Perspectives on TRID and the Future of Real Estate Closings USA Center for Real Estate and Economic Development Presented by Warren Laird, Associate

Transcription

1 Perspectives on TRID and the Future of Real Estate Closings USA Center for Real Estate and Economic Development Presented by Warren Laird, Associate Senior Counsel STEWART TITLE GUARANTY COMPANY 1

2 History of the CFPB CFPB formed with Richard Cordray as Director Supervisory authority over Banks and Non-Banks. Enforcement authority over RESPA and TILA - 2

3 Areas of Focus Disclosures Meet CFPB and lender requirements: 1.Produce for or by settlement 2.Lender delivery or 3.Settlement delivery 4.Unroll Title Services Fees 5.Prepare for 3-Day Rule 6.Understand Tolerances 7.Prepare for Trial Period Controls Meet requirements of the following: 1.ALTA Best Practices 2.CFPB Service Provider Bulletin 3.OCC Bulletin on Third-Parties 4.FDIC Bulletin on Third Parties 5.Fourth-party risk Complaints Improve Documented Process for: 1.Consumer complaints 2.State regulator complaints 3.CFPB complaints database 4.Lender requirements Transformation Change the closing process to: 1.Reduce number of disclosures 2.Ensure accurate quotes 3.Deliver docs earlier 4.Educate consumers 3

4 CFPB Finalizes Rule on Integrated Disclosures Better Disclosures 4

5 Service Provider flight to quality CFPB Bulletin to Banks and Non-Banks stating they must use quality service providers. 5

6 Service Provider flight to quality Other regulators restating their requirements for third-party risk Federal Reserve FDIC OCC FFIEC 6

7 Service Provider flight to quality 1. Current Licenses - Establish and maintain current License(s) as required to conduct the business of title insurance and settlement services. 2. Escrow Accounts - Adopt and maintain appropriate written procedures and controls for Escrow Trust Accounts allowing for electronic verification of reconciliation. 3. Privacy Program- Adopt and maintain a written privacy and information security program to protect Non-public Personal Information as required by local, state and federal law. 4. Settlement Procedures- Adopt standard real estate settlement procedures and policies that help ensure compliance with Federal and State Consumer Financial Laws as applicable to the Settlement process. 5. Title Procedures - Adopt and maintain written procedures related to title policy production, delivery, reporting and premium remittance. 6. Insurance Coverage - Maintain appropriate professional liability insurance and fidelity coverage. 7. Complaints Process - Adopt and maintain written procedures for resolving consumer complaints. 7

8 Complaints 8

9 Complaints 9

10 Complaints 10

11 HOW IS TRID GOING? Large lender vs. small regional lender compliance Privacy, correction timelines still a concern for Realtors Real world solutions- some easier than others. 11

12 How is TRID Going? The other side - Penalties top $5 Billion 12

13 HOW IS TRID GOING? The Other Side Longer processing time, requiring longer rate lock From 2 page HUD to 5 page Integrated Disclosure Longer closings fewer closings Cost of compliance with Best Practices Multiple interpretations/lack of standardized closing instructions Increased closing cost to borrowers 13

14 Regulatory and other Proposed Amendments Distribution of Closing Disclosure Lender modification of Closing Disclosure Adjust civil penalties for inflation and apply the increase to past violations. Appropriations Bill CFPB reforms attached. 14

15 Proposed Amendment Will Not Address: changes to the disclosure of the simultaneous issuance of title insurance premiums changes to remove optional form the Owner s Policy of title insurance on the disclosures 15

16 Other Changes on the Horizon New Annotated TRID FORMS no change in substance TILA notations added 16

17 Challenges to CFPB Authority In the matter of PHH Corporation Challenge of Director s ruling and questions the constitutionality of the Bureau s structure. Re-writing RESPA so there are not exemptions No applicable statute of limitations $109 million penalty plus 15 year injunction. State National Bank of Big Spring v. Jacob Lew Director s post-confirmation ratification of his pre-confirmation action is effective. Court deferred question of CFPB s constitutionality anticipating a ruling in PHH appeal. 17

18 Looking Ahead: Transforming the Closing Process CFPB Director Richard Cordray Boston Field Hearing, November 20, 2013 So as part of our Know Before You Owe initiative, we are making a commitment to work with industry to improve the mortgage closing experience for consumers through technology. We believe that eclosings could represent a positive development along these lines, and we want to know more about how we can foster innovation in this area. 18

19 E-Sign/E-Delivery 19

20 Thank You 20