GOLF SEASON IS IN FULL SWING. It's a maddening but exhilarating game--much like the mortgage banking business. Our industry is now approaching the halfway point of 2016. In golf, that is known as "the turn," and it can be a pivotal moment. [paragraph] Just ask professional golfer Jordan Spieth. In April, Spiethled the Masters Tournament by five strokes at the turn of the final round, but he lost in the end. A water hazard was his downfall, and he scored poorly afterward as he played in what appeared to be a rattled condition. In contrast, Danny Willett was laser-focused and played it "Steady Eddie" to avoid the hazards and eventually win the tournament.
As our industry enters its own turn, there are some hazards, opportunities and emerging trends that could define the second half of 2016. How we play them could influence our business's leaderboard in December.
False TRID compliance confidence
Some residential mortgage originators are finding it more difficult than anticipated to comply with the Truth in Lending Act (TILA)-Real Estate Settlement Procedures Act (RESPA) Integrated Disclosure rule (TRID). The complexity of the rule combined with the range of the data needed to evidence compliance is proving to be beyond the processing, monitoring and testing capabilities of some originators' systems.
Do you have false TRID compliance confidence? If you use software to gauge your compliance, can it really "see" all the data needed to give you results you can count on?
Consumer Financial Protection Bureau (CFPB) auditors, when checking for TRID compliance, can be expected to review every artifact related to the origination of the loan, including the mortgage file, loan origination system (LOS) data and notations of all types. Experience tells us that they are unlikely to limit their review to the data you run through your compliance software.
Already, originators are concerned with false positives being produced by their compliance software. Dealing with false positives involves incurring the additional costs of running down potential findings that ultimately prove to be non-issues. Could the larger concern actually be false negatives?
Originators are actively looking at their mix of front-end software and back-end audit systems to determine the most productive and efficient means of complying with TRID. Remediation is burdensome and can be costly. Of course, we really won't know the full impact of TRID until an originator is hit with an...