Everyone is seeking out ways to manage TRID prior to its implementation on August 1st of this year. Perhaps one of the easiest places to start is your fees.
The first thing you may want to consider is standardizing your lender fee sets versus having your lender fee sets all over the place. I still hear lenders tell me that in each branch the originators have to “price to target” and “have their own set of fees”. If this is happening in your company you may want to reconsider that practice for TRID, and for reasons that go beyond TRID.
For TRID you are going to have to manage tolerances to the penny. Imagine trying to do that when multiple branches have different fee structures! One wrong move and “boom” you’ve lost money.
And of course, when it comes to Fair Lending these differing fees just cause nightmares when trying to demonstrate that similarly situated clients were given the same rate and cost.
You will also need an accounting of fee charged-to-fee collected. Additionally, you will need to map all lender credits to the exact fees that were offset by the credit, to demonstrate that the entirety of the credit was given to the consumer. As you can imagine, inconsistency in your fee approach can cause an accounting nightmare that will ultimately cost you more money.
Finally, consider how your fees or fee templates populate between the technologies that you use to originate. They should all be consistent because that is what they examiners will be looking for. If the systems do not communicate fees to one another, you may need to keep multiple fee tables up to date in varying systems until that is worked out. But you should never just “let it go” until perfect integration happens.
Strong executive teams know that their pricing engines can manage the corporate profits in ways that benefit the company without harming the consumers. This might be an area you want to investigate in order to keep your cost to originate down and maintaining proper profit margins to thrive in business.
As I mentioned in my last preparedness tip, break free from the mindset that you can still do business the way that you’ve always done business. Regulation has forced the evolution of the workflow and smart companies will adjust accordingly.
