TRID Update: Changes During 3 Business Day Waiting Period--Not So Bad After Revisions by CFPB.
With updates and revisions to proposed TILA-RESPA Integrated Disclosure rules (TRID), it's hard to keep track of what the actual rule is going to be. It seems as though many people are still preparing (and complaining about) the "hair trigger" on the requirement to redisclose the Closing Disclosure. But that's changed, and here's what we'll be facing in August.
Quick Recap: August 1, 2015, there will be a new format for mortgage disclosures. A "Loan Estimate" replacing the initial disclosures and a "Closing Disclosure" replacing the final disclosures, thereby integrating RESPA and TILA.
There have been some revisions to the CFPB's proposed rules. And here's one important one we want to summarize. Why? Well, it actually makes it easier on us. And it's also a situation where a lot of people were horrified after reading the original version of the rule and have been complaining about it ever since--not realizing it's actually it's actually been changed.
Original Version of Rule
Under TRID, there is a 3-day waiting period for closing after the borrower receives the Closing Disclosure. The Rule was first written so that, almost any change during those 3 days required a new disclosure and new 3-day waiting period.
So if you hear friends complaining about a new disclosure when a final walk-through reveals a broken ceiling fan, or empty oil tank, THIS is the rule they are referring to.
It would've been a major obstacle to closing on time with any regularity. As we all know, there are lots of small things that happen as closing gets near.
Current Version of Proposed Rule
But we all huffed and puffed and the CFPB changed the rule. (The most current version of the Rule can be found here, by the way - you'll want to throw this away if any more revisions are made).
The new rule is much more industry-friendly. A new 3-day waiting period is only required where one of the following three things occurs before closing:
Loan product is changed (e.g., ARM to fixed)
Pre-payment penalty is added
APR increases or decreases by 1/8
So, if after you've given the Closing Disclosure, the seller agrees to fill up the oil tank (or something similar), you should deliver a revised Closing Disclosure but this does not delay closing because a new 3-day waiting period is not required.
Note: Future Revisions
Don't get discouraged. The Rule remains largely intact as originally written. While there may be future revisions, don't expect them to change this particular part of the rule, or any major parts. So if you're studying or preparing for this rule now, that work won't go to waste!
And Note: TRID's a Big Deal
In a study by Wolters Kluwer, TRID is the #1 compliance issue facing US financial institutions in 2015, saying the Rule presents, "unprecedented changes that will impact lenders' entire mortgage operations, including business processes, technology, policies and procedures, vendor relationships, employee readiness, and customer service. Failure to comply could result in significant fines and penalties, costing thousands of dollars each day, as well as in regulatory and reputational risks."
In other news:
Want to see a list of upcoming rules from the CFPB? Here's a list from the OMB.
Doing HMDA training for employees? Here's a summary by the FFIEC of the "History of HMDA" that you might find helpful.
If you have to deliver bad news, you might find it helpful to have this new "Hurt Feelings Report" completed.
According to the Harvard Business Review, "Any Value Proposition Depends on the Answer to One Question" ... it's no secret that a clear vision makes work a lot more productive, and rewarding
They say that, before you lead a team, you must understand how to lead yourself. Mike Figliuolo, in his book "One Piece of Paper," sets out 5 questions to ask yourself to answer this question:
Why do you get out of bed in the morning?
How do you get through difficult times?
What guidelines do you live by?
How do you hold yourself accountable?
How will you shape your future?
"The words 'I am' are potent words; be careful what you hitch them to. The thing you're claiming has a way of reaching back and claiming you."
- A.L Kitselman
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