Depending on how a Mortgage Broker runs their operation, the ability to have the wholesale lender doing the Loan Estimate for them has been both a plus and somewhat difficult. Why? Well, it all comes to three specific reasons that are now emerging. Certainly not all wholesale lenders have these issues or circumstances, but I am seeing this with many wholesale lenders.

  1. Many wholesale lenders’ compliance departments have taken steps far beyond TRID compliance to ensure they don’t have an issue with their compliance with TRID and any potential errors. This usually creates more work and adds more time to the mortgage loan application process. The reason is very simple. The Consumer Financial Protection Bureau has not given any warm and fuzzy best effort feelings at compliance during the initial implementation of TRID. Remember this is an entity with unlimited funding, no oversight and run by one individual like a dictator. What could possibly go wrong? So, yes, I do understand the wholesale lender’s being overly cautious, but this still creates timing problems.
  2. It has come to light that many wholesale lenders are now charging for issuing the Loan Estimate. That is they are raising their lender fees when they are issuing the LE. While they cannot pass such a fee onto the borrower, they can raise their lender fees to the Mortgage Broker for this service and this obviously reduces profit.
  3. The last issue is one of significant concern and many Mortgage Brokers are looking to see this problem corrected quickly or they may be forced to pursue a different TRID philosophy. The issue is pretty basic and that is the Loan Estimates being sent to the borrowers are not correct. In some cases, the Loan Estimate has been incredibly inaccurate and has cost the Mortgage Broker the transaction since the numbers are not even close to those quoted to the borrower. This is a serious concern that wholesale lenders need to address now. I suspect they are using basic wage employees, who are not TRID trained per se, who are just punching in numbers without understanding what they mean.

Mortgage Defense will continue to monitor the above issues and keep you current with policies, procedures and cures that wholesale lenders are implementing to address the above concerns.

Looking for more articles on TRID?

TRID: Wholesale Lender or Mortgage Broker Liability?>>
TRID or Absolute Power Corrupts Absolutely: Big Changes Coming in the Mortgage Industry>>

Are You in Need of Compliance Consulting?

Respected around the nation, including Washington, Neill Fendly, President of Mortgage Defense, is regarded as a true professional in the mortgage industry. And in an industry with regulations constantly changing, it's vital to be up to date to remain compliant. Fendly offers consulting to help you understand the rules and regulations set in place in order to help you avoid mortgage fraud.

Fendly and Mortgage Defense will help you find a cost-effective solution so you can continue to remain compliant, viable and competitive in your industry. For more informaiton, contact Neill Fendly at Mortgage Defense by calling 704-574-0364 or by filling out the form on the website.