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Lending

Interesting times for the mortgage industry require action

Recapping last week's posts and news on TILA-RESPA

Pen signing mortgage paperwork
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What a busy week we had last week! There’s quite a bit going on in the industry right now, and we’re excited to be a part of it. Last week kicked off the project research and budgeting phase of the Lender Implementation Timeline, as Week 50 until go-live on Aug. 1, 2015 seemed to just fly by. How much progress were you able to make in your organization around this phase?

We also had our first guest post on the blog with DocMagic’s Tim Anderson providing some insight into the relationship dynamics between the delivery of the Loan Estimate and Closing Disclosure.  Here are the key points from Tim’s post:

  • Ensure accuracy of the Loan Estimate form at time of application
  • Reconcile fees (with stricter RESPA tolerance guidelines) between the lender's system of record and title closing production systems on the final Disclosure document that must now be delivered three days prior to closing to ensure compliance prior to drawing docs
  • Face challenges with the new requirement to support MISMO 3.3 intelligent data standards. For instance, if a lender is not using the same system and doc provider for the initial Loan Estimate form as well as the final Closing Disclosure, they are not going to easily reconcile data, documents and calcs to be compliant
  • Be aware that most systems don’t even stand behind their GFE/TIL and APR calculations with a rep and warrant for compliance
  • Provide an audit trail as proof of compliance. Recognize that it is now even more important that the data and documents are shared and synched between the lender's system of record and title production systems and easily and quickly accessible

Next, we talked about what a digital transformation in the mortgage industry could look like. Could tech giants enter the space? What can we learn from their digital mastery and apply to our industry? In addition to thinking beyond TILA-RESPA for a moment, we also looked at some stats from Accenture’s study:

  • 27% would consider a branchless digital bank
  • 71% percent consider their banking relationship to be transactional rather than relationship driven
  • 51% want their bank to proactively recommend products and services for their financial needs
  • 48% are interested in real-time and forward-looking spend analysis

And before we closed the week out, the CFPB announced the 12 firms that will be participating in the eClosing pilot program that starts this fall.  We’re honored to be a part of it, and looking forward to working with Franklin First Financial as we mentioned on Friday.

In the very near future, we’ll be digging into the Closing Disclosure part of TILA-RESPA once we’ve covered the final sections of the rule regarding the Loan Estimate. Keep checking back this week for updates, and as always, be sure to visit www.TILARESPA.com to view a growing knowledge base of information and forums where you can ask questions and interact with others in this industry.

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.

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