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» VISIT US ONLINE @ DSNEWS.COM 71 COVER STORY FROM THE BENCH INDUSTRY INSIGHT INDUSTRY INSIGHT lenders are liable for the numbers contained in the TRID Closing Disclosure form regardless of whether the form is prepared by the lender or a third party. Due to this liability, many lenders have chosen to prepare the forms in- house. e threat posed to existing title and settlement agents is that these same lenders may choose to conduct the closings in-house, depriving title insurance agents of the escrow portion of a transaction. e CFPB itself has acknowledged this as a very real possibility during various workshops and webinars. e emphasis on lender-liability is yet another instance where the TRID inadvertently exposes consumers to unintended risk. Closings conducted by lender-owned or lender-affiliated agents mean less independent oversight traditionally provided by settlement professionals. Without third-party neutral settlement agents, in-house closings increase the likelihood of abusive lending costs harmful to the consumer. Moreover, many believe there's a risk homebuyers will pay more for title insurance premiums than they otherwise should if the lender hastily uses the erroneous title premiums from the Loan Estimate on the Closing Disclosure presented to the consumer. THE INDUSTRY MUST MOVE FORWARD August 1st is coming and the Default Title industry had best be ready. First and foremost, this means becoming informed on the CFPB's new rules and requirements. Meet with your regular lenders and business partners about the new disclosures. Lenders themselves will need to know their closing vendors are in compliance. Perhaps the best way to demonstrate this compliance is to self-certify the adoption of ALTA's Best Practices. ALTA released its "Title Insurance & Settlement Company Best Practices" in 2012 as a response to the relative lack of guidance from the CFPB. e guide is designed to provide lenders with an ideal business model by which to judge its vendors' preparation for the CFPB's new regulations. By certifying under the Best Practices, a title or closing company is essentially telling its business partners that it is ready for the CFPB and for TRID. e Best Practices contain seven "pillars" which cover all aspects of the title and settlement services. ese pillars range from the adoption of title production and settlement procedures, to reconciliation of escrow accounts, security standards for the protection of non-public consumer information, and even the tracking of consumer complaints. Beehler is confident that many settlement companies will be prepared, stating that "the changing requirements in policies bring new challenges, but also opportunities." And he is right. Despite the adverse effects of TRID, our industry can prepare for the new regulation. Try Your Best: CFPB Asks for a 'Good Faith' Effort The Consumer Financial Protection Bureau (CFPB) announced in early June that a grace period will be in effect for those servicers attempting to comply in good faith with the TILA- RESPA Integrated Disclosure (TRID) requirements that are scheduled to go into effect August 1. Both mortgage industry stakeholders and lawmakers have been asking the CFPB to delay the implementation of TRID. In a letter to CFPB Director Richard Cordray, a bipartisan coalition in Congress asked for a grace period, expressing concerns that "this complicated and extensive rule is likely to cause challenges during implementation" that could "negatively impact consumers." While the CFPB did not push back the August 1 implementation date of the rule, it attempted to ease some of those concerns last month by saying it would take into account a company's good-faith effort to comply with the rule after it goes into effect. Cordray responded to the lawmakers' letter, stating the Bureau's desire for a smooth transition and that since the rule was published in November 2013, the CFPB has made it a point to "engage directly and intensively with financial institutions and vendors through a formal regulatory implementation project." That project includes interagency coordination, the publishing of a "readiness guide" and other resources, publishing amendments and updates to the rule in response to industry requests, providing unofficial staff guidance, conducting webinars, and clarifying misunderstandings. The CFPB director also pointed out in his response that the Bureau will continue to work with industry, consumer, and other stakeholders to support implementation of TRID after August 1. Some industry leaders praised Cordray's response to the concerns expressed by lawmakers and those within the industry. "I thank CFPB Director Cordray for listening to the requests of CUNA, Congress, and others in our call for a safe harbor period through the end of the year for the enforcement of the TRID rule," said Jim Nussle, president and CEO of the Credit Union National Association (CUNA). Others remained unsatisfied. Reps. Randy Neugebauer (R-Texas) and Blaine Lutkemeyer (R-Missouri), respectively the chairman of the Housing and Insurance Subcommittee and chairman of the Financial Institutions and Consumer Credit Subcommittee, released a statement saying that while they appreciated Cordray's taking a "first step" in showing "regulatory sensitivity" toward those showing good- faith efforts to comply with the TRID rule, they believe that anything short of a formalized "hold harmless" period is "unacceptable."

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