5 things to do before TILA RESPA goes into effect
If you are in the mortgage lending industry, you’re preparing for the sweeping changes that the Truth in Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA) Integrated Disclosure (TRID) requirements will bring on August 1.
As you count down these final days until the regulations take effect, you’re most likely preparing for managing the most significant revisions you’ve ever had to make to your businesses processes.
Here are five key things to remember as you approach the deadline – and they aren’t just about making sure you will be in compliance.
1. Don’t plan a summer vacation this year
This may not make you the most popular manager in the office – but you need to plan on having all hands on deck from July through September. During those critical few months, you may consider ramping up additional staffing – and you are definitely going to have to limit vacations for key employees.
2.Get more social
You have to prep your partners, loan officers and customers, but there is no reason it has to be a dry tutorial full of charts and graphs. Offer an educational ice cream social for your current – and past – customers; you’ve now brought added value to your business and are keeping your customers in the loop on how these regulations work for them. A social event can work in-house too. You must prep your loan officers for questions they will be sure to get on the new forms – the official Home Loan Toolkit brochure you are required to use does not explain “form rounding” or the inclusion of mortgage obligations never before included on a GFE. Rather than answering these questions one-by-one on August 1, hold a social teach-in as a fun, educational forum for your staff and real estate agents, closing agents and other referral sources.
3. Don’t forget the bean counters
Have you thought about what the accounting team is facing? Your loan officers aren’t alone in this. It is critical that you make sure your accounting department is prepared – particularly to deal with the modifications your system is making since there are no static line numbers on the new forms. You should begin to assess now if your reports for accounts payable, commissions, accounts receivable, general ledger, etc. need to be modified.
4. No lender is an island
The vendors you use are going through a lot too. You will need to communicate with each and every one of your vendors. You must be sure that you know their release schedule, when all their functionality will be delivered, and what additional support they are providing for fixes or training. You may find that they are offering consulting services that you could take advantage of.
5. Do as you’re (not) told
You need to prepare for what is not outlined in the rules as much as dealing with what is. It is highly important that you create a detailed comparison for the impact on your tolerance verifications, investor overlays, and fee information for points and fees testing.
As you spend the next few months reading through the 1,888 pages, the commentary, the guides, and the examples, you may get lost in focusing on how your loan officers are going to understand and tackle the new rules.
Keep in mind that this new rule will affect everyone in your organization and these new requirements are going to have widespread impact on your business processes and will affect everyone in your ecosystem – far earlier than August 1.