More than 68% of loan defects reported in 2016 were related to the TILA-RESPA Integrated Disclosures (TRID) rule, data from mortgage software firm ACES Risk Management (ARMCO) shows.
The firm’s Mortgage QC Industry Trends Report for the fourth quarter of 2016 and calendar year 2016 shows that the benchmark Critical Defect Rate increased slightly, from 1.27% in the third quarter of 2016 to 1.50% in the fourth quarter of 2016.
In fourth quarter, purchase transactions among the subject group comprised 51% of the benchmark data, up from 48% in the previous quarter
“The data suggests lenders are getting more adept at complying with critical TRID-related issues,” says Phil McCall, chief operating officer for ARMCO, in a release. “However, new areas of concern are beginning to spring up and an early correlation can be linked to a more purchase-focused market.
“Lenders need to learn from their own defects if they want to protect themselves against compliance-related issues, but they also need to stay apprised of changing trends if they want to mitigate the increased risk of fraudulent activity that is inherent with a purchase-driven market,” McCall adds.
To obtain a copy of the report, click here.