While vendors struggle to match software packages to loanorigination systems to comply with new TILA/RESPA regulations, onecredit union said it recently processed mortgages by hand.

Carrie Wood, CEO of the 9,800-member, $59 million TimberlandFederal Credit Union told a Senate Banking subcommittee Wednesday her staffrecovered an old typewriter from a closet to work on the formsmanually until its vendor's bugs could be worked out.

“With this particular change, we are vendor-dependent to ensureour data processing system pulls all the right information into thecorrect fields on the forms,” Wood testified. “When we ran into anunanticipated problem after we flipped the switch to the new form,we were forced to manually input information into the new forms,slowing down the process for our members and potentially exposingus to errors.”

Mark Wilburn, chief lending officer for the $719 million,71,000-member Truity Federal Credit Union, estimated theBartlesville, Okla.-based cooperative would spend an additional $50to $60 per loan on hard costs for the additional TRID procedures,which went into effect Oct. 3.

He also recounted how the credit union had already spenthundreds of hours researching vendor options, reviewingrequirements and testing the new systems as well as training loanofficers and loan processors.

According to the cooperative's 5300 report, Truity originated775 mortgage loans in 2014 for roughly $137 million. As of Sept.30, the credit union originated 896 loans for $171 million.

If Truity had originated those loans under the new rules, theywould have cost an extra $45,000 to $54,000.

Wilburn said Truity had been working with a vendor to improvehow its software worked with the cooperative's loan originationsystem so it would produce the necessary documents, but the vendorhad not yet worked out the bugs.

He also reported he had been to a meeting withother credit union mortgage originators in his area and they hadreported similar problems.

“I don't know of anyone who has actually closed a TRIDloan yet,” Wilburn said, adding that he had also heard creditunions in other states had not had as many problems.

Additionally, CFPB Director Richard Cordray signaled recentlythat the agency could take a hard line on software vendors thatfailed to help client financial institutions comply with therules.

In prepared remarks at the Oct. 19 Mortgage Bankers Association annual conference, Cordraysuggested the CFPB and other financial regulators may need to actagainst some financial software companies.

“Quite frankly, I have been disturbed by reports I have beenhearing about the vendors on whom so many of you rely,” Cordraywrote in the prepared remarks. “Some vendors performed poorly ingetting their work done in a timely manner, and they unfairly putmany of you on the spot with changes at the last minute or evenpast the due date. It may well be that all of the financialregulators, including the Consumer Bureau, need to devote greaterattention to the unsatisfactory performance of these vendors andhow they are affecting the financial marketplace.”

Read more about how credit unions have adapted to the newmortgage rules in the Nov. 4, 2015 issue of Credit UnionTimes.