New rules ring, are you listening
During closing, errors glisten
A terrible sight, delaying tonight
Closing in a mortgage wonderland
New rules have turned the real estate, banking and title industries on their heads. The mortgage process is now expected to last at least 45 to 60 days due to the Closing Disclosure’s tricky timing.
Regulators are scrutinizing loans for anything that might hurt the consumer. If errors are found during closing, the process is delayed even further.
Gone away is the HUD form
Here to stay is the TRID form
It’ll take us awhile, before we can smile
Closing in a mortgage wonderland
You might ask, “Well, how often will errors actually occur?”
The alarming truth is that a recent report found TRID violations in 90 percent of the analyzed loans. TRID has changed not just the mortgage forms but also the policies that permeate the entire process. It might take the industry a long time to adjust to this massive overhaul.
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With e-closings, we will build a process
That ensures compliance all around
They’ll say, “How’re your loans?”
But we won’t whimper
We’ll say, “Check them now while you’re in town!”
Technology is helping the industry navigate the data-driven landscape created by regulators.
With one digital loan file that appropriate participants can view, make changes, approve and send on, errors can be greatly reduced. E-closings can also automatically record every action taken and track data, so audit-ready files can be submitted to regulators without fear of fees for violations.
Later on, we’ll be in awe
As we plan for more new laws
And sell unafraid, the TRID loans we made
Closing in a mortgage wonderland
Regulators are not the only ones scrutinizing mortgage loans. Investors have become picky about which loans they will buy on the secondary market. Even the ones they do buy pose a potential buyback risk for lenders.
TRID adds another layer of requirements that investors are looking at. To sell TRID loans without buyback risk, it’s vital that lenders have technology in place that ensures each loan they close is a good investment.
As if that’s not enough, new laws are also on the horizon. Just as the Consumer Financial Protection Bureau (CFPB) renovated TRID two years ago and warned of impending changes, they are now warning of new HMDA requirements.
The industry needs to prepare for these changes now to be sure loans are compliant and will not bring buyback risk for lenders down the road.
Technology — e-closings and other innovative tools — can provide the necessary comfort and security to walk through this new compliance-covered landscape and make it a true mortgage wonderland for all industry professionals.
Emily Hoffman is the blogging and social media manager for ATS Secured. Follow her on Twitter or connect with her LinkedIn.