In December, the CFPB responded to a letter from the Mortgage Bankers Association regarding “lingering misperceptions and technical ambiguities” in TRID regulations. The CFPB’s letter states that, given inevitable yet unintentional errors in the early stages of the mortgage industry’s implementation of the regulations, regulators’ initial examinations will focus on industry members’ good faith efforts to ensure compliance with the rule. The CFPB further emphasized that examinations will be “corrective and diagnostic, rather than punitive.”

The letter does not provide for any type of safe harbor or protection from liability during the TRID rule implementation period, it does provide some helpful guidance on TRID rule liability.

Regarding cure provisions for violations of the rule, the letter states that TRID allows for corrections of specific post-closing errors, such as correcting non-numerical clerical errors and curing violations of monetary tolerance limits, if they exist. Moreover, TILA provisions regarding the corrections of errors will continue to apply to integrated disclosures: “TILA has long permitted creditors to cure violations, provided the creditor notifies the borrower of the error and makes appropriate adjustments to the account before the creditor receives notice of the violation from the borrower. 15 U.S.C. 1640(b).”

The CFPB’s letter further advises the MBA that while TRID integrates disclosure requirements under RESPA and TILA, it does not “change the prior, fundamental principles of liability under either TILA or RESPA” and as a result, for high cost mortgage loans:

• There is no general TILA assignee liability unless the violation is apparent of the face of the disclosure documents and the assignment is voluntary.
• TILA limits statutory damages for mortgage disclosures, in both individual and class actions, to failures to provide a closed-set of disclosures.
• Formatting errors and the like are unlikely to give rise to private liability unless the formatting interferes with the clear and conspicuous disclosure of one of the TILA disclosures listed as giving rise to statutory and class action damages.
• The disclosures listed in TILA section 130(a) (15 U.S.C. § 1640(a)) that give rise to statutory and class action damages do not include either RESPA disclosures or the new Dodd-Frank Act disclosures, including the Total Cash to Close and Total Interest Percentage.

The letter confirms that the CFPB and other regulators will initially focus on good faith efforts to come into compliance with the TRID rule.