|Consumer Financial Protection Bureau Proposes Updates to “Know Before You Owe” Mortgage Disclosure Rule (Dated July 29, 2016)
CFPB TRID Proposed Changes August 2016|
The CFPB has issued a proposal to clean up some of the issues lenders are having with TRID. It’s 293 pages long, but there are 4 major issues that are being considered. Read what is in the proposal and how you can submit your opinion! (Consumer Financial Protection Bureau Proposes Updates to “Know Before You Owe” Mortgage Disclosure Rule – Dated July 29, 2016)
|Compliance - Avoiding Pricing Disparity Issues by Documenting the Borrower Decisions
Defending why you priced one borrower with one rate and price and another borrower with another rate is daunting in an ECOA exam. There are some universal problems lenders have in this area, and in this article you will find those solutions.
|CFPB Releases HMDA Small Entity Compliance Guide (Effective 1-1-2018) [Download Chart/Checklist, CFPB Small Entity Compliance Guide]
The CFPB is taking over the filing of HMDA data. With that, there are new rules that go into effect January 1, 2018, with data collection responsibilities beginning January 1, 2017. Brokers, pay attention to this as you will also be required to file. We talked about the new regulation in November’s issue; however, the small entity guide was not released until after publication. Download the 108-page small entity compliance guide. (CFPB Releases HMDA Small Entity Compliance Guide)
|Compliance Best Practices: MSA (Marketing Services Agreements) Update
If you are tuned into the news surrounding MSA, then you likely know that the CFPB is taking a different view of RESPA Section 8 than HUD has in the past. The litigation, fines, and jail time (yes, jail time) are ramping up for originators, title companies, real estate agents and builders. Based on what we are presently seeing from the CFPB, they are not fans of MSA. Read the combined opinions of three of the best legal minds in MSA lender defense have to say about this topic.
|TILA RESPA Integration Disclosure Part Five - Closing Changes
TRID Closing Changes May 2015|
While many are looking at this latest regulation by the CFPB as just another new disclosure, it is far from that. TRID will single-handedly change the way that you do business. This month we are focusing on the most dangerous part of the new workflow, which is likely to cause you the most angst, and that is Closing Disclosure (CD) timing. View handy reference chart and read exactly how to use it to insure compliance.
|TILA RESPA Integration Disclosure – Sequencing Loan Application Triggers – Part 4
Part four of our series discusses sequencing your data collection so as not to trigger a loan application. Many people do not realize the definition of a mortgage application has been constricted, so there are some areas of concern that you may want to review and test prior to the effective date of TRID. This article is the fourth in a seven-part series on RESPA/TILA implementation. (TILA RESPA Integration Disclosure – Sequencing Loan Application Triggers – Part Four )
|TILA RESPA Integration Disclosure - Tolerances – Part 3
The New RESPA/TILA rules go into effect on August 1, 2015. Part of the new rule is the tolerances acceptable on the loan charges; and what you can and cannot do in order to remain compliant. Understanding how these tolerances will be reviewed by you QC staff will help you prevent unwanted file drama! This article is the third in a seven-part series on RESPA/TILA implementation. (TILA RESPA Integration disclosure - tolerances)
|TILA-RESPA Integration Disclosure - How to Read the Regulation – Part Two
You might think that reading the regulation is going to be easy. One of the most important ways to uncover the correct interpretation is to understand how to actually read the implementation guide. The difficulty is that a statement is made with continual reference back to the long numbers and letters meant to cite TILA and RESPA, which are two separate regulations. . Read an example of a typical question and the complicated answer because there would be three separate regulations that interact with each other.
|TILA RESPA Integration Disclosure – Part One – Timeline Examples
The New RESPA/TILA rules go into effect on August 1, 2015. While this may seem like a simple date to remember, there are a lot of “timeline” questions that go along with a rule this large going into effect. Multiple state lenders will find that different dates apply to different states. The document attached to this article makes assumptions to guide you through an example of the timeline associated with the new RESPA/TILA disclosures. This article will be the first of a seven-part series on RESPA/TILA implementation.
