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

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

“With this particular change, we are vendor-dependent to ensure our data processing system pulls all the right information into the correct fields on the forms,” Wood testified. “When we ran into an unanticipated 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 exposing us to errors.”

Mark Wilburn, chief lending officer for the $719 million, 71,000-member Truity Federal Credit Union, estimated the Bartlesville, Okla.-based cooperative would spend an additional $50 to $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 spent hundreds of hours researching vendor options, reviewing requirements and testing the new systems as well as training loan officers and loan processors.

According to the cooperative's 5300 report, Truity originated 775 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, they would have cost an extra $45,000 to $54,000.

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

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

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

Additionally, CFPB Director Richard Cordray signaled recently that the agency could take a hard line on software vendors that failed to help client financial institutions comply with the rules.

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

“Quite frankly, I have been disturbed by reports I have been hearing about the vendors on whom so many of you rely,” Cordray wrote in the prepared remarks. “Some vendors performed poorly in getting their work done in a timely manner, and they unfairly put many of you on the spot with changes at the last minute or even past the due date. It may well be that all of the financial regulators, including the Consumer Bureau, need to devote greater attention to the unsatisfactory performance of these vendors and how they are affecting the financial marketplace.”

Read more about how credit unions have adapted to the new mortgage rules in the Nov. 4, 2015 issue of Credit Union Times.

Instant Insights /

Credit Union Processes TRID Loans Manually

Related Stories

Recommended For You