FHA joins Fannie, Freddie with TRID non-enforcement period

October 26, 2015

WASHINGTON (10/26/15)--The Federal Housing Administration’s Office of Single Family Housing (SFH) is the latest federal entity that will follow a hold-harmless period for the new Truth in Lending Act-Real Estate Settlement Procedures Act integrated disclosures (TRID) rule.

In a letter to mortgagees, the SFH said the hold-harmless period will run until April 16, 2016.

“SFH is announcing that it will not include technical TRID compliance as an element of its new routine quality control reviews,” the notice reads. “SFH does expect mortgagees to make good faith efforts to comply with TRID, which, at a minimum requires the use of TRID required forms.”

The SFH’s letter follows announcements by both Fannie Mae and Freddie Mac regarding TRID compliance, although neither provided specific dates.

“Until further notice, Fannie Mae will not conduct routine post-purchase loan file reviews for technical compliance with TRID; however, consistent with current practices, Fannie Mae will evaluate whether the correct forms were used in connection with the origination of the mortgage loan,” reads a letter sent by Carlos Perez, Fannie’s senior vice president and chief credit officer for single family. “After a transitional period, Fannie Mae will consider whether to begin such reviews for technical compliance; any such measures will be announced before being implemented.”

Fannie’s letter added that failure to use TRID-required forms will be deemed a violation of good faith, and will render the mortgage loan subject to all contractual remedies, including repurchase.

Freddie Mac sent a similar letter in early October, reminding lenders that Freddie expects good faith efforts, and that failure to use new TRID forms is a violation of good faith efforts.

Freddie’s decision not to conduct routine post-purchase loan file reviews for TRID compliance is also in effect until further notice, and any change to this status will be announced before implementation.

CUNA continues to pursue legislative solutions to put in place a formal hold-harmless period protecting institutions from litigation and enforcement. A CUNA-supported bill, the Homebuyers Assistance Act (H.R. 3192), would put in place such a period through Feb. 1, 2016.

H.R. 3192 passed the House earlier this month, and CUNA has sent letters of support for the Senate equivalent bill, S. 1711.