|CFPB Issues Final Rule Regarding Amendments to Reg Z Mortgage Rules under TILA (Regulation Z) – October 22, 2014
The information important to lenders is contained in the third amendment, which allows for a cure when a lender inadvertently exceeds the applicable points and fees limitations based on the loan size. The rule allows the industry up to 210 days to deliver the refund, albeit with interest from the time the transaction closed to the date the refund is delivered to the borrower.
|CFPB Finalizes Consumer Privacy Rules (Effective October 20, 2014)
If you are an owner, either as a broker, correspondent or direct to the agencies, you should be complying with Regulation P (Privacy Disclosure) and the Gramm-Leach-Bliley Act. Work with your IT department or web designer to have them add the Privacy Notice to your website. This is the easiest method of solving this issue.
|Fannie Mae Anti-Money-Laundering - SEL-2014-09, (Effective 8-24-14) [Download Charts/Checklists - Anti-Money-Laundering Sample Template for Small Businesses]
Loan Officers are the front line on this. If you gather information during the loan interview stage or during the origination process that indicates a potential that the loan has a reporting requirement under AML and BSA requirements, you should immediately communicate your concern and/or findings with your manager and legal or compliance department.
|Sample Forms for Complying with Adverse Action and Right to Receive Appraisal Notice. [Download Charts/Checklists, Sample Adverse Action & Right to Receive Appraisal Forms ]
You’ll find seven sample forms that were posted by the CFPB in the Charts/Checklist section of the website. This is not something to ignore. You will be obligated to provide these forms as of 1-18-14. If you are a broker only and do not make the credit decisions on the loan yourself, you must check with the lender(s) you broker your business to, to assure that they are sending out the appropriate notices.
|Fair Housing Audits [Download Chart/Checklist, Fair Housing Complaince Checklist - Sample Questions]
CFPB is monitoring MLS and social media sites—when it comes to fair housing! So when it comes time to audit your files to make sure you are not violating FAIR HOUSING rules, can you explain why a certain client did not receive the lowest rate offered to everyone else? You’ll find a Fair Housing Compliance Checklist that you may want to include with every loan application that you take!
|NMLS Uniform State Test Implementation [Effective 4-1-13]
Wow, by passing one test, you are automatically approved to originate loans in 20 states. Six states have adoption dates of July 1 and October 1 – and when those dates come and go, you will automatically be approved to originate in 6 more.
|HUD & Collection of NMLS ID Data in FHA Connection (Effective January 28, 2013)
It’s finally happened. A few years ago, HUD issued a couple of mortgagee letters about collecting unique identifiers for the NMLS system, but at that time HUD and NMLS did not have it together to hook up the two systems. On January 28, 2013, when you order a case number and the ID or TPO does not match, you’ll get a hard stop and it will slow down the processing of your files.
|Five Common Compliance Violations – ECOA-Spouse Signatures; RESPA Tolerance Cures; Insurance-Force Placed; HMDA Reporting Errors.
Compliance is everyone’s job. You are on the front line for many of these topics, including spousal signatures, adverse action notices and RESPA compliance. Do your part to ensure you are following the rules. Your licensing requirements may make many of these topics a part of your training; take advantage of classes that are offered and stay in touch with what is required of you regarding compliance. (Consumer Compliance Outlook of the Federal Reserve Bank)
|FEMA Revises the Standard Flood Hazard Determination Form [Download Chart/Checklist, FEMA Form 086-0-32: Revised Standard Flood Insurance Form]
This form is being updated after many years. Watch for your LOS updates as we approach the end of the 6-month implementation period. There really is not much you need to do here. (FEMA Announcement on Form Revision)
|CFPB Proposes New LO Compensation Rules – Download Proposed Rule & FAQ’s.
