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24 | TH E M R EP O RT FEATURE diluting energies that should be focused on loan quality. Thus, when considering how lenders are currently faring and expect to perform in coming months or years, the answer is mixed. Digital Risk, LLC, has seen this situation firsthand and found the TRID compliance gaps between lenders' LOSs and the bolt-ons and wrappers provided by tech - nology vendors. The company found that the best approach to reaching a full solution is consult- ing with clients and their technol- ogy vendors to close the gaps and execute a successful TRID implementation. In addition, the company is able to further protect the lender by providing quality control solutions to cover the technology's soft spots. This kind of consultation closes technology and compliance gaps, relinquishes QC teams back to their intended function, and enables lenders to reach a sustainable and compliant operation. The Burden Falls Disproportionately on Community Lenders. A fact that has been inextri- cably linked with TRID from the beginning is that com- munity lenders have struggled with the impact more than their larger, more resource-laden counterparts. A handful of "big banks" have been able to fully integrate TRID in their LOS, while a majority of these banks are working with bolt-on and wrapper technology vendors. As for community banks, the picture is not as bright. At the 2015 year-end, Cordray sent a response letter to the Mortgage Bankers Association (MBA) clarifying that defects can be readily "cured" in most cases, and the Bureau will take a soft stance on enforcement in the first few months following the implementation date. While demands regarding the grace period were semi-successful in ensuring that good-faith efforts would be appreciated and early shortcomings would be under - stood, TRID risk remains high in the minds of most commu- nity lender executives. Without a doubt, the most prominent frustration among banks and lenders of all sizes is that the entities ultimately legally responsible for TRID compliance are not the source of the TRID gaps and failures that have arisen since implementation. Technology vendors are indispensable re - sources for community lenders, yet produce mixed results on TRID changes. To be sure, vendors are facing the same obstacles of the lenders they serve—the rules are com- plex, and everything needs to be programmed in a user-digestible, but legally sound way. However, community lenders are themselves shouldering the consequences of mistakes. The OCC was quick to announce that examinations for TRID compliance would com - mence in 2016, although an exact date was not initially specified. Because the OCC has oversight authority for any bank with assets under $10 billion, this announce- ment understandably sounded alarms among community banks. In the aftermath of TRID, the executives of these banks have been vocal and honest about the struggles they have faced with the vendors they depend on. Technological gaps and inconsistencies have been com - mon in the TRID software that these banks bought and trained on, which results in further costs surrounding proper consultation and quality control support. TRID has effectively brought to the attention of the CFPB an issue that will only get more prominent in the mortgage industry as time goes on. As lenders engage in more efforts to bring millennials into the housing market, the availability and efficiency of lender technology will be emphasized. Vendors are an integral part of technology development in any industry, but community lenders in particular will not have the financial or human resources to develop and manage such technology in-house. The upcoming year, as always, will be an adjustment to the mortgage lending world as it adapts to a new status quo. Mortgage lending is an indispens - able part of most community bank portfolios; as compliance costs rise with every regulatory change and vendors begin to increase risk as they come under CFPB scrutiny, a wave of mergers and acquisitions at the commu - nity bank level would not be en- tirely unexpected. Again, although community lenders are currently surviving TRID implementation, the situation is not sustainable. Lenders Are Not Alone in Their Struggle. T he effects of TRID are by no means limited to lend- ers, however. Settlement agents, mortgage brokers, and real estate agents are facing new obstacles in the origination process. The rules governing the new Loan Estimate and Closing Disclosure mandate an increased degree of accuracy in the mortgage process from beginning to end. As a result, these parties have lost a considerable amount of the flex - ibility they once had. For settlement agents, the issue is in the details. One of the goals of TRID is to make the initial Loan Estimate mirror the final Closing Disclosure as closely as possible. As such, the quotes provided by these settle - ment agencies are under increased scrutiny by lenders who must pay any increase in fees that are unfounded. The quoting process is further complicated for settlement agencies by the CFPB's specific calculation method. For example, title insurance premiums vary widely among jurisdictions, and this has an effect on values such as "cash to close." Estimating these values in the initial Loan Estimate and maintaining them throughout the closing process will require repetition and experience before the process is perfected. TRID has presented a logisti - cal concern for mortgage brokers. The TRID rules clearly state that a mortgage broker has three days to deliver a Loan Estimate to a consumer once the application information is collected. As it is not uncommon for a broker to reach out to three or four lenders on a consumer's behalf, estimates must be requested from lenders quickly to ensure a Loan Estimate will be generated in time. Such mortgage shopping is widely considered to be a benefit for the consumer, but critics argue that consumers may miss out on competitive loan offers that arrive even a day late. Providing late estimates would put a mortgage broker out of compliance with Cordray sent a response letter to the Mortgage Bankers Association (MBA) clarifying that defects can be readily "cured" in most cases, and the Bureau will take a soft stance on enforcement in the first few months following the implementation date.