The Voice • January 2016


A recent report was generated by analysts of Moody’s Investors Service to examine compliance with regulations set forth by CFPB-TRID in October of last year. It reported that newly established mortgages were examined by third-party firms and that more than 90% of the mortgages contained violations against the newly established regulations. The analysts reiterate that many of the violations are “only technical” in nature. They point out that although the violations may be small, it could give the indication that lenders are having difficulty being compliant with the new regulations. [1]

CFPB Director Richard Cordray made a recent statement where he compared the anxiety of the new Integrated Disclosure rule to the “unfound panic” that hovered around the concern of Y2K. Cordray delivers “when our ‘Know Before You Owe’ mortgage disclosure rule took effect two months ago, some again asserted that its implementation would paralyze the market. In fact, applications for home purchase mortgages were up 22% year-over-year in October.” [2]

Findings of the Moody’s report were based upon the third-party firms’ “informal feedback”, which were culled from roughly 300 loans from more than a dozen lenders. The analysts went on to state that “the fact that…such a large portion of the loans had notable violations is significant.” There is the expectation that the number of violations will become smaller and that lenders will adjust their origination systems to be compliant with the new regulations. [2]