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18 | TH E M R EP O RT COVER STORY effectively. It takes significant project management, funding, and human capital commitment from all stakeholders. "To minimize the impact, the entire institution must buy into the idea of effective project management that runs from well before until well after an effective date," said Sabatowski. "Resource allocation given competing priori - ties must always be considered." Cautious of Hurdles C ongress enacted the Home Mortgage Disclosure Act (HMDA) in 1975 and the Fed- eral Reserve Board's Regulation C implemented it. On July 21, 2011, the rule-writing authority of Regulation C was transferred to the CFPB. According to the CFPB, HMDA data is important because it helps show whether lenders are serving the housing needs of their commu - nities, as they give public officials information that helps them make decisions and policies, and they shed light on lending patterns that could be discriminatory. The HMDA is the big "new" compliance challenge that profes- sionals in the mortgage industry are struggling with—even though the Office of the Comptroller of the Currency (OCC) and the CFPB have announced they won't enforce penalties for data errors in 2018 and 2019, and that they intend to open rulemaking to reassess the regulations as a whole. Michael Cremata, Senior Counsel and Director of Compliance at ClosingCorp, said lenders are still required to collect and report HMDA data as of Jan. 1, 2018. And, if material data errors are discovered, lenders may be required to resubmit. "So, it's not as if the CFPB and OCC have done away with HMDA altogether," said Cremata. "The stakes may not be as high for noncompliance, and perhaps that's allowed lenders to sleep a bit easier at night, but the requirements themselves have not changed. The operational challenge presented by HMDA is as great as ever." Richard Horn of Richard Horn Legal, PLLC is a former CFPB Senior Counsel and Special Advisor who led the rule inte - grating the mortgage disclosures under the Truth in Lending Act and the Real Estate Settlement Procedures Act into the TILA- RESPA integrated disclosures. According to Horn, despite the CFPB's recent announcement, "if lenders take their foot off the gas at this point, they might not identify issues until it's very difficult to correct the data. And the 2018 data, violations and all, will not disap - pear after it's reported, in whatever form the CFPB ends up requiring." All that being said, the CFPB's recent announcement indicated that it plans to look at revising the HMDA rule, including the scope and new discretionary data points. This uncertainty does complicate matters. "Lenders may want to consider planning to comment on any future proposal, considering that the bureau's new leadership is likely to be more understanding regarding compliance difficulties and burdens than its previous leadership," Horn advised. The fair lending implications associated with the new HMDA rules are enormous, according to Edward Kramer, Senior Advisory Board Member, Treliant, LLC. The filing of the expanded HMDA data and its expected pub- lic release will become a resource for community organizations and consumer watchdog groups. Additionally, these challenges provide further complexity for originating loans. Concerns about following all regulations correctly distract a mortgage professional from purely helping their con - sumers and their specific needs— paralyzing a mortgage professional from doing intuitively the best thing at the moment, for fear of compliance implications. "These regulations, although implemented with the consumer in mind, can trigger consumer suspicions and make them turned off on the mortgage applica - tion experience as a whole," said Macdonald. "Mortgage profession- als spend an inordinate amount of their time with consumers trying to overcome these suspicions in- stead of trying to determine how best to suit consumers' needs." Don't Look Down T he other topic among regulatory concerns is the CFPB's TILA/RESPA Integrated Disclosure (TRID), which is designed to provide more clarity to consumers who have tradi- tionally been underwhelmed with the process of closing a mortgage loan—and the lack of regulatory clarity on TRID 2.0 is still creating challenges. John Vong, President of ComplianceEase, shared his point of view when it comes to imple- menting the TRID rule. "While TRID 2.0 went into effect last year, compliance isn't mandatory until Oct. 1, 2018. This unique situation can raise questions as to what ap- proach lenders, and their compli- ance partners, should take," he said. In addition, Donna Clayton, SVP & Chief Compliance Officer at LenderLive, said the lack of regulatory clarity on TRID 2.0 presents the industry with the potential for the continuation of numerous interpretations and the potential for a federal or state regulator to cite findings as a TRID violation. Clayton expressed four main issues for mortgage professionals working to comply with these regulations—title insurance, "the black hole," sharing of the closing disclosure (CD), and clarification of "good faith" efforts. "The revised rule did not address the odd method of disclosing split title insurance or procedures to avoid liability," said Clayton. "The CFPB said it would not address or change the regulatory text or commentary re - garding the simultaneous issuance of title insurance." Therefore, the loan estimate must disclose the full amount, but does not need to disclose the owner's title insurance premium (OTIP) and lender's title premium (LTP) at the discounted amount, according to Clayton. As a result, there is still confusion as to how the LTP must be disclosed. Second, TRID 2.0 did not initially address the changes in fees between delivery and closing (a.k.a. "the black hole"). However, shortly after the 2017 rule was published, the CFPB issued a separate proposal to address "the black hole." It removes the current four-day business limit before closing to reset tolerances with "It's our job to be sure the businesses build compliance into their processes and dedicate sufficient resources to evaluating and managing their ongoing compliance risks. It's important to create a culture that embraces change because change is constant—and it isn't limited to regulatory change. We've got to keep up with the industry and be prepared for disruption." —Carol Wambeke, SVP and Chief Compliance Officer, Freddie Mac