Nov. 21: Letters on HMDA help, the cost of regulations, Realtors & CDs, and how TRID’s rollout has gone

For me this week included spending time with veteran bankers and mortgage bankers in Northern California, Colorado, and Kansas City. What I see are a lot of people caring about and doing their jobs, and helping their clients in spite of the continued escalating cost of regulation (which is passed on to consumers) and the nebulous, impossible-to-keep-track-of, web of local, state, Federal, and regulator requirements & regulations. Some say that most LOs and brokers have given up, and have shifted the “keeping track” burden to processors, underwriters, pre-funding QC, and compliance personnel. Many would beg to differ, saying that the successful originators have a very good handle on compliance.


Understandably the CFPB doesn’t appear to care about the cost of regulations, any more than an investor would care about a broker’s cost of business, or you care about the cost of trucking paper towels to your store. Regardless, I received this note from a senior manager along the Atlantic Seaboard. “When I starting tracking costs in mid-2009, average fees for certain brokered loan services were as follows: average underwriting fee of $395, average appraisal fee of $250.


“The underwriting fee for a brokered loan now seems to average around $800 which can be attributed to additional regulatory requirements and time deadlines. The appraisal fee average is now around $450 in our state, primarily due to the addition of the AMC ‘layer.’


“Also, back in 2009, I don’t remember ever having a purchase closing where the title company acted as settlement agent; funds were normally disbursed through the attorney’s trust account. While the trend towards attorneys farming out the settlement/disbursement responsibilities to the title agencies has expanded over the last few years, I believe that the last ‘holdouts’ of attorneys we regularly work with (which until now had still acted as settlement agent) have thrown in the towel and delegated settlement services to title due to TRID. So that adds at least another $375 to the cost of the transaction. The result is that a typical purchase loan at my shop now costs around $975 more than before the regulators added all this consumer protection.”


“Rob, thanks for the mention of revised HMDA.  With the announcement of HMDA, on October 15th, 2015, the Bureau provided industry support materials to assist industry participants to assess and prepare for the changes. This is the first set of materials designed to support regulatory implementation issued in concert with a regulation from the Bureau. Your readers can go to Industry participants that sign up on our website for email updates would have received this information, but others may want to sign up.”


Tony B. asks, “Rob, I keep hearing that the CD cannot be sent to the Realtor by the lender or title company.  We are seeing some Realtors having an authorization form signed at with the contract to gain access to the CD.  What’s the real answer to this?  Can’t we send it to the Realtor if the client is ok with it? I’m hearing so many different opinions I can’t tell what is valid and what is noise.”


I asked compliance expert Annemaria Allen who replied, “One of my compliance officers got this question the other day and our general advice was if the realtor wants a copy of the CD they can ask the borrower to provide them with a copy and the borrower may if they choose to.  The CD is provided by the lender for the benefit of the borrower. The realtors can get a copy of the settlement statement from escrow/title that show the settlement fees. We worry about sharing sensitive information, even with the borrower’s authorization. Those are just our unofficial opinions and are not necessarily backed by any regulation.


“In addition, if a Lender perhaps had an authorization form from the Borrower allowing them to provide the CD to parties to the loan transaction it might work but I would want to make sure that they have clear policy and procedures surrounding this and that the Borrower clearly understands the authorization form. I’m not sure that Lenders will want to take on this risk but it may be a Borrower by Borrower situation. Lastly, in past lives, when working for lenders and/or broker shops, we could never give HUD’s directly to the Realtors – they had to get it from Escrow and/or the Borrower. Unfortunately there isn’t clear regulation or commentary on this.  It’s almost a ‘Best Practice’ that a Lender will have to implement and with that being said…keeping GLBA in mind.”


Bruce Calabrese, president of Ohio’s Equitable Mortgage, challenges the CFPB with, “Rob, I for one, thought that TRID was completely unnecessary and serves no purpose, and I want to tell you the good and bad of it. Somehow we eliminated 8 documents from our loan application package when we implemented TRID. That is something I was telling Fannie and Freddie to do for 15 years, so TRID got that done. Good!


“The HUD is gone! You can tell me the HUD is gone, but when we did the first closing and there was no HUD, it was astonishing. Look, this is just an outright abuse of Government power and it is basically mean spirited, arbitrary and capricious that they removed the HUD. It is like waking up one morning and all the stop signs in the US are now round and painted purple, not red and octagon-shaped. The HUD is the universal document that everyone, from the person working the front desk to the accountant wanting to do your taxes knows and understands universally. It is its’ own language. Gone overnight. There was no reason for it being removed and I could explain it to a HUD novice in 15 seconds.


