CFPB Eliminating TRID Due To Hurting Versus Helping Borrowers


This ARTICLE On CFPB Eliminating TRID Due To Hurting Versus Helping Borrowers Was PUBLISHED On November 27th, 2019

CFPB Eliminating TRID
Gustan Cho Associates

Breaking News on CFPB Eliminating TRID:

  • The mortgage industry was completely revamped after the 2008 Credit and Mortgage Meltdown
  • All subprime lenders closed their doors
  • Teaser rates were the cause of countless homeowners foreclosing on their homes
  • Mortgage Fraud was common and was blamed as part of the reason why the mortgage crisis started
  • The NMLS was created and implemented
  • Predatory Lending was a way of doing business
  • Regulators and Lawmakers put their heads together and created the powerful Consumer Financial Protection Bureau (CFPB)
  • The CFPB was the new sheriff in town for mortgage companies
  • The self-regulatory government agency had the power to investigate, hear, decide, and fine lenders if they violated any laws
  • Consumer Protection was now the name of the game
  • One of the landmark regulations the CFPB created and launched was TRID
  • TRID was created and implemented by the federal agency to protect consumers
  • However, over the years, TRID is hurting versus helping mortgage borrowers
  • This is the reason the CFPB is thinking of making changes and/or totally eliminating TRID

In this article, we will cover and discuss CFPB Eliminating TRID Due To Hurting Versus Helping Borrowers.

When Is The CFPB Eliminating TRID

When Is The CFPB Eliminating TRID

CFPB Eliminating TRID is not finalized. However, the independent powerful self-regulated Consumer Financial Protection Bureau has been serious about either modifying and/or eliminating TRID altogether. The CFPB may make minor and/or major changes to TRID. The possibility of CFPB Eliminating TRID completely is also a good possibility.

Michael Gracz of Gustan Cho Associates, an industry mortgage regulatory expert said the following:

And next up on its list to review is the TILA-RESPA Integrated Disclosure rule or TRID, and it looks like eliminating the rule entirely is not off the table. The bureau plans to look at TRID’s effectiveness in meeting the purposes and objectives of Title X of the Dodd-Frank Act, the specific goals of the rule and other relevant factors. And the CFPB is opening up its assessment for public comments. It is looking for recommendations to improve the assessment plan and recommendations for modifying, expanding or eliminating the TRID rule, among other questions. The TRID Rule implemented the Dodd-Frank Act’s directive to combine certain mortgage disclosures that consumers receive under TILA and RESPA and requires that all creditors use standardized forms for most transactions. Creditors are also required to provide the Loan Estimate and the Closing Disclosure forms to borrowers within three business days.

The launch of TRID caused many problems and concerns in both the mortgage and real estate industries.

Negatives Of TRID

What are Negatives Of TRID

Many housing market experts think it was hurting versus helping borrowers.

  • The paperwork and unnecessary 3 day waiting period caused issues with homebuyers, sellers, and real estate professionals
  • TRID was not popular by lenders, realtors, homebuilders, and title companies
  • TRID went into full effect on October 3rd, 2015
  • The concerns of how long it will delay loans to close became a reality
  • This holds true for homebuyers and sellers who were in a limited time crunch
  • The housing industry became used to TRID and now there is little or no problems with the mandatory 3-day waiting period requirement
  • There are instances where a borrowers get clear to close and still cannot close right away and wait out the three day waiting period

The CFPB is currently reviewing on which changes, if any, or eliminating the three-year-old rule.

Impact Of CFPB During Trump Administration

What is Impact Of CFPB During Trump Administration

President Donald Trump is a firm believer in less government regulation. Since Donald Trump became and got sworn in as the 45th President of the United States, the Trump Administration has been working diligently in deregulating the CFPB and the banking/credit/financial industry. Donald Trump and the Trump Administration firmly believe that less government regulation is key to economic success. Today, due to TRID, if a borrower is in an emergency and needs to close right away, they need to wait three days after the clear to close and final CD before they are able to do so. Regulators meant well when creating TRID but ended up backfiring and becoming more of a negative rather than a consumer protection benefit.

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