SFIG Publishes Update to RMBS 3.0 TRID Compliance Review Scope

The Structured Finance Industry Group (“SFIG”) originally published its RMBS 3.0 TRID Compliance Review Scope© documentation in 2016, developed under the leadership of members from Third Party Review (“TPR”) firms across the industry and SFIG’s RMBS 3.0 Due Diligence, Data and Disclosure Working Group. The document was created with an aim to facilitate uniform testing standards resulting from a consistent interpretation of Truth-In-Lending Act liability. This interpretation was drafted by subject matter experts at SFIG member firms, according to our understanding of prevailing legal precedent and informal written guidance and webinars offered by the Bureau of Consumer Financial Protection (“BCFP”), as it applies to the Know Before You Owe / Truth In Lending Act (“TILA) – Real Estate Settlement Procedures Act (“RESPA”) Integrated Disclosure (“TRID”) Rule (78 FR 79730, as amended) across TPR firms.

Since then, the BCFP published additional clarifications to Regulation Z in 2017. Additionally, in 2018, the BCFP published an amendment to the earlier TRID Rule, which provided clarifications around the so-called “black hole” timing requirements of the Loan Estimate and the Closing Disclosure. Finally, it also includes a limited number of updates related to regulatory changes resulting from the passage of S. 2155 early this year. In accordance with the ongoing nature of work published under RMBS 3.0, members of SFIG’s Due Diligence, Data and Disclosure Working Group reviewed these regulatory updates and clarifications and revised the TRID Compliance Review Scope accordingly. This 2018 version replaces the previous version. For the ease of the reader, the new or altered text is highlighted in red, so as to facilitate an understanding of where changes or updates have been made. A side-by-side comparison of the previous version with the updated version is also available.

The underlying premise of this documentation remains the same: to establish a best practices approach to pre-securitization testing logic that will drive the due diligence conducted by TPRs. However, the conclusions set forth in the document do not necessarily reflect how courts and regulators, including the BCFP, may view liability for TILA violations, presently or in the future. SFIG and its membership continue to work with the BCFP toward the goal of providing formal guidance for the benefit of the consumer, primary, and secondary mortgage markets.

The TRID Compliance Review Scope itself, will continue to be reviewed and updated by SFIG and is subject to the same protocols as other SFIG work streams and work product. For questions about the TRID documentation and SFIG’s engagement with the BCFP, please contact Daniel.Goodwin@sfindustry.org. To join any of SFIG’s RMBS 3.0 workstreams, please contact Dallin.Merrill@sfindustry.org or William.Innes@sfindustry.org.  

*Please note: SFIG Membes who would like to download a copy must be logged into the website to view this document. If you do not already have an account, please create one here.

If you are not a member and would like to purchase a copy of the RMBS 3.0 TRID Compliance Review Scope©, please click here for details. If you have previously purchased the RMBS 3.0 TRID Compliance Review Scope, you may obtain an updated version at no additional charge.

Please do not copy and/or re-distribute the documentation without permission from SFIG.

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