We usually don’t write about “proposed” rule changes, but this is one that affects your bottom line—seriously affects it! There are a couple of things in this proposal that are very helpful from a competitive standpoint, so don’t just get caught up in the LO Compensation piece. The fact that the CFPB is proposing a flat fee origination structured comp package indicates that a change is coming definitively in January 2013. This is the time to make your thoughts and feedback heard. http://www.consumerfinance.gov/notice-and-comment (CFPB News Release dated 05-09-2012)
|Anti-Money Laundering Program (AML) and Suspicious Activity Report (SAR) Filing for Non-Bank Residential Mortgage Lenders and Originators Guidance (Effective 8-13-12) [Download Chart/Checklist, 26 Red Flag Rules Checklist]
Surprise, a new compliance requirement! Non-bank mortgage lenders and originators must create internal anti-money laundering programs and suspicious activity reports and file them with the US Treasury’s Financial Crime Enforcement Department. As a loan officer, it will become your obligation as the lead and initial contact with the borrower to be aware of suspicious activity, behavior or documentation. It will be very important to you to become acutely familiar with your company’s program. (Federal Register 31 CFR Parts 1010 and 1029)
|NMLS Mortgage Licensing Report Just Released – Through September 30, 2011
The latest NMLS report has just been published. You’ll find that it contains three separate reports—one for each of the first three quarters of 2011. Read some additional statistics as of December 2011, which have not been “officially” published yet.
|HUD Adds LGBT status to Equal Credit Opportunity Act & Fair Housing Act (Effective 3-5-12)
This rule has been in the works for over a year now! It does not change the old EOCA rules, but adds the terms Gay, lesbian, bisexual and transgender people and families who have LGBT as part of their family. It specifically says that this also applies to the Fair Housing Act and Consumer Credit Protection Act.
|Fed Updates Dollar Value Trigger for TIL & HOEPA Disclosures (Effective 1-1-12)
Just a heads up that HOEPA restricts credit terms such as balloon payments and requires additional disclosures when total points and fees payable by the consumer exceed certain levels. For 2012, the fees must exceed the GREATER of $611 or 8% of the total loan amount. (Federal Register Vol. 76, No. 188 | 12 CFR Part 226 | Reg Z - Truth in Lending)
|Mortgage Acts & Practices (MAP) Rules – FTC & CFPB (Effective 8-19-11) [Download Mortgage Talking Points™ flyer, "How the Mortgage Acts & Practices" Rules Affect Real Estate Agents & Builders]
Mortgage Acts Practices Advertising Rules August 2011|
Wow, this is one humongous, sweeping piece of legislation—because the 19 rules prohibit a lot of stuff that is still going on today! Pay special attention to the “definitions”. I think the feds took out their thesauruses when it came to defining “commercial communications”. Yes, this law even applies to ad agencies, telemarketers, and list generators, realtors, builders, loan mod companies and even servicers…hey I can’t think of anyone it doesn’t include if they offer mortgage products of any kind, including modifications.
|HUD Clarifies GFE/HUD Rules and Makes Additional Technical Corrections – Final Rule
Changes to borrowers forms August 2011|
HUD made some technical corrections which will have some impact to your daily activities. Specifically to Intent to Proceed, Changed Circumstance Clarification, Interest Rate Locks and HUD 1 forms. Make sure you are using the correct forms immediately. (24 CFR 3500 FR-5180-F-07 )
|Anti-Steering Rule - RegZ (Effective April 2, 2011)
The Anti-Steering rule is “clear as mud”— There is great potential for loan applications to become extremely time consuming. Most of us go through these motions without even thinking about it – we offer the customer options…but now we must offer options in a specific manner with no real rules for documenting what we do or proof that we did it correctly. (Reg Z)
|NMLS Issues “Practice” Worksheet for Standard Mortgage Call Reporting. Series of online trainings. [Download Charts/Checklist: Practice Worksheet for Standard Mortgage Call Reports.]
