The same TILA-RESPA integrated disclosure errors were made by mortgage lenders, though those documents have been required for over three years, a report from MetaSource said.
The top three closing disclosure issues that gave lenders problems in 2017 — tolerance violations, calculating cash to close and timing violations — remained trouble areas in 2018, the company’s post-close quality control audits found.
TRID became effective on Oct. 3, 2015.
“Despite everyone’s understanding of TRID and efforts to correct for it, we’re not seeing the decrease in findings we should be seeing,” Brady Meadows, senior director of mortgage services at MetaSource, said in a press release. “It appears the rush to execute volume is superseding effective document and process management.”
The problem is one of inadequate processes for document management and version control and not any confusion about what TRID requires, he explained.
“There are often excessive versions of loan estimates and closing disclosures in mortgage files,” Meadows said. “This creates errors and difficulty determining the sequence of the issued documents and which is the most recent.”
Lenders should create a clear record of the sequence of the documents issued and to not issue more disclosures than is needed, to create an easy-to-follow record to the final version.
“Think about a regulatory agency digging through your files and what would be the clearest way to present how these documents were issued,” said Meadows.
The closing disclosure errors were three of the top four findings in those audits, with a missing or defective intent to proceed form ranked third.
Incorrect income calculation (the fifth most common finding overall), insufficient assets to close (seventh) and missing or defective employment verification (eighth) were the highest-ranked, nonregulatory QC issues in 2018.
Another TRID error, timing violations on issuing the loan estimate disclosure ranked sixth.