Bank execs weigh in on ‘Know Before you Owe’

by Justin da Rosa20 Aug 2015
Players at all levels of the mortgage industry are preparing for the upcoming TILA-RESPA disclosure rule change, which will force those professionals to more seamlessly work together.

“Additional loan coverage and lack of preparedness by realty and settlement agents will definitely be cause for concern, particularly in the early stages of rollout of the new rules,” Carol Chastain, chief compliance officer at United Community Bank told GSA Business, which bills itself as a magazine for senior decision-makers in South Carolina. “It will be imperative that we have open lines of communication between the bank, the borrower, the realty agent and all closing agents throughout the entire loan process to ensure that delays are kept to a minimum.”

Originators are scrambling to implement the new rules into their respective processes, and many argue it is one of the biggest challenges currently facing the industry.

“I believe (one of the biggest) challenges for the industry continues to be the constant changing compliance requirements, the most recent of which is to be, the TILA-RESPA Integrated Disclosure,” Roger Steur of Principal Mortgage told Mortgage Professional America.   

And while players hope the new changes will benefit homebuyers, many – including Rod Alba, senior vice president of mortgage finance and regulatory counsel at the American Bankers Association – argue the rules could have been better designed.
Alba says implementation will be “extremely difficult.”

“The new forms may be somewhat clearer (the high point of the rule may be the addition of a ‘cover sheet’ that offers an overview of settlement costs for mortgage shoppers), but the forms continue to be excessively lengthy and intimidating to average consumers,” he told GSA Business. “New rules do not lead to legally sound disclosure outcomes that are sensible in terms of origination and settlement requirements.

“The application of these new rules will vary across jurisdictions and across product lines.”



Is TILA-RESPA a good or bad thing long term?