Study Finds 12 of Top 15 QC Issues TRID-Related
MetaSource, Salt Lake City, said a review of its post-close quality control audits in 2016 showed the Consumer Financial Protection Bureau’s TILA/RESPA Integrated Disclosure rule–also known as “Know Before You Owe”–accounted for 12 of the top 15 quality control issues for mortgage lenders.
Last year marked the first full year of TRID implementation. The rule was designed to provide potential home buyers with clearer information about their mortgage financing options.
“TRID was such a significant change and many loan origination systems weren’t completely ready for it,” said Mary Kladde, Senior Vice President of Mortgage Services with MetaSource. “Additionally, QC was largely left out of the thought process. Overall, it has been a major pain point throughout 2016, although it does seem to be leveling out.”
Kladde noted one source of confusion was the time sequence of new documents required for fee changes between the initial and final Closing Disclosure and Loan Estimate, especially when they had the same date.
MetaSource reported the six most frequent findings were issues with TRID requirements. The first two in rank order were correspondence of information listed in the Calculating Cash to Close table on page 3 of the CD to the information cited on the last disclosed LE; and receipt by the borrower of a CD at least three business days prior to consummation.
“The top two findings deal with difficulty in calculating the homebuyer’s income,” Kladde said. “FHA and Fannie Mae have often found these to be problems as well.
Findings 3-6 dealt with providing the CD in the file for review; when fees within the zero tolerance category increased without a valid reason, curing them on the final CD; supporting all required revised LEs by documentation of a valid Change of Circumstance and providing it to the borrower within three business days of receiving information sufficient to establish a reason for re-disclosure; and providing LE to the borrower not more than three business days after receipt of application.
The leading non-TRID issue–seventh on the list–was providing Verbal Verification of Employment per Automated Underwriting System requirements. The other non-TRID issues were ninth (providing matches of buyer income figures) and 12th (providing verification of assets for review, an issue FHA and Fannie Mae also encountered).
The full list of findings appears on the MetaSource Mortgage Blog (http://www.mortgagecomplianceadvisors.com/mortgage-quality-control-blog/top-15-mortgage-qc-trid-findings-for-2016).
