There's no shortage of advice, opinions and ideas for how to brace for the impact of TILA-RESPA Integrated Disclosures. But with all the doom-and-gloom of the lead-up to Oct. 3, it's important to keep in mind that these rules don't just appease regulators. TRID also offers lenders better opportunities to engage with customers.
Here are the four main reasons lenders should be excited about the new disclosure rules.
More Customer Touchpoints
TRID will build more points into the process where it is critical to interact with borrowers. Proactive, consistent communication with customers will seem like greater customer service, which will build trust and loyalty.
Since most consumers won't be too familiar with the new timelines, delivering a clear outline of when customers can expect to hear from a lender is key. For experienced borrowers, the eagerness to get on their calendar may be what keeps them coming back.
For new customers, once a lender understands the timing complexities — like the difference between a business day and a creditor business day — they can better set up timelines of when to contact the borrower.
TRID defines business days differently, but lenders can use a loan origination system to calculate these dates, which in turn can be used to build a customer loyalty roadmap with stops along the way for proactive communication.
Contacting past customers through mail, email or another preferred communication method lets them know lenders are prepared and ready to help.
Lenders can take it a step further and invite those past customers to an open house, where they'll get an overview of the changes for the next time they purchase or refinance a home.
Stronger Realtor Relationships
TRID requirements stipulate that the lender is now responsible for the accuracy of the final Closing Disclosure, which was traditionally handled by the closing agent. Lenders now have the opportunity to work with the closing agent to determine who will prepare that disclosure, who will communicate with the customers and what information can be shared.
Although not required, lenders can build extra goodwill by keeping the real estate agents informed about appraisal completion, title ordering and underwriting approval.
Real estate agents have a lot of influence. If a customer is unhappy with the loan process, they are going to tell their real estate agents — and vice versa. Future referrals could be lost.
Better Borrower Questions
With lenders handling closing disclosure documents, they can expect to field more questions from borrowers. Lenders need to look at the Loan Estimate, Closing Disclosure and the new Home Loan Toolkit booklet from the consumer's point of view. What questions would you have? What role would you want the lender to play?
Borrowers traditionally leaned on the closing agent to deal with document errors. Borrowers may not even know the lender is now responsible for final document accuracy or have more control over the process. Ultimately, the consumer doesn't care who answers a question, they just want answers from someone they trust — and if the lender is handling the Closing Disclosure, the borrower will call them first.
More Informed Consumers
As lenders go over the new forms, being upfront about borrower protection guidelines will build loyalty and trust.
Clarify what has not changed, like the borrower's right to inspect the closing statement, or that they do not have to sign a contract just because they have signed an application or other documents, while outlining what's new. The new Loan Estimate documents also point to the Consumer Financial Protection Bureau online complaint portal. Let customers know about the support you offer when they're making this large financial decision.
The new rules may seem daunting for the borrower, but it's important to blend the old with the new.
Conversations about the impending implementation of the TILA-RESPA Integrated Disclosures have focused on many things, but few of them are the benefits of the rules. Lenders do stand to benefit from TRID and should embrace the opportunities it will bring to enhance relationships with present and future borrowers.
Melissa Kozicki is the director of compliance for the Mortgage Builder division of Altisource