Remember sweating through months of study preparing for the SAT (or some other important challenge) so you could gain admission to your college of choice? The long hours, late nights, and missed outings with friends and family made for a difficult time. But when exam day finally arrived, you felt confident and well-prepared, certain that your hard work would pay off. You were ready to take the exam, and happy to finally put it behind you.
But what if the SAT exam is suddenly canceled, and now you must wait another 60 days before taking the test? Are you relieved? Disgruntled? Or simply nonplussed?
The industry’s range of reactions to the TRID deadline extension has probably been along similar lines. Many companies were clearly relieved to have more time for testing or other activities to strengthen their TRID readiness. And maybe some lenders were disgruntled, since in the rush to meet the earlier deadline, they ran out of time for the due diligence that could have saved them
some money.
But for others – particularly large institutions and enterprise-capable solutions partners – the TRID deadline delay was almost a non-event. Here’s why.
COMPLEXITY TAKES TIME
Large financial institutions are massive operations with very complex IT environments. This means that comprehensive planning and strict exception management protocols must be followed before any technology change can be implemented. In the case of new technology releases, these organizations work from technology lifecycle maps that plot out the timing of each and every release, sometimes a year or more in advance.
So, given the realities of an enterprise level IT environment, the two-month extension of the TRID deadline did not offer large institutions enough time to do much of anything from a technology perspective. Indeed, code that has already been written and released into production – but that now cannot be utilized until October, has created its own set of challenges for large financial institutions.
But on the upside, the TRID deadline delay has perhaps offered large institutions some time to conduct additional UAT (user acceptance testing) drills of a more successful launch, or begin planning for the next round of post-TRID functionality updates. But certainly nothing significant could be started, much less completed, during the 60-day extension timeframe.
The same is true for the enterprise class technology and services partners that work with financial institutions of all sizes. These firms, including those that enable collaboration and connectivity with a large pool of mortgage loan service providers, have been working closely with their clients for nearly two years to understand how TRID will impact their operations. By this point, partners should fully understand how best to adapt to and help facilitate their client’s TRID- related requirements, and be an enthusiastic participant in UAT initiatives. But there is little time left to undertake any significant initiatives ahead of the October launch.
THE READY — OR NEAR READY
In addition to large institutions that have been preparing for several years, many small to mid-sized financial institutions have also worked very diligently to be ready for TRID. While faced with less complexity associated with their IT infrastructures and perhaps enjoying greater flexibility in the way they approach compliance readiness, these firms are nonetheless faced with significant changes to their operations as well.
For those organizations that were ready (or near ready) for the original TRID deadline of August 3, the extra two months of time has afforded them more UAT for a successful launch, and perhaps the ability to finish up a few “nice-to-haves” they have been working on. It also remains an opportunity to double check operational readiness, stress-test process and procedure changes and updates, and make sure they are comfortable with the partners they have decided to work with through the TRID transition and beyond.
ENSURING SAFETY NETS ARE IN PLACE
Most lenders have solid contingency plans in place to navigate through an internal failure should it occur. However, while it is likely that these plans are well-established and well-rehearsed, institutions should also be very clear about how their technology and service partners can support them should they need back-up due to an operational failure. Safety nets like these can help lenders mitigate what could otherwise become very big (and very expensive) problems in very short order.
At the same time, lenders should also make sure they understand the contingency plans that their technology and service partners have in place for their own companies. How will the lender be notified if an issue arises? How will the partner ensure the lender client is protected? And what if a technology or services partner experiences a failure that cannot be immediately resolved? Lenders may wish to pre-identify a potential partner company that represents the best fit option should a replacement provider be needed.
In the remaining few weeks before the new TRID deadline arrives, financial institutions of every size would do well to make sure they are protected by strong safety nets like these, especially in the key areas that could most impact customer experience. Among these, the ability to make timely mortgage decisions and the ease by which the mortgage loan makes it to the closing table (or the electronic closing portal) are very important. They are also greatly dependent upon the lender’s technology functionality and the strength of its connectivity to mortgage services providers to ensure accurate and timely closing estimate information.
THE FINAL (?) COUNTDOWN
While larger financial institutions have worked from comprehensive TRID readiness plans and have likely dotted every “i” and crossed every “t” many times by now, they have also been working with their selected external partners to ensure that their level of TRID readiness matches their own. They know where failures could occur, both internally and externally, and have put robust safety nets in place to minimize potential problems. Similarly, though small to mid-sized lenders and their selected external partners may not have had the planning scope and scale of their larger counterparts, the same level of preparedness is just as important for them. A CFPB audit can certainly happen to large, medium and small lenders alike.
As the industry counts down the final weeks and days until TRID goes into effect, any loose ends should be wrapped up, uncertainties resolved and contingency plans finalized and approved. With a solid infrastructure and strong partnerships in place, institutions at every level can perform well within the constructs of the new TRID requirements.
But should there be another TRID deadline delay … well, we can talk about that if the time comes. My prediction is we are live on Oct. 3!
