The Trusted Adviser
January 2016 | Volume 9 · Number 1


It's Not Just You, It's Everybody
Challenges of TRID Compliance

by John G. O'Brien, ATG Vice President

John G. O'Brien photo

It seems like the constant themes for residential real estate lawyers over the last two years have been, "TRID is Coming..." and "Are You Ready for TRID?" or "Are you Best Practices Compliant?" I have attended dozens of seminars on these topics, now that TRID is here, we're all just as confused as when we started. Where do you show lender credits? What about credits from the seller? What about that walk-through problem? And what is the deal with title premiums?

I think we should all follow the advice Packers quarterback Aaron Rodgers gave his fans: R-E-L-A-X! Remember, these are still very early days. It is not just you and your staff who are struggling with these issues, it's the whole industry. Lenders, title companies, realtors, lawyers — everybody. I recently saw an article that as many as ninety percent of deals that have closed since this brave new world dawned October 3, 2015, are not TRID-compliant in one way or another. The entire industry is all still learning. There has been a shocking lack of written guidance from the Consumer Financial Protection Agency (CFPB) about how to address some recurrent practical issues. Making matters worse, a host of software issues that have bedeviled both the mortgage and title/settlement industries combined with a lack of consistency from lender to lender as to how to complete a Closing Disclosure Form (CDF). Rest assured — it's not just you, it's everybody.

As I see it, there are a few things we should all keep in mind.

First, the point of the exercise is to make the entire settlement process more transparent and understandable for the buyer. How did we ever allow the system to devolve to the point where buyers don't know how much their new house will cost until the day of closing? Who can defend that? If TRID makes progress with that, we will all be better off. Let's give it a chance.

Second, the financial penalties for non-compliance are substantial and fall on the lender. As we work through these first deals and search for uniformity, remember that the lender "owns" the CDF. If they want a figure shown in a certain section, document their instructions and show it there! The industry will figure this out eventually. As our own Sandi Allfrey said to me, "If you asked ten different lenders how to prepare a CDF, you would get eleven different answers!"

Third, and most important, remember that ATG is here to help. We are always available to answer your questions. Contact us, read our online materials, and best of all — attend our TRID Tuesday presentations. In these 60-minute sessions, experienced ATG staff members discuss what we've learned so far, answer FAQs, and explain new procedures. The programs get rave reviews and every week brings more clarity and consensus. You will even get MCLE/CLE credit! The sessions are not necessarily sequential (attend one, attend all, or something in between) and there's not always a strict agenda. The next session is February 16 (account and login required, check ATG Legal Education for details). While you're there, click "TRID Seminar Training" on the Program Catalog page to access the previous TRID Tuesday programs.

Our goal as the premier lawyer service organization is to make you a better, more efficient lawyer. That never changes.

So, relax — ATG has your back.

About the Author

John O'Brien has plenty of experience with issues near and dear to real estate lawyers. He spent the first 40 years of his career in the private practice, focusing mainly on real estate and estate planning. He became a member agent of ATG in 1984 and was consistently a top-issuer. He founded the Illinois Real Estate Lawyers Association (IRELA) in 1994 and was president of the ISBA from 2009-2010. He is a frequent lecturer and author for the ISBA, the ABA, numerous bar associations throughout the state, and the IICLE. He serves on the board of Managers of the Chicago Bar Association and is a member of the MCLE Board of the Supreme Court of Illinois.

[Last update: 1-27-16]

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