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Is it a grace period or not? That is the big question surrounding the very recent CFPB letter on post TRID implementation enforcement actions. Although CFPB has announced it will be sensitive to lenders that make a “good faith” effort to comply with the new rules, they do not go as far as to say there will be no enforcement action on violations after the August 1 TRID implementation date.
Lenders better get ready to use the new forms and comply with the new rules with applications taken as of 8/1. Don’t be lulled into a false sense of security.
Industry groups are claiming a victory over the statement by CFPB to be “sensitive” in their potential TRID enforcement actions. So far, no one has defined “good faith”. CFPB has not granted a formal forbearance on enforcement actions.
They say when reviewing potential violations they will take into account and consideration the lender’s efforts toward preparation and compliance. If they decide these were not sufficient to protect the consumer, there may be some enforcement action. What that may be and how severe it is will depend on the violation and the level of “good faith” efforts put forth by the lender. I suggest you do everything you can to avoid being put in that position.
Loading ...As it now stands, lenders need to be ready to comply with the new TRID rules. They should also document their efforts toward their preparedness for compliance. This may prove to be helpful in the event of a problem which could result in a violation, and potential for enforcement.
Lenders also need to ensure staff is trained in the new rules and in the processes for compliance as CFPB may decide to interview them to help them determine the lender’s “good faith” efforts.
Keep in mind that any audits involving TRID compliance will not come for quite some time as CFPB needs to ready their staff and also wait until lenders have a critical mass of new TRID loans for a viable audit.
The wild card is the potential for consumer actions brought against lenders for any failures to comply with the new rules. Any such action will be decided by the courts, not CFPB.
The answer (if there is one) is to be ready for TRID when it comes. Don’t rely on CFPB or the courts, for leniency or forbearance. You may not like the results.
The game is changing; be prepared to play different.
