Community lender confidential: Why TRID is far worse than anyone thought
[{"id": "cy02x3m", "text": "so, is this a commercial issue? Isn't a HUD-1 only involved in a residential closing? Does it apply to 1-4 unit rentals? ", "replies": [{"id": "cy04eoc", "text": "no. the issue is real, but doesn't affect commercial real estate at all.", "replies": [], "depth": 2}, {"id": "cy0d2rn", "text": "Impacts commercial multifamily in that the ranks of renters will continue to swell as more and more people won't be able to get loans.  Although, much like everything else, could certainly change with the flick of a bureaucrat's pen, in the near term doesn't seem to be the case. ", "replies": [], "depth": 2}], "depth": 1}, {"id": "cy07nxh", "text": "&gt; Bailey said that his team is \u201cnit-picking\u201d every single document to make sure there are no minor errors that could \u201ccome back to haunt us in the future from a regulator or some sort of lawsuit.\u201d\n&gt; \n&gt; Operating with that level of fear is common among the three lenders that HousingWire spoke to.\n&gt; \n&gt; \u201cWe\u2019ve had huge anxiety at our company over doing it right. We want to do it right,\u201d Welch said.\n\nMaybe if some of you were more diligent before they wouldn't of had to cram this down your throats.....", "replies": [{"id": "cy08msk", "text": "there was no need to be diligent when you could sell your portfolio on the secondary market so easily. \n\nas a portfolio lender, this is how we've always done it, because you have to live with those credits 5, 10 and 15 years down the line.", "replies": [], "depth": 2}, {"id": "cy0djft", "text": "I do agree, to a certain extent, with that general sentiment, however gov't was just as complicit in the fleece as everyone else during the 05-07 boom.  What the article does illuminate, albeit obliquely, are incessant demands of CPFB staff for compliance without giving any procedures to follow to ensure that compliance can be made.  A few of my mortgage broker friends have been gripping about these changes to me for several months.  The costs to implement have been stratospheric, especially from software and ongoing legal advisement standpoints, which is why you're seeing a general cull of mom-and-pop and more regional (think credit union and the like) home mortgage/broker outfits, essentially consolidating the industry into a few big boys.  Depending upon your vantage, having only a few key players can be either good or bad.  From a business standpoint, I'm sure the big banks/title companies fully appreciate gov't stomping out any and all competition. However the door does swing the other way and having a few, easy-to-target sacrificial lambs when plans fail is a sound bite made for a Congressman. ", "replies": [{"id": "cy0dz9m", "text": "a lot of that is just due to change though no?  Is there anything specifically that is expensive to comply with?  Or to put it another way, when whatever software providers are serving the credit unions etc now have some time to get all the way around this, legal precedent is set, and consultations fully understand the law, is there actually anything that is going to make this expensive to comply with?\n\nI guess tldr is this is a big deal because it requires a lot of changes, or because actual compliance is difficult?", "replies": [{"id": "cy0fmyz", "text": "I know the stress isn't so much from compliance, per se (although costs for software, which aren't universal yet, are steep), rather concerns stem from what qualifies or disqualifies a mortgage from 'safe harbor,' meaning future litigation can't stem from the mortgage application process.  Main thrust of the discontent stems from ATR (ability-to-repay) provisions.  How do you qualify it, since CPFB doesn't provide guidance, does having a job for more than a year determine ability to repay?  What happens if the person looses their job, did the mortgage broker take that into consideration?  Or if the person is self-employed, how many documents are necessary qualifying their income, only income statement? Paycheck? Amount in savings? (I'll post later since gotta jet....)", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "cy08x8f", "text": "Can someone ELI5? I read the article and saw a bunch of one-off quotes about how TRID is bad, but the arguments seem to be \"it changes the way we do things,\" and \"it takes more time because we have to do better due diligence.\" \n\nWhat am I missing here?", "replies": [{"id": "cy0bqb7", "text": "I may be slightly off here as I don't have to deal with this at all, but I think the big ones are mainly they have to give the borrow docs 3 days before closing and the lender their self can have to pay for errors or fees that are added but not in the initial loan estimate.\n\nIE you can't send a borrow loan docs an hour before closing and put whatever random bullshit on there you can think of anymore.  I don't necessarily see that as a bad thing...\n\nI think there are some things that make it more difficult for the closing agent/lender to communicate with the agents too\n\n--edit-- that is mostly customer facing.  I have no idea what added due diligence they must do", "replies": [{"id": "cy85hb9", "text": "Although you'll have to be familiar with the loan process to understand all the language in this link, here's [JPMorgan Chase's FAQ](http://www.housingwire.com/ext/resources/files/Editorial/Documents/TRID_FAQs_121615.pdf) regarding TRID-RESPA", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}]