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Since the announcement of the new TRID rules, lenders have been working to integrate the use of the two new forms and comply with the requirements for information and fee disclosure.
With actual implementation has come a myriad of challenges and problems reported by lenders and closing agents which have been blamed for consumer confusion, increased loan costs, closing delays and delivery rejections by the secondary markets.
Why? What is so different and difficult about these new TRID rules that they result in such major problems? Lenders have been providing estimates of charges and rates, with supporting details, for quite some time. Closing agents have handled a myriad of closings for different lenders for the past 50 years. The information hasn’t changed. It’s still a mortgage loan. The closing is still between a buyer and seller (unless a refinance). So what’s the big deal?
I have a tendency to put most things into a sports perspective. I believe TRID forces lenders and closing agents to change their strategy. We’re coming up on March Madness, my favorite time of the year. College basketball teams battle it out for the sole purpose of being number one. They play some teams with which they are familiar and others they only know from scouting reports. Coaching and planning are key.
Each team needs to develop a plan for each game and then execute on that plan. Each game and game plan is different. It’s not necessarily the best team that always wins. The team that plays together, plans, practices and executes has the best chance of winning.
It’s a team effort that must encompass all of these elements with one more factor. They must have the ability to adjust when needed and depending on circumstances.
TRID requires that lenders and closing agents re-think their strategy and process. Like a basketball team that plans and practices to play a man-to-man defense that isn’t stopping their opponent from scoring needs to switch off and play a zone defense, or maybe some hybrid, to stay in the game. Lenders and closing agents need to change how they approach their business process to handle the new TRID rules. New requirements, new rules, new strategy.
Everybody needs to be on the same page. Originators, support staff, and closing agents all working together toward achieving the final goal; an on-time closing of a quality, compliant loan.
It’s up to each entity to identify where and when changes are needed and what adjustments need to be made. Educate staff and implement procedure to accomplish what needs to get to done to achieve your goal.
I believe that the CFPB is not going to change the TRID rule anytime soon to help lenders and/or closing agents address and/or correct all the problems being reported today. Lenders and closing agents need to adjust their strategy and process to meet the new TRID requirements. Evaluate the challenges and implement new plans and procedures to alleviate the problems. For every problem there is a solution; you just need to find it.
The game has changed. Play different.
