Magazine article Mortgage Banking

An Apple Alum Talks TRID and More

Magazine article Mortgage Banking

An Apple Alum Talks TRID and More

Article excerpt

A JUNE PROPOSAL from the Consumer Financial Protection Bureau (CFPB) to push back the start date for new mortgage disclosure forms pleasantly surprised Don Gaspar. "We'll take any time extensions," proclaimed the chief technology officer for Palm Bay, Florida-based ISGN Corporation.

Delaying implementation until Oct. 3 of the revamped Truth in Lending Act (TILA)-Real Estate Settlement Procedures Act (RESPA) Integrated Disclosure rule (TRID) gives the industry two more months to prepare for the operational changes that the rollout will demand.

Automating overhauled consumer disclosures for estimating loan costs and providing closing information by itself "isn't rocket science," Gaspar acknowledges. "We're not splitting atoms."

However, those forms are part of a rule issued by CFPB in November 2013 that ran on for 1,888 pages. Even with that detail, some lenders contend the guidelines aren't clear regarding how to proceed in certain situations. Coordinating loan closings under the new rules may become problematic as a result.

ISGN put together a team of compliance and legal experts, business managers and engineers to translate CFPB's rule into a Web-based solution. But setting up new forms is just the start for mortgage technology firms. Additional time is necessary for testing software-- such as ISGN's Gators[R] settlement services and vendor management platform-- for compatibility with other systems.

Software integration between providers "has to be perfect," says Gaspar, for the industry to function well after TRID debuts. Settlement software must work with numerous other pieces of industry automation.

Multiple loan origination systems need to seamlessly plug into a tool such as Gators. Additional data then must flow back and forth between title companies, appraisers and other closing service providers. Testing these connections is the only way to make sure they work, Gaspar explains.

Software providers also must be certain the information placed on disclosure forms translates accurately into MISMO 3.3, the new e-commerce data standard set up by the Mortgage Industry Standards Maintenance Organization Inc. (MISMO[R]).

CFPB's announcement of a delayed effective date for the new rule reportedly was sparked by an administrative error on the bureau's part. But it was fortuitous, because in June multiple software providers were just starting the testing process.

Technology firms aren't the only ones working feverishly to be ready for business when the new disclosures are legally mandated. Lenders are subject to CFPB enforcement actions if they aren't in compliance, and "some are scared" they could be fined for lapses under TRID, according to Gaspar.

"It could be confusing" initially for loan officers trying to do their job under the new system, admits Gaspar. "There will be errors," he notes. Mortgage firms would appreciate having adequate time to see how the new disclosures fit into their workflow, while also training their staff regarding the rules.

Behind the curve

Gaspar is a firm believer in technology's ability to help companies thrive by meeting their customers' expectations. He grew up professionally in Silicon Valley, where he worked on product development at Apple Computer and other firms. …

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