Mortgage Compliance

Happy Birthday TRID

Happy-Birthday-TRID
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Happy-Birthday-TRIDWell, it’s finally here. Like it or not, TRID is born and for new loan applications taken, as of Saturday (10/3), lenders are required to follow the new rules. Mortgage lending may never be the same. Everybody sing and everybody dance…

For the past 18 months, lenders have been primping and prepping to be ready for the roll out of the 2 new required TRID disclosures. The industry is ready.

But, are they ready to handle the operational and cultural changes? More than just 2 new documents, the TRID rules present the basis for a major change in how mortgage lending is done. Lenders need to be more transparent in their lending process, disclosing just about everything about their loans, their process, their fees and the costs upfront to a potential customer. It’s time to raise the roof and have some fun…

I know lenders like to believe that they always did so. But, if that were completely true we probably wouldn’t have the TRID rules. No, all too often, the customer was left somewhat in the dark until the day of closing. Then, it was too late. So, somebody decided there needed to be a law, and we got TRID. Now, we need to live and work with it. Time to party, fiesta…

The CFPB has issued numerous statements saying they will be lenient in dealing with enforcement from TRID violations as long as the lender had shown a “good faith” effort to comply. This effort includes a written documented TRID compliance plan included in the lender’s Compliance Management System.

This plan must evidence adequate employee training and instructions and written procedures for the issuance, monitoring and tracking of TRID requirements with early detection and correction of identified defects.  Let the music play on, play on…

While it was important to do the programming to create, populate and issue the new disclosures, it is just as important to have the documented plan to ensure employees are aware of and understand their roles and perform them in accordance with the documented plan.

Lenders must have documented procedures and technology in place needed to effectively monitor and track TRID related activities to detect and correct potential problems as they occur. A lender must be able to prove to the CFPB that they made “good faith” efforts toward compliance if they expect to receive the “benefit of the doubt” if a violation occurs. Otherwise, the party may be over in a hurry.

What do you see as most important to TRID compliance?

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So, let’s get this party started. Enjoy! Have some punch.

Michael Vitali

About the Author

Michael Vitali

Michael L. Vitali – Independent Consultant to the Mortgage Industry Mike Vitali is an independent consultant to the mortgage industry on matters concerning compliance and mortgage lending. He most recently served as the Senior Vice President and Chief Compliance Officer for LoanLogics, monitoring regulatory developments and their practical implications for the mortgage lending industry. His duties included research, interpretation, and analysis of existing and proposed legislation related to the industry in support of recommendations for policy and/or procedure changes to maintain continued quality and compliance with all applicable laws, rules and regulations, investor requirements, and standard mortgage practices. In his more than 40 years in the mortgage industry, in senior level management, he has gained experience in all areas of mortgage lending, risk management, and compliance. Mike is a past President of the MBA of Greater Philadelphia, is a charter member and was the second Chairman of the MBA of Pennsylvania, and a past board member and Legislative Chair of both associations. He is a recipient of the 1998 Mortgage Banker of the Year Award from the MBA of Greater Philadelphia, and the 2003 Chairman's Award from the MBA of PA, and currently serves on several compliance related task forces for MBA.
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Michael Vitali

About Michael Vitali

Michael L. Vitali – Independent Consultant to the Mortgage Industry Mike Vitali is an independent consultant to the mortgage industry on matters concerning compliance and mortgage lending. He most recently served as the Senior Vice President and Chief Compliance Officer for LoanLogics, monitoring regulatory developments and their practical implications for the mortgage lending industry. His duties included research, interpretation, and analysis of existing and proposed legislation related to the industry in support of recommendations for policy and/or procedure changes to maintain continued quality and compliance with all applicable laws, rules and regulations, investor requirements, and standard mortgage practices. In his more than 40 years in the mortgage industry, in senior level management, he has gained experience in all areas of mortgage lending, risk management, and compliance. Mike is a past President of the MBA of Greater Philadelphia, is a charter member and was the second Chairman of the MBA of Pennsylvania, and a past board member and Legislative Chair of both associations. He is a recipient of the 1998 Mortgage Banker of the Year Award from the MBA of Greater Philadelphia, and the 2003 Chairman's Award from the MBA of PA, and currently serves on several compliance related task forces for MBA.
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