Grace Period of TRID Enforcement Granted by CFPB

Overview of Extension on TRID Forms for Mortgage Lenders

Are you prepared to make the switch to the new TRID? If you answered no, then you may be delighted to find that the CFPB has not only delayed the initial implementation from August to October, but it’s also granted a good faith grace period through December 2015.

Don’t worry, you’re not alone. In a recent study conducted by Capsilon, 41% of mortgage lenders were not yet ready to make the shift on August 1st. Yet the form changes complicate the borrowing process by taking extra time and energy while you’re busy conducting regular business and at the same time implementing the new TRID changes.

Why the Delay and Grace Period on TRID?

It’s such a crucial time of year in the industry to make such drastic changes to a working system in continuous motion. Therefore, the CFPB has considered the request from both parties to give the banks time to catch up with the new regulations by putting these forms into effect and perfecting the process.

Just a few small changes can really slow business, and there’s an importance in testing the new system to ensure ease of use for both borrower and lender. In the meantime, mortgage lenders who are falling behind in updating their systems can also enjoy a good faith grace period that lasts until the end of the year (through December 2015). This gives stakeholders ample time to test their systems and assure a smooth transition into next year.

What’s the Worst TRID can Do?

Worst case scenario, you won’t be prepared for the new changes. This could have a negative impact on your clients and hurt overall customer satisfaction. If more than a third of mortgage lenders do not take the necessary actions to prepare for these changes, this could cause a lot of problems for the housing market nationwide, as the banks race to recover from the setbacks.

In a survey by the American Bankers Association, 74% of banks were using a vendor or consultant to manage the TRID form update. Only 2% put the new systems into effect by April, while the remainder were still lagging behind. An amazing 79% of these banks would not receive the new system until after June.

What are the Good Faith Grace Period Stipulations?

If you’re still not prepared for TRID in October, then you may need to take advantage of the good faith grace period introduced by Congressman Steve Pearce and co-sponsor Brad Sherman. The House has passed the grace period with H.R. 2213, which prevents the enforcement of the new integrated disclosure form requirements and the filing of any related lawsuit if (a) a good faith effort was made to comply with requirements (b) the alleged conduct occurred on or before December 31, 2015.

This gives mortgage lenders time to test the new operations before the effective date. Find a copy of the TRID proposal delay here.

Want to work with a title agency that’s ready to make the switch?

Let us partner with you for smoother transition. If you’re in need of a better closing experience, our mortgage experts at Bay National Title Company are ready to help you make each transaction as quick and easy as possible.

Give us a call to set up your consultation today.

SOURCES:

The Awful Truth About TRID

CFPB Will Grant Grace Period on TRID