The effect of an improving economy on TRID risk


Recently, we released a press release about TRID risk based on an internal study we performed to evaluate the potential increased risk lenders face in an improving economy. If you’ve read our previous posts on this topic here and here, you know we’re focusing on the factors that can increase the lenders overall non-compliance risk.

In this study, we looked at the increased TRID non-compliance risk lenders face just based on the current market conditions. In a purchase money market, lenders need more time to close loans, but with the recent trend of more jurisdictions changing recording fees, that means more of a chance that lenders will get the numbers wrong when they disclose to borrowers.

As you know, lenders can’t afford to get the numbers wrong and still remain in compliance with TRID rules, so more lenders are relying on Ernst’s fee data to let them know what it will cost to close the loan on their anticipated closing date.

As our CEO Gregory E. Teal pointed out in the release: “Knowing in advance what future fees are predicted to be gives lenders more confidence in the actual cost to close the loan, so they are increasingly relying on our patented technology to do that for them. When they enter a projected close date, we can frequently tell the lender exactly what it will cost to close on whatever date they choose.”

We call this date forward and it allows the lender to disclose to the borrower the projected costs to close without the fear that they will have to re-disclose the fees again prior to the closing date. Ernst’s patented monitoring program works together with the date forward calculator to validate for the lender and title closing agent that the anticipated fee change actually went into effect.

Best of all, Ernst’s monitor service is guaranteed. Together the two programs provide a complete solution for calculating 100% accurate fees from the moment the LE is issued to the borrower.

You can mark that risk mitigated.