Update on TRID Revisions

Here are some highlights on ALTA’s commentary to the CFPB on the recent proposed revisions to TRID.

Dear Members,

The comments to the proposed revisions to the TRID rules (also known as “Know Before You Owe” rules) issued in July by the CFPB are now being reviewed. No one is sure when the CFPB will issue the final rules nor what effective dates will be established. The TRID Task Force of the American Land Title Association worked hard to analyze the proposed revisions and to develop commentary to submit to the CFPB that would be meaningful and supportive of the title insurance and settlement industry. Here are the highlights of the letter submitted:

• Encouraged CFPB to adopt a two-tiered implementation approach: make effective upon finalization all proposals that do not require a software upgrade; for other changes, give software vendors and the industry adequate time (12 months) to bring software into compliance and train before implementation.
• Applauded the clarification that loans secured by shares of a cooperative unit fall under TRID.
• Applauded the clarification that now avoids the “black hole” and allows an updated Closing Disclosure to reset good faith baselines after a changed circumstance occurs and a Closing Disclosure has already been issued.
• Asked for better guidance on sharing disclosures with real estate agents. It still isn’t clear because the commentary issued by the CFPB did not discuss any state law concerns, nor did it clarify that real estate agents should turn to the creditor as the party that actually controls the decision of whether to share the disclosure.
• Asked for CFPB to prohibit lenders from forcing their liability onto settlement agents. (Can I get an “Amen?”)

I can hear all of you asking, “What about the kooky way title premiums are shown? Isn’t the CFPB going to do anything about that?” The proposed revisions do not address this at all. ALTA submitted a separate letter on this topic, continuing to articulate the strong consumer advocate reasons behind the need to change this rule to allow title premiums to be shown accurately. The highlights of that second letter are:

• Homebuyers deserve to know the true and accurate cost of buying a home. With respect to title insurance premiums, the disclosure rule fails to meet this obligation.
• ALTA contracted with a third-party consumer research company to conduct a survey of consumers. In general, more consumers reacted negatively to the inaccurate disclosure than positively. They expressed confusion at the disclosed cost of title insurance. This confusion is very concerning. It runs counter to the expressed purpose of “Know Before You Owe”.
• The most troubling data point from the ALTA survey is that 10% of the consumers felt that they were being taken advantage of by not being told the true cost of title insurance on the disclosure. As the ALTA letter points out, “this is 10% too many.”
• Showing the actual cost of title insurance that the consumer will pay is an easy fix to the rule.
• So what's the problem? (Actually, that was not in the letter – that’s my two cents.)

A copy of these letters is available on our Information Center:
ALTA Letter to CFPB Regarding Closing Disclosure
ALTA Letter to CFPB Regarding TRID

Switching gears from residential to commercial, I want to give a loud shout-out to our commercial services group. They recently helped Skip Straus on a $46 million transaction in Ft. Lauderdale. Quoting Skip, “Our underwriter…was extremely helpful in bringing the deal to closing by resolving significant title issues.” Our commercial underwriting team, led by Donna More and Jim Kearn, work hard every day to help Fund Members with their commercial transaction needs, from both the title AND closing aspects. Regardless of the level of your commercial experience or the complexity of your transaction, our commercial services team can help resolve difficult issues and get the deal closed. I am certain that once you work with our team, you will have the confidence to work with us on future commercial transactions of any size and complexity. Please reach out to your MAE or someone on the commercial services team on your next commercial deal!

I hope you are getting some value from these emails. I always like to hear from Fund Members, so shoot me an email when you get a chance. And thank you for your support of The Fund!

Best Regards,

Melissa Jay Murphy
Senior Vice President and
General Counsel