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16 | Th e M Rep o RT 2015 tila/respa update represents a significant work- flow change. The business day calculation also comes into play in determining the impact on when the closing can occur if there is the need to re-disclose. While there are some limited exceptions for closing without the three day requirement being met, the vast majority of closings will now be scheduled around the waiting peri- ods required by the regulation. Key questions between lenders and settlement agents include: • Who is producing which docu- ments? • Have you worked out a method for exchange of data? • Have you figured out how to ensure that the data exchange is managed to ensure privacy? • Have you looked at your con- tractual relationships to make sure they support your new business expectations? Another key business process that lenders will be working through is in changing the ways they may need to work with their settlement agents. Many institutions today rely on settlement agents to complete and provide the HUD-1. While that's still permissible under the new rules in terms of providing the Closing Disclosure, the regula- tion makes clear that the lender is responsible for the accuracy of the disclosure and for ensuring that it is received by the borrower at least three business days prior to consummation. 03 What are the effects on my software systems? A s is often the case, this is- sue is the 800-pound gorilla when it comes to the impact of the TRID requirements. For now, we will limit ourselves to two topics: dual systems and data requirements. Both of these represent areas that lenders will want to be aware of as they work closely with their third- party technology vendors. What we mean by "dual systems" is the need for the loan origination and documentation systems to support both the new disclosures, as well as the existing ones. For loans in flight as of August 1, 2015, they will need to be completed under the old rules, including providing the HUD-1 and closing TIL as they exist today. For most closed-end consumer mortgages, applications received on or after August 1, 2015, are subject to the new rules, which includes the new Loan Estimate and Closing Disclosure. There are transactions that are not subject to the new disclo- sures, such as home equity lines of credit, reverse mortgages, and/ or mortgages secured by a mobile home or by a dwelling that is not attached to real property. These loans will continue to use the current disclosure forms required by TILA and RESPA today. The new forms also present a number of new data and rule re- quirements. There are new calcula- tions that are needed to support some of the disclosures such as best and worst case examples of payment changes resulting from variable conditions within the loan. The variability of the forms is resulting in newly identified data elements. The data standards to support the new Loan Estimate and the Closing Disclosure will exist in MISMO version 3.3 and later. Fannie Mae and Freddie Mac jointly issued their final version of their Uniform Closing Dataset that has 899 distinct elements for just the closing disclosure. Of these elements, 827 are identified as CFPB form requirements, and 72 are identified as GSE requirements. And, while we're talking about data elements, keep in mind that many loan origination systems today are built around the HUD line number structure. For the new disclosures, that concept is gone. Internal systems will likely continue to manage fees in the HUD numbering scheme fashion. They will need to output to a form that no longer carries that distinction, but rather presents the fees alphabetically within specified categories. Finally, don't overlook the systems that you use to gather applications. As mentioned above the definition of an application has changed and thus, the sys- tems that support the application process must be reviewed and perhaps revised. 04 How are my vendors handling the changes, and what is their level of readiness? A sk yourself right now, do I understand where my vendors really are in terms of preparation for these changes? Every day we seem to be hear- ing of institutions being shocked to find out their vendor is not as far along in the imple- mentation process as they had thought. Time is of the essence now with only a few months left to go. At this point, you should be meeting with your vendors and they should be demonstrating with production samples what you can expect to see on August 1. It is time to go beyond PowerPoint presenta- tions and concepts. It is time for you to invite your vendors for a "show-and-tell" session. Your ability to meet your customers needs is at stake, and you need to have the confidence that your partners are far enough along in their solution development to convince you that they are well along the path of being able to produce a final product for you to review. If they are not, you may still have time to pursue a plan B. But you won't have that luxury for long—the implemen- tation date is fast approaching. 05 What is my training plan? E mployee readiness is an integral part of a successful TILA-RESPA implementation. Consider the needs of your particular organization and who you are training. Have you thought about some of the ex- tended players that influence the transaction, such as real estate agents, brokers, title agents, local attorneys who may get involved on behalf of a customer? What about your customers them- selves. What's new for them? Some of these changes will mean new processes. Are you thinking about how to get cus- tomers over the learning curve? Once all the business decisions are made, it will be important to complete any role-specific train- ing based on the requirements It is time to go beyond powerpoint presentations and concepts. It is time for you to invite your vendors for a "show-and-tell" session.

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