"MBA believes the Know Before You Owe rule will make the mortgage process better for consumers," said MBA Senior Vice President Residential Policy and Member Engagement Pete Mills. "However, as the survey shows, implementation has proven far more difficult than both industry and the CFPB anticipated due in large measure to the complexity of the technology and systems that have put in place over the years.”
The MBA’s survey was released Wednesday, a day after the CFPB confirmed it would allow for a “hold harmless” period. However, it still has not provided the sort of formalized plan the MBA is calling for.
The survey found two-thirds of mortgage companies are ready for the Know Before You Owe rule; the other third admitted they have not had enough time to test the procedures.
It also found half of company executives fear the change will pose significant problems for clients.
And while many industry players feel prepared, they would still welcome a formalized grace period.
“At this company we’ve been doing rigorous training and we’re prepared,” Thad Pike of Pacific Residential Mortgage told Mortgage Professional America. “But any grace period would definitely be welcome.
Speaking before the House Financial Services Committee Wednesday, CFPB Director Richard Cordray confirmed there will be a period of time allowed for lenders and originators to acclimatize themselves to the upcoming rule change.
“There will be time for [financial institutions] to work to get it right and not have to be perfect on the first day,” Cordray said, according to ABA Banking Journal.
Cordray also said the regulators’ approach to TRID oversight in the early months “will be diagnostic, not punitive.”
The MBA is once again calling for a formalized TRID implementation grace period after a survey it conducted concluded many brokers are still unprepared.