loan Estimates must be hand-delivered or placed in the mail within three business days after an application is received. In contrast, Closing Disclosure must be given to the consumer “at least three business days prior to consummation,” according to the Consumer Finance Protection Bureau (CFPB). Consummation is defined as the moment a consumer is considered contractually obligated on a credit transaction.

With Closing Disclosure, numerous variables will require a three business day waiting period. These variables include the addition of a prepayment penalty, changes in loan products, and inaccuracies in disclosed APRs. Currently, detailed explanations of each section of both the Closing Disclosure and Loan Estimate form are available on the CFPB’s website; sample forms are available online as well.

TRID will require updated software to accommodate the new fee disclosures. This update in technology systems is where many small businesses are struggling to remain compliant. Compliancy is largely contingent on access to updated software. The software used for mortgage lending must have the 3.3 version of Mortgage Industry Standards Maintenance Organization (MISMO) or higher. However, many loan origination systems (LOS) have yet to update their systems as it is a large overhaul, leaving some professionals in the industry struggling to adjust.

To allow time to adapt, the CFPB gave professionals affected by the rule almost two years to gain broader awareness, update systems, and train employees before implementing the rule on August 1, 2015. In addition, the CFPB released a host of free resources that included a series of educational webinars, a plain-language compliance guide for small businesses that lack the guidance of their own legal and/or compliance departments, readiness guide, and illustrated instructions on how to complete the new forms.

To better represent the voice of small businesses, Rep. Robert Pittenger (R-NC) and Rep. Heck (D-WA) introduced H.R. 1195—Bureau of Consumer Financial Protection Advisory Boards Act. Passage of the bill would establish a board of 15 to 20 members at the CFPB that will represent small businesses with an emphasis on women- and minority-owned small business concerns. Introduced on March 2, 2015, the bill has passed in House and is awaiting passage in the Senate.

Other organizations have joined the CFPB in releasing resources for those in the mortgage industry. The following organizations offer their own educational guides to aid in the successful implementation of TRID: Mortgage Banking Association (MBA), National Association of Federal Credit Unions (NAFCU), and American Land Title Association (ALTA).

Despite these resources, it does not change the fact that many small businesses simply cannot afford to reach compliancy with emerging regulations.

Many of the aforementioned organizations that provide educational guides charge hundreds of dollars and sometimes, even thousands which is not conducive for small businesses.

Although the CFPB has provided its free series of guides and webinars, these tools help to break down the dense language of TRID into easy-to-understand terms. The resources do not provide cost-effective methods or allocate funds to small businesses. Not only is TRID implementation costly but it requires hours upon hours of training for employees.

Many outside the realm of small businesses are having this realization as well. For example, members of Congress are creating their own pieces of legislation and appeals in hopes of delaying TRID and repercussions that may occur due to a lack of compliancy.

Most recently, Congressman Steve Pearce (R-NM) and Congressman Brad Sherman (D-CA) introduced H.R. 2213—a bill that will provide temporary legal protection from repercussions associated with TRID.

Given NAWRB’s advocacy for women-owned and minority women-owned small businesses specializing in the housing economy, NAWRB finds it critical to propose a free government assistance program that will help small business professionals within the housing economy navigate new compliance requirements that may arise. This will be a program to best assist small businesses year-round.

Although the U.S. Small Business Administration (SBA) provides resources for small businesses, there is currently no program that is explicitly designed for all facets of compliancy with impending regulatory issues such as training, budgeting, technological modifications, and business counseling.

Without a free government assistance program, small businesses may be forced to downsize and potentially lose their entire businesses as a result, leaving an untold amount of employees out of work.

There would be parameters to qualify for the proposed government assistance program. Participating businesses must meet the standards of ‘small business’ as defined by the SBA. In addition, a small business must qualify as a Small Disadvantaged Businesses (SDB) by SBA standards to prevent abuse of the program.

NAWRB CEO Desirée Patno is discussing the idea with representatives of the SBA and CFPB. So readers, what do you think of this potential program? Would your business benefit from such a program?

Let your voice be heard at media@www.nawrb.com.

List of FREE TRID Resources

CFPB
1. http://www.consumerfinance.gov/regulatory-implementation/tila-respa/ This link goes to a page that lists out all of the free resources they offer on TILA-RESPA (TRID). I was going to list out all of them but everything goes to the same webpage.

Integrated loan disclosure forms & samples
Compliance guide
Guide to forms
Disclosure timeline
Integrated loan disclosure forms & samples
Readiness Guide

Loan estimate
–Blank model loan estimate (with annotated fields to show rule citations)
-Sample of completed loan (estimate for fixed rate loan)

Closing disclosure
–Blank closing disclosure (with fields annotated to show rule citations)
-Blank closing disclosure (that illustrates disclosure provided to seller)
-Blank page 2 of closing disclosure (that illustrates modifications to closing cost details)
-Sample of the completed closing disclosure (4 examples, 4 other samples)

List of For-Purchase Resources

Mortgage Bankers Association (MBA)
1. TILA/RESPA Integrated Disclosure Resource Guide: https://www.mba.org/store/products/publications-and-guides/ce-tila/respa-integrated-disclosure-resource-guide

National Association of Federal Credit Unions (NAFCU)
1.Regulation and Compliance Resources (members-only): http://www.nafcu.org/complianceresources/

American Land Title Association (ALTA)
1.Comprehensive Resources: http://www.alta.org/cfpb/#wycd
2.TILA-RESPA Integrated Disclosures Training DVD: https://www.alta.org/portaltools/shopper/ProductDetail.cfm?ProdCompanyPassed=001&ProdCdPassed=001-TRID%20Training

Wolters Kluwer Financial Services
1. TILA-RESPA Resource Center: https://www.wolterskluwerfs.com/tila-respa/home.aspx
2.       TILA-RESPA Implementation Tool Kits: https://www.wolterskluwerfs.com/tila-respa/tool-kit-overview.aspx

DocMagic
1.Resources and Guides on Integrated Disclosures: https://www.docmagic.com/compliance/integrated-disclosures

TILARESPA.com, powered by Pavaso
1. TILA-RESPA Knowledge Center: http://www.tilarespa.com/

Some Updated Software Compliant with TRID
1. DocMagic: https://www.docmagic.com/
2. Smart Closer (formerly ProClose but recently rebranded): http://www.proclose.com/
3. PowerLender: https://www.powerlender.com/

To view the original article please see our magazine titled “Advancements for Women” Vol 4, Issue 3 by Clicking Here