As everyone in the real estate business knows -- and new buyers and sellers are finding out -- TRID (TILA-RESPA Integrated Disclosures) became the law of residential mortgage lending and financed sales last October. TRID is the work of the Consumer Financial Protection Bureau (CFPB). The trouble with TRID I am not one of the anti-government types, nor a reflexive opponent of regulation or even the CFPB. The credit bubble, 2002 through 2007 was the worst regulatory failure of my lifetime -- by the absence of regulation. The CFPB has done some good work in choking abuses of payday loans and loan servicers of all kinds. However, TRID is the worst regulatory act of my life, foolish and arrogant. Its lesser failure is its operational effect on lending. All of us in the mortgage business now spend more time on compliance with obtuse rules than on lending. All of us have had to staff-up, and every consumer pays the price. The first big sign of CFPB gravel in our gears: The drop in ...
- Shopping for a loan can be a good idea. But not every product and service can be reduced to price-quantity-part number.
- Those consumers most vulnerable as lender pigeons are also least able to understand disclosures and contracts, and making them more complex is a fool’s errand.
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