A letter penned by the CFPB to the Mortgage Bankers Association argues the industry is progressing toward full TRID compliance, according to Fitch Ratings.
“The letter also noted that not all technical errors can be cured. While the implicit liability for certain technical TRID violations may be low, the ability and success of originators to further reduce the incidence of TRID errors in the loan manufacturing process remains an important area of focus,” Fitch said in a release. “Fitch expects these errors to be small enough to have no effect on investors in US RMBS.”
The letter also addressed “good faith efforts,” though fell short of promising a concrete hold harmless period.
“Good faith efforts will be viewed positively, with corrective and diagnostic feedback, as opposed to punitive,” Fitch said. “While material violations with TRID have been relatively infrequent, Fitch believes that the CFPB's approach provides the mortgage industry opportunity to work toward fuller compliance as it struggles to reduce the existing high incidence of good-faith formatting errors.”
The letter also addressed the fact that the CFPB will not make any changes to the rule.
“The CFPB also explains that the Truth in Lending Act already contains provisions for error correction, which continues to apply to integrated disclosures,” Fitch said. “However, the CFPB's letter did not amend the TRID rule, and interpretation will ultimately be handled in a court of law.”
Fitch says it will continue to monitor the impact TRID will have on the industry.
Originators are adapting to the post-TRID industry -- which is on its way to full compliance, according to one association.