By Nicole Plath
I recently attended a meeting with title agents from all across the country to discuss the issues that we, as an industry, face today. Our topic of discussion was TRID (aka “Know Before You Owe”). During the discussion, we were joined by two Lenders who added their unique perspectives. It was an honest and enlightening exchange of experience and ideas, from which one singular message rang out loud and clear: We’re All in This Together!
The Final Rule, published November 20, 2013, and effective October 3, 2015, gave our industry almost two years to prepare for a monumental change to our forms, our processes and our relationship to the consumer. While it may seem like we had more than enough time to prepare for this, I don’t think any amount of time would have truly sufficed. There’s a big difference between training, practicing, and testing and going through a real transaction from start to finish.
It’s no secret that everyone in our industry – Lenders, Realtors, Real Estate Attorneys, Title Agents, and consumers alike – have struggled with adherence to the rule. In December of 2015, Moody’s reported that several third-party firms found TRID violations in more than 90 percent of the loans that were audited, which means they’re most likely not marketable on the secondary market. We are facing two problems here; change, and the rule itself.
Although in effect for over four months now, many people are still just learning the basics of TRID. Even those who are well educated on the Final Rule are struggling to determine how to interpret certain sections of the rule. Its 1,888 pages in length doesn’t necessarily make it specific enough to code a program. Technology vendors are working hard to program the rule, challenged as they are by a general lack of the guidance and clarity that’s required to program effectively. A large amount of variation exists amongst Lenders and Settlement Agents, both key to this process, about exactly how the new forms are to be prepared. Even consumers struggle to understand the new forms and process. However, most of these issues are the trials of change, which will dissipate over time.
I believe there is a light at the end of the tunnel, and we are all working together to see it. Lenders, Realtors, Attorneys, and Title Agents are all working hard to train their staff and to clarify Final Rule interpretation with the CFPB. This struggle is shared by everyone and is bringing our industry together. Our industry needed a change. We needed to improve our communication, our collaboration, and our dedication to the consumer experience. The purchase or refinance of a home have long been transactions that consumers don’t really understand. It’s time to increase the financial literacy of the homebuyer and educate them, not only about what title insurance is, but why it is so important. We live in an age of rapidly advancing technology, wherein so much is possible; yet we’re still passing figures to populate closing documents over fax, phone, and email. Now technology vendors are developing portals where all parties can enter the information in one spot, communicate through that portal and, in the end, generate a closing document in less time and with an audit trail of all changes.
We needed a push, and we got 1,888. Now it’s time to shine.