What’s in Your TRID?

Or better yet, what’s not in your TRID?  It’s the never-ending saga between a mortgage lender who is trying to keep the customer happy, the mortgage processor who has nightmares about LE’s and CD’s, the auditor who plays the “gotcha” game, and the applicant who is trying to make sense of it all.  Therefore, it becomes imperative that all information contained in these complex disclosures are complete and accurate as possible. And whatever is not in your TRID can get you in trouble.

It has only been a few short years ago, five to be exact, when TRID was first introduced.  One would think after this year’s onslaught of mortgage refinances, mortgage processing staff would be experts in this regulatory field, but recent findings by the FDIC suggest otherwise. In fact, 86% of all compliance exams in 2019 (WI) had violations of TRID. Everything from loan costs, general information, calculating cash to close and closing cost details is fair game when it comes to making inadvertent mistakes.

So, what is a banker to do? First, select the best LOS system and test your defaults for accuracy including fees and third-party providers, including any updates considering our new era of refinance business. Building your system to be bulletproof from clerical errors may be your first line of defense.  Second, look for red flags within your disclosure that are relevant. For example, are you disclosing estimated PMI premiums on the initial LE when the estimated value exceeds 80%? Does the LE figures on your CD match the last revised LE issued to the customer? Third, be aware of when Taxes and Home-Owners Insurance is due and possibly considered a pre-paid, especially for loans that will close in the coming weeks. Lastly, don’t let your processor(s) make any changes to TRID documents that don’t follow the protocols of your LOS system. While bankers are always looking for workaround solutions, making hard changes to a TRID document can have negative and costly effects. 

Choosing the right LOS, being fully trained on TRID and utilizing resources to review your TRID documents and processes may keep your bank out of the 86% of financial institutions struggling to comply.  What is in your TRID (or not in your TRID) will make all the difference.  For further assistance on complying with this regulation, please contact me at jschmid@fipco.com.

By, Ally Bates