The legal analysts at Ballard Spahr dig into the issues still being raised about how the transition period for the TILA-RESPA Integrated Disclosure rule works, and the issue of civil lawsuit liability.

Fannie Mae and Freddie Mac (collectively, the “GSEs”) also released guidance to their sellers explaining that they expect lenders to make good faith efforts to comply with the TRID rule in a timely manner as well. While the GSEs will evaluate whether a lender used the correct forms, until further notice, the GSEs will not conduct routine post-purchase loan file reviews for technical compliance with the TRID rule during this transitional period. However, the GSEs also advised that they will exercise contractual remedies, including repurchase, in the following two “limited circumstances”: (1) the required form is not used, or (2) if 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 the TRID rule. Fannie Mae also indicated that it will post FAQs on its website that will answer additional questions about the TRID rule.

The efforts of the CFPB and other FFIEC member agencies fall short of requests by the industry that institutions who have acted in good faith to implement the TRID rule be protected from legal liability for a transitional period. As we have described, H.R. 3192, entitled the “Homebuyers Assistance Act,” would provide a hold harmless period for the TRID rule until February 1, 2016. The bill provides that a suit cannot be filed for violations of TRID before then as long as good faith efforts are made to comply. H.R. 3192 passed in the House on October 7, 2015 and will be reviewed by the Senate.

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