After months of increasing pressure from industry groups and Congress, the Consumer Financial Protection Bureau (CFPB) made an announcement Wednesday about the Aug. 1 effective date for the TILA-RESPA Integrated Disclosure (TRID) rules.
The statement from Director Richard Cordray stopped short of a delayed enforcement or hold-harmless period that many have pressed for, but it did say the bureau would “be sensitive to the progress made by those entities that have squarely focused on making good-faith efforts to come into compliance with the rule on time.”
“My statement here of this approach is intended to ease some of the concerns we have heard about this transition to new processes in the coming months,” Cordray said in the letter.
Hand-wringing throughout the industry has increased since the beginning of the year, as settlement services technology providers got their upgrades together to handle the new Loan Estimate and Closing Disclosure forms, but many lender origination systems (LOS) fell behind the curve. LOS systems needed to wait for version 3.3 of the Mortgage Industry Standards Maintenance Organization to configure their systems, but that upgrade was not finalized until February because of a delay in getting standards set to the Uniform Collateral Data Portal from Fannie Mae and Freddie Mac.
The ensuing rush to upgrade and improve systems, plus the inability to test the new forms live before Aug. 1, left many in the industry reaching out to the CFPB and their legislators to urge holding off enforcement of the new TRID rules until the bugs could get worked out.
The CFPB declined the chance to do what the Department of Housing and Urban Development (HUD) did for the last form changes in 2010, when HUD instituted a restrained enforcement period to allow for compliance.
The bureau also issued a fact sheet to clarify aspects of the three-day rule. The CFPB reiterated the three reasons that restarting the three-day review period when re-disclosing and specifically said that all other re-disclosures could be made without a delay in timing.
The Title Report will have complete coverage of the announcement, including industry reaction, later today.