CAMPs REAL TIME LEGISLATIVE INFORMATION UNDER THE DOME

Wednesday, October 1, 2014

It has been a whirlwind quarter. I can’t believe I just finished the first quarter of my term of Presidency. It seems like only yesterday that I started writing these weekly newsletters. I want you to know that I truly appreciate hearing from you. Please make sure to email me with any comments, concerns or questions that you may have. Keep your calendars open for the beginning of the year. I hope to meet you at the Sales and Marketing Conference. Wait until you see the speakers we are lining up for you!
It’s been a week of changes for me personal and in case you didn’t realize it, today is the day. As you know, next August the Good Faith Estimate and Truth in Lending disclosures will be integrated into one disclosure. Do you need to find out more information, the Federal Reserve is hosting the 3rd in a series of three webinars TODAY, Wednesday, October 1 at 11 AM PST.  This is a free class. In this session, we’ll address the loan estimate form with a focus on questions raised by technology vendors. The new TILA-RESPA Integrated Disclosure rule will go into effect on August 1, 2015. Are you ready? Don’t forget to register for the webinar: Click Here

Did you know that FNMA has announced the discontinuance of the HomePath and HomePath Renovation products? Do you have clients searching for a FNMA owned property and would like to use the current enhancements such as no MI and no appraisal? Well, they must have the contract of sale executed on or before October 6, 2014 in order to use the existing features, although the loan will need to close sometime in January/February 2015 (final date to be determined).
The HomePath Program also allows for 10% down investment property with NO PMI. This will also go away leaving only the minimum 20% down for investment property that is available with current guidelines.

After October 6th, FNMA owned properties must use other financing options.   If a renovation product is requested, it must follow either the HomeStyle or 203K program guidelines.  The HomeStyle renovation program is not impacted by this change.

All is still quiet on the federal legal front but keep watch for an email from me or from NAMB. In the last meeting with the CFPB, NAMB was informed that the CFPB would need specific questions answered in order to assist the mortgage industry and assist in changes needed in the implementation of the Dodd-Frank Wall Street Reform Act. We will be sending out a call to action within the next couple of weeks to help answer the questions.
However, on the state side, AB 1700 is still sitting on the Governor’s desk for signature. If signed, this bill would require a seven day cooling off period for the senior once they receive their reverse mortgage counseling certificate. Additionally, it will also require a final signature plus a new worksheet to be used for each client. The original version of the bill would have required a statement that Reverse Mortgages may not be a proper financing option in all cases but that verbiage was removed. We anticipate this bill being signed by the Governor soon.
Support needed for one of our own:

Past CAMB President, Ted Grose is running for State Assembly. He has worked for over 32 years in the real estate industry, specializing in finance. Ted has personally founded, co-founded or led four real estate finance companies. He has been and remains intimately involved with sustainable homeownership through consumer advocacy. He is a CAMP member as well as past board member for NAMB. In a time of change, we need to have one of our own helping us fight for consumer advocacy. He has worked hard for us and now he needs our help. You can help him by donating to his campaign: Click Here

Upcoming Chapter Events:

Today!

Orange County CAMP presents Social Media Boot Camp Mixer with Katie Wagner, October 1, 2014 from 4pm to 8pm at Il Fornaio Restaurant, Irvine CA

Orange County Presents The 2nd Annual Golf Tournament October 6, 2014 at Tijeras Creek Golf Course 29082 Tijeras Creek, Rancho Santa Margarita, CA. Contact Melanie McAllister 949-468-2614 or Melanie.mcallister@occamp.org

Silicon Valley CAMP presents Think Outside the Box: Non QM Loans? Friday, October 10, 2014 at Three Flames Restaurant, Banquet Room, 1547 Meridian Avenue, San Jose, CA. Registration is not required.
East Bay CAMP presents Perfect your Presentation Skills with Kitty Cole, Wednesday October 15, 2014 from 4pm to 6:30 pm at Arch Mortgage Insurance Company, 3003 Oak Road, First Floor Training Room, Walnut Creek, CA . Don’t forget to bring your referral partners! For more information, contact Bob Schwab at bschwab@rpm-mtg.com or 925-330-6588

Do you need your to take your Continuing Education? Check out these chapters who are offering the live classes:
East Bay Chapter on Monday, October 6 ,2014 at Training Room of Arch Mortgage, 3003 Oak Road (near Treat & 680), Walnut Creek, CA. CAMP Members, contact – Audrey Boissonou, East Bay CAMP President, 925-788-1351 for your discount code and for more information.

