Fannie Mae, Freddie Mac Release TRID Guidance

Fannie Mae and Freddie Mac released guidance to sellers, outlining good-faith compliance standards during initial implantation of the Consumer Financial Protection Bureau’s new TILA/RESPA Integrated Disclosure rules.  

TRID, also known as Know Before You Owe, went into effect Oct. 3. It includes a Loan Estimate document that replaces the initial Truth-in-Lending Act disclosure & Good Faith Estimate for most closed-end mortgage loans. The Closing Disclosure replaces the final Truth-in-Lending disclosure & HUD-1 Settlement Statement for most closed-end mortgage loans  

The GSE guidance largely conforms with the statements issued last week by the CFPB and the federal banking agencies outlining a good faith compliance standard during the initial implementation phase of TRID.  

Fannie Mae and Freddie Mac acknowledged the “considerable technological and operational challenges” created by the new rule, as well as numerous compliance questions that remain outstanding. The guidance indicates they expect lenders to make good faith efforts to use the new forms and complete them accurately, but they will not be conducting routine post-purchase loan file reviews focused on technical compliance with TRID.   

“Fannie Mae expects lenders to make good faith efforts to comply with TRID; failure to use a TRID-required form will be deemed a violation of the good faith efforts standard and will render the mortgage loan subject to all contractual remedies, including repurchase,” the GSE said (  

“After a transitional period, we will consider whether to begin such reviews for technical compliance,” Freddie Mac said ( LL.pdf).    

Although the GSEs’ standard warranties regarding “compliance with laws” remain in place, the GSEs will only exercise their contractual remedies if:

–the required form is not used, or

–a particular practice would impair enforcement of the note or mortgage or would result in assignee liability, and a court of law, regulator or other authoritative body has determined that such practice violates TRID.  

“The GSEs’ standards should serve as reliable benchmarks for the rest of the secondary mortgage market during the implementation phase of the new rule,” said Steve O’Connor MBA senior vice president of public policy and industry relations.  

MBA recently released results of a survey showing the TRID implementation date and lack of a formal compliance grace period could put consumers at risk of missed closings, blown rate locks, and other potential costs. One-third of survey respondents indicated that they have had insufficient time to test and integrate systems and train their employees.   

The House this week is expected to consider MBA-supported legislation that would mandate a TRID grace period through Feb. 1, 2016.  

Additionally, MBA this month launched a set of resource guidelines to educate both consumers and lenders and their business partners needing to comply with the TRID rules.  

The resources comprise several documents designed to assist consumers and the broader real estate community in plain, easy-to-understand language. They include:  

–a Consumer One-Pager-: Targeted for consumers and covering the changes of Know Before You Owe, this informative one-page flyer covers the changes brought by TRID in plain, easy-to-understand language and ways to keep the process running smoothly;

–Lender One-Pager-: Targeted for real estate agents and broker partners, also covering the changes brought by Know Before You Owe, this informative one-page flyer also covers the changes brought by TRID in plain language; and

–PowerPoint Slide Deck: Targeted for real estate agents and broker partners to use in presentations with colleagues. These slides serve as the basis for a presentation to real estate agents and brokers. The deck includes an appendix of sample forms for reference.   

The documents can be found at