The new TILA-RESPA Integrated Disclosures (“TRID”) went into effect on Saturday, October 3, 2015. Since June, the Consumer Financial Protection Bureau (“CFPB”) assured lenders that it would show leniency to those that make a “good faith” effort to comply with TRID, and the FDIC and OCC recently joined in this approach. Notably, this is consistent with the approach that the CFPB took leading up to the effective date of the Dodd Frank Act Title XIV Rules in January 2014. While it is not clear how long this informal grace period will last, this announcement is welcome news for mortgage lenders, many of whom are struggling with the mechanics of implementing TRID.
Despite these assurances, however, lenders may still face liability. 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. Previously, violations involving the HUD-1 and good-faith estimate were not subject to private rights of action, and purchasers of the loan were not subject to assignee liability. Under TRID, the loan estimate and closing disclosure, delivery, content, and timing requirements are now codified in Regulation Z and not Regulation X, and may give rise to the liabilities authorized by TILA, including private causes of action. Assignees are also subject to liability under TILA for violations that are apparent on the face of the disclosures. As such, while the Feds may be giving lenders a break, they should beware that private actors have not promised to do the same.
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.