Inland Empire Chapter on Thursday, October 9, 2014 at PRMG Training Room, 1265 Corona Point Court, Corona CA.  Lunch is provided. Must register by 10/6/14. Register and pay at www.ieCAMB.com

San Francisco Peninsula Chapter on Thursday, October 16 at Opera Plaza, 601 Van Ness Avenue, Training Room, San Francisco, CA. Contact Donna Aldrich at donna@donnaaldrich.com for more details.

San Gabriel Valley Chapter on Wednesday, October 22, 2014. Contact Jesse Hernandez at JHernandez@ires.com for more details.

Keep in mind, registration for these classes begin at 8 and the class will start promptly at 8:30am. If you are late, you may not be able to take the class.

CAMP Statewide Calendar

If you would like me to include upcoming events please send me an email.

Until next week,

Michelle Velez, President

California Association of Mortgage Professionals

shellvelez@gmail.com  I  thecampsite.org

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Monday, September 29

And I thought that I was going to start taking it a little bit easy and here I had last week marked in my schedule for this week. I found myself on an airplane on Tuesday going to one of my favorite cities, Seattle, Washington to attend the WAMP conference. What a great crowd. If you were at this conference and didn’t attend the breakouts, you missed a lot. Frank Percival and Lisa Goldsmith did a fantastic job of getting exhibitors and speakers to make this event very interesting.
I got to meet a lot of great people in Washington and they really care about what is going on in the industry. We talked about the average age of an originator, 54 according to the NMLS, and I could not wait to ask the question about how long people had been in the business. There were about 175 people in the room and I asked the dreaded question, “how many of you originators have been around less than 3 years?” One person raised their hand. This just goes to tell you that we need to find a way to get more young people involved. NAMB has a task force working on this subject as it is very important that we continue to get the younger generation involved.

I ran into a lot of people who were just at NAMB National and they gave me some great ideas that I will pass on to Nathan Pierce, chair of the committee for next year. I also had a very long discussion with my friend, Brian Stevens from the National Real Estate Post and we will talk about them coming to NAMB National next year. Just a note: I think these guys do a great job of getting some of the information that is out there to you on a daily basis. I know that I watch them every morning to get started on my journey each and every day. Visit TheNationalRealEstatePost.com to sign up to receive their daily show.
I sent a national press release last week on the Lending Integrity Seal of Approval. We are trying to get every NAMB and their team to have this. With the increased promotion and aggressiveness of the Membership Chair, Kay Cleland and I mentioning it every time we can, we are going to make this the designation to have in 2014-2015. If you don’t have it, you are a NAMB Member, and you are an originator, go to the membership section of NAMB.org and sign up today. It is free and soon everyone that is looking for a mortgage loan, will want those that have it.
I will be in my office for the next 4 weeks trying to originate some loans and getting them closed. But I will keep you up to date on what is going on at NAMB.
And just so you know, you can contact me at namb.ceo@namb.org.

Until next week!!!

Donald J. Frommeyer, CRMS, CEO
NAMB—The Association of Mortgage Professionals
namb.ceo@namb.org www.joinnamb.com

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Wednesday, September 24, 2014

This week, we celebrated the first day of autumn. This is probably my favorite time of year. I love the change in weather; the beautiful colors of the autumn leaves and most of all…pumpkin anything…well almost. I came across pumpkin pie Pop-Tarts and the only person willing to try them was my friend’s 10-year-old son. Autumn is a time for changes and perhaps there may be some changes on the horizon for myself as well. Next week we will begin the last quarter of the year. I just can’t help but think how fast this year is going.

Speaking of changes, there is change coming next year with the integration of the Good Faith Estimate and Truth in Lending disclosures. If want to find out more information the Federal Reserve is hosting the 3rd in a series of three webinars on Wednesday, October 1 at 11 AM PST.  This is a free class. In this session, we’ll address the loan estimate form with a focus on questions raised by technology vendors. The new TILA-RESPA Integrated Disclosure rule will go into effect on August 1, 2015. Are you ready? Don’t forget to register for the webinar: http://www.philadelphiafed.org/bank-resources/publications/consumer-compliance-outlook/outlook-live

Are you thinking about hiring a team? I wanted to share with you a new book that I am reading (one I picked up at Sales Mastery). The book is called How the World Sees You by Sally Hogshead. I know we have all taken the different tests that are available like DISC or Myers Briggs but this book will help you put together a power team and help you work better with your team. I always love to find new ways to discover my “power personality.” If you decide to pick up the book, shoot me an email and let me know your thoughts.

