This is the first article in our Industry Insider Series with Richard Horn, a former CFPB attorney who led the final TRID rule. To see the next installment in this series, click here. To receive alerts about important changes in the industry, click here or submit the form below.

The second half of 2018 is a couple months away, and already this year has seen a lot of meaningful change for the real estate industry.  In the Qualia Industry Insider series, we’ll describe these important changes for you in plain English, so you and your team have all the information you need to be successful in the months ahead.  

Additionally, in a few weeks, we’ll host an exclusive Q&A webinar that will walk through these issues and provide an opportunity for you and your team to ask specific questions that are on your mind.  

This post provides you an overview of the topics that we’ll be covering in more detail in the next few weeks.  

PHH Corp. v. CFPB

The year started off well for the industry.  On January 31st, the U.S. Court of Appeals for the D.C. Circuit issued its long-awaited decision in PHH Corp. v. CFPB.  The court decided that the CFPB’s structure is constitutional. That means the agency can continue with a single director who can only be removed for cause by the President.

While the constitutional issue is important to the CFPB’s authority in general, PHH’s most immediate impact will be on real estate professionals who are trying to determine how to engage in relationships with others in the industry.  The case interprets how companies can steer clear of RESPA’s section 8 prohibition against referral fees.

In fact, the PHH decision may have opened the door to a renewed interest in marketing services agreements (MSAs), desk rentals, and other arrangements designed to fall under an exemption from RESPA’s section 8 prohibition for payments for actual services provided.

Caution is warranted though, because the industry still needs to be concerned about compliance when entering and administering these arrangements. In the coming posts on this issue, we will discuss why and how to best enter and administer these types of arrangements.

TRID 2.0

The industry has been working on the implementation of TRID 2.0, which becomes mandatory on October 1, 2018.  Implementation is now in full swing.

TRID 2.0 was the CFPB’s major amendment to TRID that was intended to provide “additional clarity” to the industry.  There were some good changes in the rule, such as the expansion of the rule to cover loans secured by cooperative units and the addition of a new accuracy tolerance for the Total of Payments calculation.  But there were many complex and technical changes in the rule that will need to be carefully implemented, as well as changes that may have added more confusion than clarity. Some of these changes are important for the title industry to know about.  For example, the CFPB provided guidance in TRID 2.0 regarding the level of itemization that is required on the Loan Estimate and written list of service providers for third party charges, including title fees.

Like it or not, everyone in the industry will certainly need to do their homework to make sure they’re ready for October 1st.

To receive alerts about important changes in the industry, click here or submit the form below.

The TRID Black Hole Final Rule

In more recent good news for the industry, the CFPB issued a final rule on April 26 that eliminated one of the most vexing problems under TRID: the “Black Hole.”  

Specifically, the final rule amends TRID to allow lenders to disclose and impose increased costs (sometimes referred to as “resetting the tolerances”) on any Closing Disclosure (including the initial and corrected CDs), without regard to how many business days before closing the change occurred.  

The current rule places a time limitation on a lender’s ability to use the CD to reset the tolerances, which sometimes results in lenders having to absorb otherwise legitimate cost increases.  This represents a solid victory for the industry, thanks to the efforts of the major trade associations and a number of individual institutions.

But take note that, in the preamble to this final rule, the CFPB cautioned industry about the accuracy standard that applies to the CD, which requires lenders to try and obtain estimates for all of the information required on the CD.  This could become an exam issue in the coming year, and it would be prudent for the industry to review their policies and procedures to ensure compliance with this standard.


As you can see, there are some important changes going on in the industry this year.  I look forward to discussing these changes with you in more detail in the upcoming posts and webinar in this series.

Sign up below to stay up-to-date on all posts with Richard Horn in our Industry Insider Series. Learn more about PHH, TRID 2.0, and join us for our upcoming webinar + Q&A with Richard himself.