|Fair Housing Audits [Download Chart/Checklist, Fair Housing Complaince Checklist - Sample Questions] April 2013|
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] April 2013|
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) December 2012|
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.
|Consumer Finance Protection Bureau & FTC Warn Against False Mortgage Advertisements [Video Training Course, RegZ Truth-in-Lending Advertising Rules] AND [Download Mortgage Talking Points™ flyer, How the Mortgage Acts & Practices Rules Affect Real Estate Agents] Deceptive Ad Crackdown December 2012|
The CFPB review was focused on deceptive advertisements that target veterans or older Americans, because of their potential for abuse. Be prepared – the reviews will become more far reaching. This warning also affects real estate agents. That’s why we’ve given you links to a Mortgage Talking Points™ article and video training class for your review and to share with your agents.
|Five Common Compliance Violations – ECOA-Spouse Signatures; RESPA Tolerance Cures; Insurance-Force Placed; HMDA Reporting Errors. July 2012|
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] July 2012|
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. June 2012|
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] June 2012|
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)
|Consumer Financial Protection Bureau Updates Ruling on Loan Officer Compensation and Profit Sharing Plans; CFPB 2012-02 April 2012|
This one is for company owners and branch managers: If you have been wondering whether you can use a profit pool that is generated from proceeds created from loan origination activity, then this is for you. I am not sure where else you would get the funds from, since your principal activity is loan origination and that is how you generate revenue for your existence.
(CFPB Bulletin 2012-02)
|NMLS Mortgage Licensing Report Just Released – Through September 30, 2011 March 2012|
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) February 2012|
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.
|CFPB – Changes to Settlement Costs Booklet January 2012|
No biggie here: Just a ”clerical” thing (a name change) since CFPB has taken over HUD’s “notice and complaint departments” since they are now in charge.
|Consumer Finance Protection Bureau Takes Over ECOA/HMDA Oversight and Enforcement January 2012|
The rules are not changing – just the guard. That said, the CFPB has as part of its primary mission to ensure consumers have discrimination-free access to credit and fair lending practices. Recently, Bank of America settled a complaint against Countrywide for alleged discrimination against African-American and Hispanic borrowers who applied for home loans. Bank of America agreed to pay $335 million to resolve the claims – according to the U.S. Justice Department, this is the largest settlement over residential fair lending practices in history.
(CFPB BLOG 12/16/2011)
|Fed Updates Dollar Value Trigger for TIL & HOEPA Disclosures (Effective 1-1-12) November 2011|
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
|Anti-Steering Rule - RegZ (Effective April 2, 2011) June 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.
|NMLS Issues “Practice” Worksheet for Standard Mortgage Call Reporting. Series of online trainings. [Download Charts/Checklist: Practice Worksheet for Standard Mortgage Call Reports.] May 2011|
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 May 2011|
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) January 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) December 2010|
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) November 2010|
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) November 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) August 2010|
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] June 2010|
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] April 2010|
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.
|Model Privacy Notice Form = New Requirements (Effective 12-31-09) [Download Sample Privacy Disclosure Forms] April 2010|
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 March 2010|
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) January 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) December 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.
|HUD RESPA FAQs - Confusion about "Changed Circumstances" and When to Issue a New Good Faith Estimate October 2009|
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]
Real Estate Settlement Procedures Act (RESPA): Rule To Simplify and Improve the Process of Obtaining Mortgages and Reduce Consumer
|ESIGN Act as it Pertains to the Mortgage Disclosure Improvement Act - (Includes Email Permission Form.) August 2009|
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)] August 2009|
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) July 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) July 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) June 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) April 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 March 2009|
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) January 2009|
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 September 2008|
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)