Housing Finance: TRID

Determining compliance with CFPB’s “Know Before You Owe” rules helps maintain secondary market liquidity. SFA’s TRID Grid leads the way.


“After the October 2015 effective date of TRID, the secondary market initially was left to focus on defining the liability surrounding new disclosure obligations that was not abundantly clear. Since June of 2016, the rating agencies, TPR firms, and the capital market investors have confidently followed the Structured Finance Association’s TRID Compliance Review Scope effectively placing the private label securitization marketplace back on a strong footing.” – Scott McNulla, AMC and John Levonick, Pepper Hamilton

The Structured Finance Association originally published its TRID Compliance Review Scope© documentation in 2016 to facilitate uniform testing standards resulting from a consistent interpretation of Truth-In-Lending Act liability. This interpretation was drafted by subject matter experts at SFIG member firms, according to our understanding of prevailing legal precedent and informal written guidance and webinars offered by the CFPB as it applies to the Know Before You Owe / Truth In Lending Act  (TILA)– Real Estate Settlement Procedures Act Integrated Disclosure (RESPA) or TRID Rule (78 FR 79730, as amended) across third-party review (TPR) firms.

Since then, the CFPB published additional clarifications to Regulation Z in 2017. Additionally, in 2018, the CFPB published an amendment to the earlier TRID Rule, which provided clarifications around the so-called “black hole” timing requirements of the Loan Estimate and the Closing Disclosure. Finally, it also includes a limited number of updates related to regulatory changes resulting from the passage of S. 2155 in 2018.

The underlying premise of this documentation remains the same: to establish a best practices approach to pre-securitization testing logic that will drive the due diligence conducted by TPRs. However, the conclusions set forth in the document do not necessarily reflect how courts and regulators, including the CFPB, may view liability for TILA violations, presently or in the future. The Structured Finance Association and its membership continue to work with the CFPB toward the goal of providing formal guidance for the benefit of the consumer, primary, and secondary mortgage markets.

The TRID Compliance Review Scope is available at no cost to individuals of Structured Finance Association member firms, or for purchase by non-members. The TRID Compliance Review Scope will continue to be reviewed and updated by the Association and is subject to the same protocols as other Association work streams and work product.

Click here to see sample of the Structured Finance Association’s TRID Compliance Review Scope. In order to receive a free copy of the most recent TRID Grid, please email [email protected].


Dallin Merrill

Senior Vice President, MBS Policy