In a letter to the Mortgage Bankers Association, the CFPB said it would likely not hold originators accountable for small paperwork errors on disclosure documents.
“We believe that the risk of private liability to investors is negligible for good-faith formatting errors and the like,” CFPB Director Richard Cordray wrote to MBA president David Stevens, according to Marketwatch. “We recognize that a certain level of minor errors in the early days of implementation is to be expected.”
The letter, which was sent in late 2015, said the CFPB, Fannie, and Freddie “are looking, in these early days, for good-faith efforts to come into compliance.”
However, these promises aren’t enough for one industry professional.
“I haven’t heard them say outright they will forgive originators (for small errors), and any kind of clarity would be beneficial for the industry,” Keith Delatte, president of InterTrust Mortgage, told Mortgage Professional America. “There has been a lack of clarity and the CFPB hasn’t put anything into writing and they have not guaranteed anything.”
Indeed. While the letter is a step in the direction of allowing for a hold harmless period – which the industry has vehemently called for since before TRID was officially implemented – it falls short of outright guaranteeing absolution for originators operating in good faith.
“They can say something and then do something else entirely,” Delatte said, noting that a more official announcement could assuage some originator fears. Especially considering the CFPB has sent mixed messages.
“According to Calvin Hagins, CFPB’s deputity assistant director, at a conference (late last year), there isn’t a grace period,” Delatte said. “The industry has asked for it and Calvin said they won’t give it.”
The CFPB teased originators with a suggested TRID grace period but more concrete and official information is needed, according to one industry veteran.