TRID rules and regulations are designed to give consumers a clear and easy to understand picture of the costs involved in a mortgage. Credit unions need to navigate these rules very carefully in order to remain compliant.
Adhering to TRID (TILA RESPA Integrated Disclosure) rules requires credit unions to know as much as possible about the actual closing costs of a mortgage through all stages of the loan process, and then disclose those costs to the borrower accurately on the loan estimate and closing disclosure.
By following certain recommended practices, a credit union can achieve compliance and perform well in audits and agency examinations. Proceeding with caution is important, because even some seemingly small missteps can result in negative findings and unnecessary costs.
Here are five ways you can increase your odds of remaining TRID-compliant:
- Automation. When you automate your processes, you can avoid human errors. With the right origination system capabilities, decision making is built into the system. Helpful automation should calculate deadlines, fee baselines, and determine if a loan is covered by TRID.
- Centralization. When it comes to your decision making, centralization is preferred. Not everything can be automated, but you can minimize the risk of errors with dedicated experts. These individuals’ job is – with the help of well-written policies – to initiate disclosures or make decisions about issues such as a change of circumstances. Centralization ensures consistency.
- Quality control. For any loan post-closing funding, there should be a review for quality control. This is extremely important in light of TRID’s complexity. Finding errors immediately and correcting them after a loan is closed will help your credit union steer clear of litigation, enforcement actions and class action lawsuits.
- Comprehensive archives. Keep all records and documents for proof of compliance. As far as compliance is concerned, if something isn’t documented, it never happened. So where system capabilities allow, add notes to indicate sequences of events, maintain records of communications and detail any facts related to a change of circumstance determinations.
- Watch your lists. Keep an eye on settlement service provider lists. Although TRID compliance is extensively focused on loan estimates and closing disclosures, it is still important to train your staff on the written list of service provider requirements. Potential shifts in tolerance thresholds and compliance violations can add up. Such non-compliance with written list requirements can result in changes to fee tolerances and may rise to the level of Regulation Z violations.
For some credit unions, the best approach for complying with TRID may be to partner with an outside expert to be sure they serve their members well through transparency.