Most lenders' quality control headaches were triggered by the Consumer Financial Protection Bureau's Truth in Lending Act-Real Estate Settlement Procedures Act integrated disclosure rule.
Twelve of the top 15 quality control issues in 2016, as identified by third-party mortgage compliance service provider MetaSource, were TRID-related. The findings were based on a review of thousands of post-close QC audits performed by the Utah-based company.
The top six QC issues were all caused by TRID:
1. Correspondence of information listed in the "Calculating Cash to Close" table in the closing disclosure to the information cited on the last loan estimate.
2. Borrowers' receipt of a CD at least three business days prior to consummation.
3. Providing the CD in the file for review.
4. When fees within the zero tolerance category increased without a valid reason, curing them on the final CD.
5. Supporting all required revised LEs by documentation of a valid Change of Circumstance and providing it to the borrower within three business days of receiving the information causing the re-disclosure.
6. Providing LE to the borrower not more than three business days after receipt of application.
"TRID was such a significant change and many loan origination systems weren't completely ready for it," said Mary Kladde, MetaSource senior vice president of mortgage services, in a news release. "QC was largely left out of the thought process. Overall, it has been a major pain point throughout 2016, although it does seem to be leveling out."
The leading non-TRID-related issue, which ranked seventh on the list, was providing verbal verification of employment based on automated underwriting system requirements. The only other non-TRID QC issues to make the list were providing matches of buyer income figures and providing verification of assets for review, which placed ninth and 12th, respectively.
