It’s a whole new world for mortgage lending
By Theresa Reinke
Sponsored by CUNA Mutual Group
The TILA/RESPA Integrated Disclosure rule is the biggest mortgage lending regulatory change we have seen in recent memory. This rule will directly affect the people, processes and technology credit unions use to support both first and closed-end home equity mortgage lending. It will impact relationships with system providers and, most importantly, credit union members and staff. As the August 1, 2015, effective date draws closer, implementation of these game-changing requirements will be the key to success. Determine now who is on your team and how your third-party partners can help. Remember there is no grandfather clause to this Integrated Disclosure rule--on August 1, the new rules must be implemented. To make matters more complicated, all loans initiated before August 1 will require the existing TIL disclosures and RESPA Good Faith Estimate and HUD-1/1A Settlement Statements. Thus, credit unions will be running dual systems for a while. The new Loan Estimate and Closing Disclosure are not merely replacing or combining the existing disclosures. There are many new data elements, calculations and quite a few new restrictions. And the documents will have dynamic elements based on loan type, loan feature and loan purpose. Taking everything into consideration, there could be thousands of permutations of the disclosures. Yes, the face of mortgage lending has changed as we know it. To be fully prepared, credit unions must start making and documenting business decisions in regard to which lending programs to offer and which fees and services to charge. Systems will need to be updated with new data fields and calculations, so it is critical that credit unions work with their system and form providers to make sure they are on track. Procedures should be established to guarantee service providers and settlement agents are walking in step with the credit union to address restrictions and timing limitations. Credit unions need to overhaul the way they go about closed-end mortgage lending. Take the steps now to be fully prepared to implement the disclosure in a compliant and efficient manner on August 1!
Theresa Reinke is a LOANLINER compliance consultant for CUNA Mutual Group. She will be speaking about the TILA/RESPA Integrated Disclosure rule and the actions steps credit unions need to take at the 2014 Discovery Conference on October 15. Also read "Loan Zone: The New Mortgage Timeline."