Over the last 60 days or so, NMLS held a series of webinars on how to fill out call reports, who has to fill them out, online completion dates, etc. Expect the recorded version of the How to Fill out a Call Report to appear on their website within the next few weeks. Links to free webinars already on their site provided. (Link to How-To-Series.)
|HUD provides additional RESPA GFE & HUD-1 Guidance – Updated RESPA FAQ’s 4-2-11
Since the new GFE went into effect, there have been a few clarifications –but there were 4 updates in April. That said, these do seem to be getting less complex…or maybe we are all just that much smarter. Download RESPA Rule FAQ updated 4-2-11, changes highlighted in BOLD letters. (April 22, 2011 RESPA Roundup & New RESPA Rule FAQ )
|Interim Rule Clarifies Disclosure Requirements for ARMs (Extended to October 1, 2011)
Federal Reserve made some changes and corrections to the original Interim Rule. Due to the change in direction so near the implementation deadline, compliance is not mandatory until October 1, 2011. Compliant disclosures with the new interim rule should be available in the coming months. (12 CFR Part 226 - Reg Z; Docket No. R-1366 - Truth in Lending)
|New Reg Z Disclosures and Requirements (Effective 1-30-11)
The rules for TIL disclosure aren’t changing – just the form itself is getting a makeover. Instead of a payment schedule on the TIL disclosure, the rule creates a new requirement for an Interest Rate and Payment Summary table. The disclosure will also alert the consumer that there is no guarantee they will be able to refinance the transaction to lower the interest rate and payments.
|Fed Updates Dollar Value Trigger for TIL & HOEPA Disclosures (Effective 1-1-11)
The Fed is required to adjust the dollar amount annually – products are restricted if you exceed the greater of the two thresholds – smaller second mortgages are affected by this rule and may have credit terms restricted if fees exceed $592 for 2011. (Federal Register - Vol. 75, No. 149. 12 CFR Part 226 Reg Z – Truth in Lending)
|FACT Act – Risk-Based Pricing Disclosures- Effective January 1, 2011. [Download Chart - Sample Risk Based Pricing Disclosure Forms]
Model forms are available for review at the end of the Federal Register Text. This is a complex set of rules and I expect standardized forms to be coming out very soon. Charts/Checklists - Sample Risk Based Pricing Disclosure Forms (but expect compliance dept. to provide in December sometime.) (FTC & FRB Section 311 FACT Act 2003 )
|NMLS Credit Authorization Filing Required for MLOs (Effective 11-1-2010)
The big issue here is that you won’t be able to view your own credit report! What the heck? Everyone else in the world, including your borrowers have access to theirs—why not LOs???? We suggest that before you authorize NMLS, that you pull your own TransUnion report, using a “vantage score” and see what shows up. (Nationwide Mortgage Licensing System & Registry (NMLS) Release 2010-.4 – Industry Release Notes – 11-1-10 )
|Updated HUD Settlement Cost Booklet Issued - July 15, 2010 (Link to Updated Version)
While HUD did not give any clues as to what EXACTLY has changed, the word on the street is that they have simply “tweaked” some of the wording in the 48-page booklet. You can use up the supply that you have, and then begin using this new version.
|SAFE Mortgage Licensing Act - [Download Checklist - Who Needs to Be Licensed and HUDs State Model for Implementing SAFE Mortgage Licensing Act]
You may be surprised to see who actually has to be licensed under this Act. I know I was. Also, HUD’s proposed SAFE Act State Model Language is attached. We’ve put together a checklist, Who Needs to Be Licensed, to help you determine who does and doesn’t need to get licensed under the SAFE Act.
