Fixing the TRID Challenges That the Industry Got Wrong

Long before TRID’s implementation in October, analysts and professionals were forecasting the various effects its changes could have on the industry and each stakeholder in the transaction. Of course we can evaluate the clear changes of the new Loan Estimate and Closing Disclosure forms, but is that all that TRID encompasses? What other changes are in store for businesses?

In a white paper released in early Q3, we broke down the challenges everyone was soon to face, and the new Loan Estimate and Closing Disclosure forms only accounted for about 20% of them. Naturally, the industry chose to focus on meeting the tangible requirements of the LE and CD first. We knew that the new forms were going to be a major focus, but because we looked at TRID with a different perspective, we understood that was only a small part of what the CFPB is trying to accomplish. There was much more that had to change. Although businesses have had a few months to incorporate new systems, tools and training for the LE and CD, the industry is still in chaos figuring out what else they have to do to be compliant. So the question then becomes, how do I establish and show this ‘good faith effort’? That’s where the other 80% of TRID comes in. This includes improving the entire transaction by incorporating consumer participation and education, collaborating with title companies for the closing, and partnering with real estate agents.

To build a proper platform for consumer participation, we first need to reevaluate the way the Loan Estimate and Closing Disclosure forms were implemented. The first LE is never going to be correct, it’s an estimate. So don’t over focus on extreme details when the estimate will change after title evaluates the deal anyways. And for the CD, that’s right in the ballpark of what title did with the HUD. Let title take the lead on completing that, and you can approve everything before it’s sent out. With the LE and CD issues resolved, how do we refocus the industry to involve the consumer more and collaborate with all the other stakeholders? Lenders, don’t hesitate to talk to the title companies. For efficiency and accuracy with the LE and CD, constant communication with them is required. To give consumers the experience they deserve, involve them and their real estate agents throughout the transaction, and allow them to participate by providing education throughout the process. By partnering with title and real estate agents, you can consolidate communication to one place while presenting a united confusion-free front to the consumer.

With the entire transaction process an issue, instead of spending your time and resources on systems that offer small spot solutions, focus on evolving your organization to fit the requirements of the new post-TRID world. Not even technology can fix the archaic business model of home buying today. The first to meet these needs will succeed, and those who don’t will surely be passed by.

We dive into more detail on how to address these challenges and get set on a clearer path to overcoming them in a recent white paper that is available for download here.

The white paper addressing pre-TRID predictions from September is also available for download here.