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TRID Violations Found in 90 Percent of Reviewed Mortgages
Tuesday, December 15, 2015 6:45 AM

A review of recent mortgage loans for Truth-in-Lending Act-Real Estate Settlement Procedures Act integrated disclosure (TRID) compliance showed violations in more than 90 percent of loans, according to a report from Moody’s published last week. This comes despite recent remarks from Consumer Financial Protection Bureau Director Richard Cordray’s that implementation is “going smoothly.”

“The Moody's report on TRID compliance problems reinforces our concern that the CFPB remains out of touch with the impact its rules are having on consumers and the credit unions and other financial services providers who serve them,” said CUNA Chief Advocacy Officer Ryan Donovan. “In this case, we warned the bureau for months that there would be problems implementing this complicated rule without a transition period or safe harbor. Our concerns are playing out despite the director's assertion that we and others proffer doomsday predictions that never materialize.”

The review was conducted by several third-party firms. According to the report, many of the observed TRID violations are technical in nature; but this is still cause for concern for lenders.

“However, the third-party review firms still believed the violations were material because the extent to which a secondary market purchaser, such as an residential mortgage-backed security trust, would bear damages or costs from delayed foreclosures is still unclear without further court or CFPB interpretation,” the report reads.

CUNA has pushed the bureau to address confusion regarding which entities are required to comply with the new TRID requirements since there are conflicting definitions in various CFPB TRID compliance materials as opposed to what is in the regulatory text.