|Higher-Priced Mortgage Loans Have Additional Requirements (Effective April 1, 2010) [Link to Rate Spread Calculation for HPML included]
The borrowers for these types of Portfolio lenders are typically considered “A credit” and just may not conform to Fannie or Freddie standards in some fashion – it could be the source of income, the collateral, or any other minor deviation. For loans falling into this category, Federal Law now requires escrows. (Reg Z)
|Model Privacy Notice Form = New Requirements (Effective 12-31-09) [Download Sample Privacy Disclosure Forms]
While the new Privacy Notice went into effect in December 2009, the actual model for it was not published until a few months ago. If you work for a company that is affiliated with other companies—or if you are a broker who shares info with financial planners and insurance agents, then you’ll need to disclose too. Download Sample Privacy Disclosure Forms. (Gramm-Leach-Bliley Privacy Act – Dec 1, 2009)
|Pass or Fail - What Every Mortgage Broker Should Know About SAFE Act Training
What’s bringing fear and trembling to the hearts of MLOs nationwide is the SAFE Mortgage Loan Originator Test. Some requirements (such as no felony conviction and no license revocation) are straightforward: either you can comply, or you can’t. Get the training you need – 2-Day Pre-testing Class Schedule, click here.
|MDIA & GFE - Are Your Agents Confused? [Includes Mortgage Talking PointsTM flyer, How to Adapt to the New Disclosure Rules]
How to Adapt to New Disclosure Rules February 2010|
The Mortgage Talking PointsTM flyer, “How to Adapt to the New Disclosure Rules” is NOT about the gory “details” of MDIA, the GFE or the HUD1. It gives real estate agents tips on how to work with buyers, sellers, title companies and how to insure smoother closings. Hold sales meetings. Email. Give to your title rep. Links to related articles included.
|New HUD Settlement Cost Booklet – Shopping For Your Home Loan (Effective Jan 1, 2010)
This booklet protects you, the loan originator and mortgage company manager! Pretty much everything clients need to know is covered—however there are some glaring omissions. Some “experts” say that the booklet is required to be given ONLY to someone who is purchasing a home. We disagree. In the Mortgage Disclosure Improvement Act, it specifically lists the transactions that require disclosures and we believe that they renamed the booklet “Shopping for Your Home Loan…” for a reason!
|Federal Reserve Issues FAQ for Short-Term Balloon Loans and Reg Z HPML Repayment Ability Requirements (Effective Oct 1, 2009)
I realize this may not be a hot product at this point in time, but 5 yr Balloon loans have been popular in the past and likely will be again. This interpretation really complicates things for your standard LTV loans – 75-90% LTVs. Keep this info in the back of your head – it will come up in the future. (CA 09-12)
|HUD RESPA FAQs - Confusion about "Changed Circumstances" and When to Issue a New Good Faith Estimate
Brass Tax – HUD wants you to be clear about costs and does not want you changing costs without documented reasons that HUD considers allowable. But, just ask any head of operations – they have been sitting in webinars with attorneys to learn about the implementation of all the changes coming in January, and coming out the other side thoroughly confused with no real consensus being reached. (24 CFR Parts 203 and 3500 [Docket No. FR–5180–F–03] RIN 2502–AI61 Real Estate Settlement Procedures Act (RESPA): Rule To Simplify and Improve the Process of Obtaining Mortgages and Reduce Consumer Settlement Costs)
|ESIGN Act as it Pertains to the Mortgage Disclosure Improvement Act - (Includes Email Permission Form.)
Lots of references in MDIA to the ESIGN Act. Basically it says that you must insure that the consumer has Internet Access AND that you also must confirm that your clients have the proper software to open the document you are going to send to them. For brokers who must rely on their lenders to send out the disclosures, we suggest that you fax the Email Permission Form and ask (the lender) that the disclosures be emailed to your clients.
|Working Thru the MDIA Maze - [Includes Two Versions of a Mortgage Talking PointsTM Flyer, (Formal Version - Why Indecision Equals Delays) and (Informal Version - Get Your Poop in a Group)]
We are cross-eyed by reading and re-reading the MDIA Act outlined in the Federal Register about a gazillion times! Yes, there is one thing we are updating that WE GOT WRONG, but we have also read memos from some of the major lenders--and we believe that they MISINTERPRETED some of the rules to make them more restrictive than they really are. ESIGN Act is part of this, if you deliver your documents by email you’ll need to know those rules too.
