A recent survey by ACES Risk Management (ARMCO) found that TRID-related issues still account for a large percentage of mortgage defects. According to ARMCO, more than 68% of defects reported last year involved TRID-related issues or loan-package documentation issues.
The critical defect rate was down slightly, from 1.27% in the third quarter of 2016 to 1.5% in the fourth quarter. However, a shift to a more purchase-driven market brings its own risks, according to Phil McCall, ARMCO chief operating officer.
“The data suggests lenders are getting more adept at complying with TRID-related issues,” McCall said. “However, new areas of concern are beginning to spring up and an early correlation can be linked to a more purchase-focused market. Lenders need to learn from their own defects if they want to protect themselves against compliance-related issues, but they also need to stay apprised of changing trends if they want to mitigate the increased risk of fraudulent activity that is inherent with a purchase-driven market.”
ARMCO gathered the data by selecting more than 75,000 loans for random full-file review.
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