“I just came from an operations/pipeline meeting. The entire conversation was about dates, process to meet those dates, and deadlines that are arbitrarily set up about which the client could not care less. The client is being notified of things they are already aware of and trust us to deliver on it. If they knew that their process was getting delayed buy this, they would tell us to stop it. We are bothering the clients asking them to sign something that they already know is the case, but have to be bothered days before closing and again at closing. My staff is being distracted from their important work to meet dates that are irrelevant, the clients couldn’t care less about and are very, very cumbersome.  We have Encompass, so I know much of the industry is struggling with the exact same issues. The client loses, the industry loses and the bottom line suffers for these Government inefficiencies. We are making changes to a process that has served everyone perfectly well for 50 years and have replaced it with a bureaucratic process that serves no body well:  is all I can say.”


From Colorado I received this from Bill Kidwell, President of IMMAAG. “I found myself compelled to reply to an American Banker article posted 10/16/2015. Ironically, I happen to agree going to a “committee” leadership function at the CFPB won’t help; probably would hurt. But, director model or commission model unless they start producing regulations driven by actual cause/effect related actions; we’ll all continue to suffer and with a committee the only thing will be delays on anything controversial or important.


“The article about the Republican CFPB begins with, ‘Despite being one of the most effective agencies in the entire federal government (or perhaps because of it)…’ My understanding of the definition of effective is that it means, ‘successful in producing a desired or intended result’. I would ask, what in the name of overbearing government has the CFPB done that could possibly be called effective? Ostensibly, Ms. Warren’s brainchild was created to ‘protect consumers’. When the purpose and objectives as provided for in the authorizing legislation are viewed objectively – I would invite anyone to share hard evidence of effectiveness either moving toward or achieving anything on the list.


“So I must really push back on the premise that this uber-agency is effective. I will, however, align myself with one basic point – I agree that in spite of what I consider to be a failing grade on every level; the problem can’t be fixed by implementing leadership and decision making by committee. We simply need someone at the top who is willing to ‘lead’ the organization based on the purpose and objectives assigned to it. And, someone who has enough ‘intestinal fortitude’ to force a cause/effect evaluation before launching initiatives in the name of consumer protection that have no chance to protect consumers.”


There was this note from a smart mortgage banker. “I have an idea. The government expects the RE finance industry to quote exact amounts consumer must pay.  We are not allowed to change, unless there is a change in the circumstances. Well, the same rule should be applied to ALL government contracts.  The service provider is not allowed to change the amount after the contract is signed. Government contractors are no longer allowed to add cost over runs.”


And this note from the West: “With TRID now in full swing the non-TRID loans are clearing their way through lenders systems and we will be left only with TRID. But, the good intentions of the regulations aren’t smooth.


“Every lender has a handful of loans that we point to that went perfectly. None of us talk about the system issues between an LOS, Doc provider and individual Title/Escrow Companies. There isn’t a great single ‘language’ that is used…and no one loan is the same. Case in point, a 50% LTV Conv Conf R/T O/O SFR…is very different from the 95% LTV Conv Conf O/O purchase with a DPA. Where does TRID end up, it’s here. But, the execution of it needs some work.


Yes, the cacophony about LOS problems continues in spite of TRID’s effective date being over 45 days ago. For example, “Have you heard about the terrible customer service mortgage brokers that we are getting from our lending software since TRID? If you call Calyx the message says callers on hold for more than 1 hours will be sent to voice mail. I have called 3 times left messages and sent emails. They have never returned my call. Try it just for fun: (800) 342-2599.”


Entering the second month of TRID, the industry has expressed minimal delays due to the new integrated disclosures. At least that is what panelists expressed at the “RESPA-TILA Know Before You Owe Rule: Regulatory Issues Forum” during the 2015 REALTORS Conference & Expo that occurred in San Diego. Many panelists shared their experiences with rolling out and implementing the new disclosures, which included the assistant director for Mortgage Markets at the CFPB, the chair of NAR’s Regulatory Issues Forum, vice president of National Loan Production at Quicken Loans and sales division manager of Waco Title. NAR president Chris Polychron said “We are pleased that closing delays and other harmful effects resulting from the new rules have been reportedly few in numbers so far. Nonetheless, as new rules continue to take hold, we anticipate there could be bumps in the road.”  To implement the changes, NAR conducted a range of activities to educate the industry about the changes, which included a webinar on the new rules and joining the CFPB at an event highlighting new tools to help consumers get acquainted to the new forms. NAR also worked with the CFPB to encourage the delay of implementing the rule and to allow a good faith period for those complying with the new regulation.



(Rated PG for sexual situations. But clever.)

Jack goes to his friend Mike and says, “I’m sleeping with the minister’s wife. Can you hold him in church for an hour after the services for me?”

Mike doesn’t like it, but being a friend he agrees. 

After the services, Mike starts talking to the minister, asking him all sorts of stupid questions, just to keep him occupied.

Finally the minister gets annoyed and asks Mike what he’s really up to.

Mike, feeling guilty, finally confesses to the minister. “My friend is sleeping with your wife right now, so he asked me to keep you occupied.”

The minister smiles, puts a brotherly hand on Mike’s shoulder and says, “You better hurry home. My wife died a year ago.”





(Copyright 2015 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)

Rob Chrisman