 

CAMP Committees:

Are you interested in becoming more involved in the association? We have several committees and chapters that are looking for a few good men and women! Please reach out to the following committees if you would like to give back to your industry:

Education Committee:

Jon Kaempfer, jkaempfer@comstockmortgage.com

Ethics Committee:

Brian Weide, brianwmortgageguy@gmail.com

Public Relations:

Richard Wang, Richard@theloanstory.com

Support needed for one of our own:

Past CAMB President, Ted Grose is running for State Assembly. He has worked for over 32 years in the real estate industry, specializing in finance. Ted has personally founded, co-founded or led four real estate finance companies. He has been and remains intimately involved with sustainable homeownership through consumer advocacy. He is a CAMP member as well as past board member for NAMB. In a time of change, we need to have one of our own helping us fight for consumer advocacy. He has worked hard for us and now he needs our help. You can help him by donating to his campaign: https://ted4ca.nationbuilder.com/donate

Have you been wondering what CAMP has done for you lately or why you should be a member of CAMP? Well, Government Affairs Chair Scott Griffin and I would like to be able to answer your questions. We will be traveling the state and talking about the benefits of CAMP. Our first presentation will be in Northern California on Wednesday, October 1 from 12 to 2pm at Opera Plaza, 601 Van Ness Avenue, San Francisco, CA. Please contact Kelly Sherfy at ksherfey@ca-amp.org if you would like to attend.

Upcoming Chapter Events:

Orange County CAMP presents Social Media Boot Camp Mixer with Katie Wagner, October 1, 2014 from 4pm to 8pm at Il Fornaio Restaurant, Irvine CA

Orange County Presents The 2nd Annual Golf Tournament October 6, 2014 at Tijeras Creek Golf Course 29082 Tijeras Creek, Rancho Santa Margarita, CA. Contact Melanie McAllister 949-468-2614 or Melanie.mcallister@occamp.org

East Bay CAMP presents Perfect your Presentation Skills with Kitty Cole, Wednesday October 15, 2014 from 4pm to 6:30 pm at Arch Mortgage Insurance Company, 3003 Oak Road, First Floor Training Room, Walnut Creek, CA . Don’t forget to bring your referral partners! For more information, contact Bob Schwab at bschwab@rpm-mtg.com or 925-330-6588

Do you need your to take your Continuing Education? Check out these chapters who are offering the live classes:

TOMORROW!

Silicon Valley Chapter on Thursday, September 25th 2014 at KeyPoint Credit Union, 2805 Bowers Avenue, Santa Clara CA 95051. Register online at www.siliconvalleycamp.com

Orange County Chapter on Thursday, September 25th at Equinox, 1989 Main Street, Irvine, CA. Contact Melanie McAllister 949-468-2614 or Melanie.mcallister@occamp.org or Melanie@hightechlending.com

East Bay Chapter on Monday, October 6 ,2014 at Training Room of Arch Mortgage, 3003 Oak Road (near Treat & 680), Walnut Creek, CA. CAMP Members, contact – Audrey Boissonou, East Bay CAMP President, 925-788-1351 for your discount code and for more information.

Inland Empire Chapter on Thursday, October 9, 2014 at PRMG Training Room, 1265 Corona Point Court, Corona CA.  Lunch is provided. Must register by 10/6/14. Register and pay at www.ieCAMB.com

San Gabriel Valley Chapter on Wednesday, October 22, 2014. Contact Jesse Hernandez at JHernandez@ires.com for more details.

Keep in mind, registration for these classes begin at 8 and the class will start promptly at 8:30am. If you are late, you may not be able to take the class.

CAMP Statewide Calendar

If you would like me to include upcoming events please send me an email.

Until next week,

Michelle Velez, President

California Association of Mortgage Professionals

shellvelez@gmail.com  I  thecampsite.org

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Monday, September 22

Well here it is. The first in the saga as your NAMB CEO. This Monday Morning Messenger is going to be a little different as I just wrote one a few days ago and I used a lot of my news there. However, I have a lot of things to say here.
First, I want to thank all of you that have sent me cards and thank you notes about being your President. Your kind words are very appreciated and I truly am humbled by all of your thoughts and comments. I will try to bring you the same dedication as your new CEO.
Second, John Councilman, our new NAMB President, has really taken the helm and is putting together an agenda for NAMB to protect and attack where necessary, the mortgage professionals and concurrently the consumers they serve. It won’t be long and he will be announcing the committee chairs and their vice chairs for this coming year. Government Affairs is already off and running.

