Are TRID ‘good faith efforts’ good enough for private actors?

By John M. Pachkowski, J.D.

Although the Consumer Financial Protection Bureau, Office of the Comptroller of the Currency, and Federal Deposit Insurance Corporation assured mortgage lending participants that regarding the agencies’ compliance expectations for the Know Before You Owe mortgage disclosure rule (or TRID rule), Steven J. Kubik of the law firm Kane Russell Coleman & Logan PC indicated that lenders may still face liability.

In an Oct. 2, 2015, statement, the CFPB noted, “During initial examinations for compliance with the rule, the Bureau’s examiners will evaluate an institution’s compliance management system and overall efforts to come into compliance, recognizing the scope and scale of changes necessary for each supervised institution to achieve effective compliance.” The FDIC, in FIL-43-2015, stated the same expectations; and the OCC sent a letter to the American Bankers Association that outlined the agency's initial compliance expectations that are similar to the expectations highlighted in the CFPB’s statement.

In a blog post, Kubik noted, “One of the changes that creditors and assignees face under TRID is liability from private lawsuits, such as from home buyers and investors who question accuracy of the mortgage disclosure forms.” He added, “As such, while the Feds may be giving lenders a break, they should beware that private actors have not promised to do the same.” Kubik concluded, “Unfortunately, this is an evolving area of the law and the scope of lender liability will remain unclear until the courts adopt a uniform approach. In the meantime, lenders should be vigilant in implementing policies, procedures, and controls to ensure compliance.”

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