|Mortgage Disclosure Improvement Act – What You Need to Know! (Includes MDIA Flow Chart and Example Delivery/Mailing Date Chart Example) (Effective July 30, 2009)
Your world is being turned upside down with this one—especially if you are a broker! MDIA was created for 3 reasons – uniformity, disclosure, and comparison shopping! Major changes in GFE and HUD 1 and HUD 1A. Oh, more waiting periods kick in. MDIA should be renamed to “How Long Can We Delay the Closing Act”! (Includes MDIA Flow Chart and Example Delivery/Mailing Date Chart Example) (Federal Register Vol. 74, No 95, May 19, 2009)
|Reg Z, New “High-Priced” category, HOEPA / Section 32 Expanded – This WILL affect YOUR loans! (Part 2) (Includes Reg Z High Priced Mortgage Determination Checklist) (Effective 10-1-2009)
The Feds are really going to town with a bunch of Reg Z, TILA revisions in an effort to reign in those nasty, unscrupulous lenders. (You know, the ones who are no longer in the business.) There is a new category called “high-priced” mortgages that can affect both conforming and government loans. Your pipeline is at stake. (Includes Reg Z High Priced Mortgage Determination Checklist) (Regulation Z; Docket No R-1305, 12 CFR, Part 226 Federal Register Notice Vol. 73, No. 147 / Wednesday, July 30, 2008 Truth in Lending; Final Rule) )
|New Truth in Lending (RegZ) Laws - What's Old. What's New. What's Prohibited (Part 1). (Includes 2 Downloads - 1) LO Reference Chart 2) Mortgage Talking PointsTM flyer, Advertising Rules (Reg Z) for Real Estate Agents & Builders) (Effective 10-1-2009)
Updated TIL rules apply to all forms of advertising, including e-mail blasts; flyers that you pass out to apartment buildings; newsletters to your customers; direct mail; etc. If you are working with a builder, real estate agent, who advertises any loan information (e.g., 100% financing)--it’s a great reason to connect and/or set up some joint advertising! Includes Reference Chart and Mortgage Talking PointsTM flyer entitled “Advertising Rules (Reg Z) for Real Estate Agents & Builders”. (Regulation Z; Docket No R-1305, 12 CFR, Part 226 Federal Register Notice Vol. 73, No. 147 / Wednesday, July 30, 2008 Truth in Lending - Final Rule)
|S.A.F.E. Act - What You Need to Know About the National Licensing Laws (Effective August 1, 2009)
Are you prepared to be fingerprinted and submit your FBI background check? The National Licensing Law for Loan Originators is just around the corner! It applies to loan officers who are brokers, bankers and yes, even LO’s who work for a bank or credit union!
|Tax Transcript 4506-T Warning - The Logistical Nightmare for Self-Employed Borrowers
Are you having trouble getting tax transcripts for your self-employed clients? Some are taking 6-8 weeks! Know your investor policies on tax transcripts. No one wants to come back to a borrower after the fact with bad news or be forced into taking a huge loss on a lock expiration.
|New Transfer of Servicing Disclosure Statement, January 16, 2009. (Download Sample Disclosure)
The new Transfer of Servicing Disclosure is soooo much easier to understand and explain. Download and print the sample disclosure.
|Commenting on All the Mis-Information about Truth and Lending Changes
Honest, there is no immediate impact, and I wasn’t going to even write about it yet. But it turns out that there are so many rumors and scare stories circulating about complicated disclosure changes, and being out of compliance – I just had to respond. There’s so much misinformation! (If you want to hear more about the “mis-information” that’s spreading, go to my new blog, www.MortgageTalkingPoints.com.) (HR3221, Housing and Economic Recovery Act; Section 2502, Enhanced Mortgage Loan Disclosures)