Leaving a loan estimate audit trail
Best practices leverage technology for TILA-RESPA compliance
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CFPB RESPA/TILA Rule Reference: 2.3-2.5, page 15, CFPB Detailed summary of the rule
You, the creditor, give your clients first class service, follow every step in your company policies, and everything is in-line with TILA-RESPA. The Loan Estimate forms are kept for record retention, your mortgage broker acting on your behalf has stated they are following all of the proper procedures — fantastic!
Time goes on and now it is time for an audit. Is all the evidence of delivery, notification, and revisions easily accessible? Think about how much of a paper trail we already have within today’s rules, and the chance that everything is consolidated in one location. There are some documents that you have electronically and some that are in paper format.
How many people do you have managing that process?
The spirit of TILA-RESPA is about fairness, education and transparency for the consumer. The creditor must take the steps necessary to have a consumer show up to the closing table with confidence that they understand everything on the Loan Estimate. Does the consumer know what APR means? Does the consumer understand that the six pieces of information they provided on the form resulted in an application? Did the consumer understand all of the components prior to their intent to proceed?
Can you prove that your consumer not only read the form but that they were educated and understand the various components of the form?
With all of the dynamics in the loan origination process, it is clear the best practice must leverage technology to empower the consumer with education, fairness, and transparency as well as document-specific actions of the creditor, mortgage broker, title agent and consumer.
For more information on the impacts of TILA-RESPA on your business, and how technology solutions can help you solve them, visit www.TILAPRESPA.com to view a growing knowledge base of information and forums where you can ask questions.
All information and views expressed or implied are provided without warranty and are only the opinion of Pavaso, Inc. Each participant should seek legal representation for legal interpretation of the ruling and the CFPB directly for final instruction and interpretation. The final rule can be found here.