NMP - December 2016 - 32


✒

TRID, the Election and
What You Can Do Now:
Part I
By Richard Horn

T

DECEMBER 2016 n National Mortgage Professional Magazine n

NationalMortgageProfessional.com

32

he recent election has created a lot of questions
about what will happen to the Consumer
Financial Protection Bureau (CFPB). The CFPB
could be completely "abolished," as described in
the GOP platform, or the structure of the CFPB
could be changed to a commission, and its
budget moved under the Congressional appropriations
process. Under either of these scenarios, it is quite possible
that the TILA-RESPA Integrated Disclosure rule, otherwise
known as "TRID," will remain on the books. Implementation is
largely complete and there have been quite a few industry
studies that support the benefits of the rule. Further, a full
repeal of the TRID rule would likely require the industry to "reimplement" RESPA 2010 and the TIL. As much as everyone
loved the revised Good Faith Estimate (GFE), it may be better
to continue with TRID and seek improvements to the rule
under the Trump Administration and Congress.
Considering this, it is prudent for lenders to continue
improving their compliance with TRID. Lenders are currently
still subject to enforcement by both federal and state
regulatory agencies and private lawsuits by borrowers. Also,
the CFPB's recent proposal to amend the TRID rule did not
address liability or the rule's cure provisions, which means the
current legal risk for violations of the rule will remain for some
time.
One area for improvement is a lender's relationship with
settlement agents. The lender is responsible for all of the
information on the TRID disclosures, including the itemized
list of closing costs and the prorated taxes and utilities. The
rule expressly requires lenders to disclose the "actual terms
of the transaction," which means lenders must get it right. But
the rule does give lenders a break for the CDs provided
before closing. The commentary allows lenders to use the
"best information reasonably available when the actual term is
unknown to the creditor at the time disclosures are made."
This standard requires the lender to "exercise due diligence in
obtaining the information." The commentary provides as an
example of "due diligence," a creditor requesting information
from a "settlement agent for homeowner's association dues or
other information in connection with a real estate settlement."
In addition, the commentary states that if a lender does not
request the actual cost of title insurance from the title
insurance company and instead discloses an estimate based
on a different transaction, the lender has not conducted "due
diligence."
To satisfy the "best information reasonably available"
standard, lenders should ensure they have processes in place
to conduct "due diligence." Lenders may want to consider
alternatives to manual processes to request this information
from settlement agents, such as technology solutions.

Richard Horn of Richard Legal PLLC, was formerly
with the CFPB, where he served as senior counsel
and special adviser and led the final TRID rule and
the design and consumer testing of the TRID
disclosures. He may be reached by e-mail at
Rich@RichHornLegal.com.

SPONSORED EDITORIAL

attracting new career pros continued from page 29

of both lenders and AMCs, which
may have requirements in addition
to that of lenders and investors, to
use apprentices for appraisal
assignments. Also, even when a
candidate for accreditation can
find a supervisory appraiser to
work under, many states have
rules that limit the ability of
trainees to work independently,
which negates the value of taking
on a trainee.
Specified education, including
appraisal curriculum, and
experience for any level must be
completed prior to taking the
National Uniform Licensing and
Certification Examinations.
If these trends continue, they
may eventually impact the
origination process, producing
longer waits to complete
residential appraisals, pricing
pressures on appraisals and the
temptation for lenders to outsource
appraisals to less verifiable thirdparty aggregators.
Where do we go from here?
Before a lack of experienced
appraisers becomes an issue, we
should work together as an
industry to find reasonable ways to
accelerate the accreditation of
appraisers and, also, encourage
more people to consider a
mortgage industry career. Some
workable approaches might
include:
l Allowing hours of
complementary fieldwork to be
accepted toward the total hours
of experience required for
accreditation. Examples might
include working within the
review department of a lender,
at a title company or with a real
estate agency.
l Streamlining career entry by
reducing, within reasonable
numbers, the apprentice hours
required for any level of
accreditation.
l Removing the time barrier
required for achieving these
experience hours. Currently,
hours must be completed in no
fewer than 12 months for
licensed appraiser, 24 months
for certified residential appraiser
and 30 months for certified
general appraiser. Why delay a
motivated and disciplined
appraiser candidate who can
complete the required hours
sooner?
l Devising incentives to
encourage experienced
appraisers to mentor trainee
appraisers, as was common
when appraisal was more of a

"legacy" or family-related
profession.
l Encouraging more universities
to offer or expand appraiser and
real estate-related curriculum so
that a bachelor's degree would
include some or all the required
appraisal specific education.
l Greater participation by the
industry in real estate career
days and other modes of
recruiting.
AQB responds
Fortunately, there has already been
significant movement this summer
and fall (2016) within the Appraisal
Qualifications Board to amend real
property appraiser criteria. The
AQB has now issued two drafts,
May 18, 2016 and Sept. 15, 2016,
of Proposed Changes to the Real
Property Appraiser Qualification
Criteria.
Provisional concepts include:
l Eliminating the college-level
education requirement for the
Licensed Residential credential
in its entirety and, also,
changing the bachelor's degree
requirement for the Certified
Residential credential to an
associate's degree.
l Allowing practicum experience,
where trainees do course work
and "practice" appraisals under
the supervision of a licensed
appraiser, be eligible for no
more than 50 percent of the
experience requirements.
l In respect of the core
curriculum, the National Uniform
Licensing and Certification
examinations and Uniform
Standards of Professional
Appraisal Practice (USPAP)
instruction required of all
appraisers, reducing required
experience hours to 1,000 hours
for Licensed Residential, to
1,500 hours for Certified
Residential and to 2,000 hours
for Certified General
accreditation.
The AQB rejected allowing
experience in other professions to
satisfy any Qualification Criteria.
Additionally, a main thrust of these
proposals, as suggested above, is
to have university courses fulfill
more of the core curriculum
required of becoming an appraiser,
as well as accepting College-Level
Examination Program (CLEP)
exams in partial fulfillment of
professional education
requirements, both of which
continued on page 107


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