Despite the TILA-RESPA Integrated Disclosures (TRID) Act going into full effect on October 3, there remains some question as to how the rule will be enforced and whether or not lenders and settlement agents will have a grace period within which they will be able to adjust to the new rules. House of Representatives Bill 3192 (HR 3192) has the potential to answer that question by formalizing a grace period.
As we explained in an earlier blog post entitled, “How Will TRID Be Enforced?” the Consumer Financial Protection Bureau (CFPB) has publicly stated that they are aware that TRID compliance is causing serious concerns in the real estate industry and plan to be sensitive to lenders who make a “good-faith effort” to comply with the rule and will “not be punitive” when it comes to enforcement of the rules; but, they do not plan to institute a formal hold harmless period.
Unfortunately, this position leaves plenty of room for interpretation and wasn’t enough of an assurance to placate the industry or lawmakers. The House of Representatives took matters into their own hands and voted on a bill that would formalize a hold harmless grace period regarding TRID changes shortly after the October 3 TRID implementation date. HR 3192 passed the House and now moves on to the Senate.
HR 3192 Was A Long Time Coming
The real estate industry has been lobbying Congress for years about nearly every aspect of TRID, from eliminating the rule, to having it changed, getting the implementation date pushed back, and now, a hold harmless grace period to allow the industry time to adjust to the new requirements without fear of repercussions from the CFPB.
Not only do lenders and settlement agents face severe fines and penalties if they don’t comply with TRID or if they make mistakes under the new rules, they risk being sued by homeowners in cases of accidental non-compliance. Lawmakers appear to agree with the industry that the changes required under TRID are too significant and the timeframe for implementation too short for those in the industry to be fully compliant on Day One.
What HR 3192 Would Do
HR 3192 is known as the Homebuyers Assistance Act and was first introduced to the House Financial Services Committee by Representative French Hill (R-Ark.) on July 23, 2015.
The bill was created to prohibit “enforcement against any person of integrated disclosure requirements for mortgage loan transactions under the Real Estate Settlement Procedures Act of 1974, the Truth in Lending Act and regulations issued under such Acts” until Feb. 1, 2016. The bill also states: “no suit may be filed against any person for a violation of such requirements occurring before that date, as long as the person has made a good faith effort to comply with them.”
Even with industry and legislative support, HR 3192 faces an uphill battle to become law. It still has to pass the Senate, but has yet to be scheduled for a vote. Even if it passes the Senate, it has to go to the President for signing into law, but the White House has issued a statement saying the bill would be vetoed because it would delay implementation of the protections under TRID and hurt homeowners by removing their rights to take action for violations. If it were vetoed, the bill would need to receive a 2/3 majority in both Houses of Congress to become law. HR 3192 did pass the House with a 2/3 majority but that could easily change with time, and it doesn’t take into account how the Senate will vote. According to GovTrack, the bill has a 21% chance of becoming law based on the obstacles in its place.
Set Your Mind At Ease With Help From Easy Soft
TRID is the law. There is no changing that. The only thing HR 3192 would do is give lenders and settlement agents a little bit more time to become comfortable with the changes. You can skip the worry and stop tracking bills like HR 3192 with help from Easy Soft. Our EasyRealEstate Suite and, in particular EasyCDF, is fully TRID and MISMO-compliant.
All you have to do is fill in the blanks and the software tracks your steps, flags any missing or incomplete information, and keeps you on task so you never miss a deadline.
EasyCDF and the EasyRealEstate Suite are available for immediate download at www.easysoft-usa.com or by calling Easy Soft 1-800-905-7638.