SFIG RMBS 3.0 Task Force to Standardize Testing and Compliance Under TILA-RESPA (TRID) and ECOA

As part of SFIG’s continuing work to create industry standards and best practices, the Third Party Review (TPR)/Rating Agency (RA) working group will consider compliance testing and exception grading in areas related to TILA-RESPA Integrated Disclosures (TRID) and the Equal Credit Opportunity Act (ECOA). The group will look to identify certain TRID/ECOA regulatory requirements that neither implicate assignee liability nor otherwise provide critical information for third-party reviewers, rating agencies, investors, or other stakeholders. Once identified, the working group would then consider whether such testing could be scaled back or eliminated.

Separately, the TPR/RA working group will consider the use of forms H-8 and H-9 (available here), and whether originators’ exclusive use of H-8, even in situations where H-9 may be appropriate, warrants compliance testing or exception grading reflecting potential TRID violations.  A number of circuits have ruled that the use of form H-8 in lieu of H-9 does not in and of itself constitute a TRID violation; however, these court decisions are not binding in all jurisdictions. As a result, TPR firms and rating agencies may test and/or grade differently depending on originators’ use of these forms, and the TPR/RA working group will work towards establishing standardization in this area. 

We look forward to continuing SFIG’s work around industry standards and best practices under RMBS 3.0. If you would like to participate in the TPR/RA working group, please contact William.Innes@SFindustry.org.

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