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Ben Olson Quoted in American Banker Article, "TRID Scuttling Revival of Private-Label Securitizations"

Benjamin K. Olson

Ben Olson was quoted in Kate Berry's American Banker article, "TRID Scuttling Revival of Private-Label Securitizations,on Tuesday, February 9, 2016. 

Efforts to revive the private secondary market for home loans could stall this year as investors reject loans at unprecedented rates because they do not comply with new regulations.

The rule - a combination of the former Truth-in-Lending and the Real Estate Settlement Procedures acts commonly known as TRID — was meant to help consumers understand the total costs of a home loan. Because there are hundreds of variables to account for on the forms, compliance has become a near-impossible task. As a result, many investors are refusing to purchase loans without further guidance from the Consumer Financial Protection Bureau.

"What's at stake here is that we just went through a financial crisis in the mortgage markets, where secondary market participants, investors and the government would frequently require that loans be repurchased or indemnified for losses based on noncompliance with highly technical regulations or requirements that may have had nothing to do with the default of the loan," said Benjamin K. Olson, a partner at the Washington law firm Buckley Sandler and a former deputy assistant director in the CFPB's office of regulations. "Given that history, the current reluctance to accept even the most technical TRID violations is entirely rational."

"Whether we can get a more robust private secondary market in mortgages will depend a lot on whether the industry can get to a place where it's comfortable with the risk associated with TRID violations," said Olson. "Secondary market participants and their diligence vendors are trying to work through how to deal with the fact that if you are not buying loans with TRID violations, you're not buying many, if any."

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