Lenders in the residential mortgage space are hopeful that the new leadership at the Consumer Financial Protection Bureau (CFPB) will open the doors to a wider dialogue between the agency and the industry, according to the STRATMOR Insights report, released by mortgage industry consultancy firm, STRATMOR, on Thursday.
The report studies the impact of these leadership changes on the mortgage regulatory landscape specifically on the TILA RESPA Integrated Disclosure Rule (TRID). Despite regulation expanding with the new HDMA guidelines that took effect in January 2018, the trend seems to be going away from “regulation through enforcement,” making lenders more hopeful of a positive dialogue with CFPB.
“If it comes to fruition, the move away from “regulation through enforcement” would be a huge benefit to lenders who continue to act as if they are but one mistake away from a CFPB penalty and having their networth slashed,” said Rob Chrisman, Senior Advisor at STRATMOR.
The report also studied the initial costs of TRID-compliance with lenders who were surveyed pegging the cost at $209 per loan. However they projected this cost to decline to $160 per loan net of costs recovered through additional loan charges.
“The initial implementation steps for TRID did not go well, especially in setting expectations with settlement agents,” says Chrisman. “And, TRID increased the per-loan costs and impacted approval-to- close cycle times in such a way that it wasn’t clear, long-term, what the overall costs would be.”
In a related article in the report, Matt Lind, Senior Partner at STRATMOR analyzed the scale, scope and impact on borrower satisfaction of problems that occur during loan origination. “One out of six borrowers experiences one or more problems during loan origination, which causes a significant drop in satisfaction, especially if they are not resolved,” Lind noted.
The report also indicated that increased communication between borrower and lender, a key TRID goal, significantly improved overall borrower satisfaction rates. “CFPB rules have, overall, had a positive impact on borrowers and lenders,” said Chrisman citing STRATMOR’s MortgageSAT data that shows significant improvement in borrower satisfaction scores when borrowers are contacted prior to a loan closing.