Better late than never, right? The Consumer Financial Protection Bureau (CFPB) has finally issued its updated Supervision and Examination Manual (www.consumerfinance.gov/guidance/supervision/manual/), which includes guidance relating to TRID. With exactly nine days until TRID takes effect, many are scrambling to peruse it as quickly as possible. While the overall view is that it is a helpful tool, many feel that it leaves important questions unanswered.
“The content wasn’t surprising, I was thankful,” noted Rick Roque, Managing Director of Retail Lending at Michigan Mutual, a national lender based in Port Huron Michigan. He summed it up as “a good thorough background of what to expect in the event of an audit.” But like a lot of others, he lamented the fact that the TRID portions were issued so close to its effective date.
The main complaints thus far have been two-fold. First, many are surprised by the amount of resources that must be expended for compliance. Roque noted that for a family-owned, mid-tier lender and servicer like his own company, the cost of compliance has been substantial. He estimates his company has spent in excess of $1 million on TRID preparation. Any additional changes required by the manual could also prove costly.
The second most prevalent complaint is that the manual does not address many questions that lenders will inevitably face. For example, how is a lender to address strict adherence to disclosure regulations (with their holding/wait time periods) when borrowers inevitably seek last-minute delays in a closing date? Thus far, CFPB has not addressed this basic issue. Nor has it responded to a host of inquiries about other issues common in the industry.
Lenders are left with being hopeful that the fact that the release of the manual’s exam procedures came so late is an indication that the CFPB itself needs more time to understand compliance. Still others, however, are concerned that the bureau’s promise to be “sensitive” to lenders who make “good faith” efforts at compliance is no guarantee of a delay in early enforcement action. The truth is, only time will tell.
For now, lenders really have no choice but to simply do everything they can to be TRID ready – and now. The time has arrived. Lenders would be well served to adopt a “whatever it takes” mode of operation. And, as always, strive to keep abreast of any news from Congress or CFPB. The acts of preparation and absorbing all the latest information are a lender’s best hopes for both the successful implementation of TRID and passing a TRID audit.
Sources: 1) CFPB Supervision and Examination Manual (www.consumerfinance.gov/guidance/supervision/manual/) 2) Sinnock, Bonnie – September 18, 2015 – “TRID Exam Guidance Leaves the Big Questions Unanswered” (www.nationalmortgagenews.com)