One of the items that will be instrumental for NAMB this year to promote and extend its reach is the Lending Integrity Seal of Approval. This is going to be one of the main focuses of the membership committee and you are going to hear a lot from Kay Cleland, Membership Chair, throughout the year. If you do not have yours, visit the NAMB website and see the requirements that you need to get it. Don’t waste time, register for it while you are there. We want to have everyone get it this year. It cost you nothing to get it once you are a member. Remember, your whole office needs to be a member and register for it before the office can use it in their advertising.
I want to make a special thank you to Ginny Ferguson for all her hard work in putting together the 40th Anniversary Retrospective Photo CD to play at the Awards Banquet. It was great to see all of the old faces of people that have made us who we are today. She spent a lot of hours together with Garrett Scott, Lead Videographer from the NMP’s Mortgage News Network to make this happen. Thank you for the great job. I have to admit that the YMCA gig from Hawaii about coming to Cleveland was a huge hit.
I was in Maine right before I went to NAMB National and I was truly impressed with the turnout. They are a combined association with the Mortgage Bankers and they have a great base of members. I am going to work with them to help them increase their membership in the coming months. I have to say that I was treated very well and I appreciated their hospitality. I wish I could have stayed a few more days, it was beautiful and I enjoyed their hospitality. Thank you to the entire Maine Board.
This coming week I will be going to Seattle for their conference. I really like Seattle and it holds a lot of memories as this is the city that the 2007 National Convention was held and it is where I was sworn in as a member of the NAMB Board.

This year is going to be a fun year for me. I will be chairing the Nominations Committee and we will be putting together the people that will be on the Board in 2015-2016. If you have ever thought about running for the Board, start thinking about it now. We will be putting this together around the middle of February and we will be asking for your information. More about this in the coming months.
I hope everyone enjoyed NAMB National as much as I did. I was able to share my last days as President with all of you and my family. A big thanks goes out to Vince Valvo CEO of Agility Resources Group, NAMB National’s event planner for the great conference.

Until next week!!!

Donald J. Frommeyer, CRMS, CEO
NAMB—The Association of Mortgage Professionals
namb.ceo@namb.org www.joinnamb.com

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Thursday, September 18

WOW! What a fantastic week we had at the NAMB National Conference in Las Vegas. The response from all who attended was really outstanding.
We had nearly 2,100 attendees at the three-day event, and next year, we are pushing for attendance totals to hit the 2,500 mark. In 2015, we are returning to the Luxor, October 17-19, 2015 for NAMB National 2015. We will start putting next year’s event together after the first of the year, but mark down those dates and plan to attend.
Monday’s portion of the conference was really good, both in content and in attendance. We had 104 people take the class taught by MEC, and attendance at the roundtable discussions was very good. But attendance at the Legislative Update and the CFPB discussion was standing room only. We had nearly 200 attendees at this highly informative session!

At the Awards Dinner, Fred Kreger was honored as NAMB’s Mortgage Professional of the Year, Rick Bettencourt won the Kathy Love Volunteer of the Year Award, and John Stevens won the Leadership Award. MEC Education won the 2014 Affiliate of the Year Award for all of their hard work, dedication and commitment to helping NAMB members with their educational needs. And to round out the major awards, Harry Dinham was honored with the Distinguished Service Award and also received his President’s Ring for his years of service to the association.
As far as the Presidential Awards, I gave the following people this award as thanking them for helping me during my term as association president: Valerie Saunders from the Florida Association of Mortgage Professionals (FAMP), the mother of NAMB; David Luna of MEC for all of his help with education and working with our national committee’s educational services; Rick Bettencourt, NAMB’s Government Affairs Chair, who has worked tirelessly in an effort to protect our members from harmful legislation; Roy DeLoach, our lobbyist, for all of his efforts on Capitol Hill to help our association; Vince Valvo, who has strived for the past three years to make NAMB National such a success; and finally, my wife, Barb Frommeyer, for her strength and huge support that has allowed me to spend long hours working for you and the association for the past three years.
I also gave special recognition to the heads of the Government Affairs Committee: Rick Bettencourt, Fred Kreger and Valerie Saunders. I had arranged to have my congressman have a flag flown over the Capitol Building for them.
As you all know, our NAMB president is John Councilman from the great state of Florida. John has assumed the duties of NAMB president and has also assumed the e-mail address of the president. You can reach him at president@namb.org. If you have any suggestions or would like to help with committee work, please let John know.
I assumed the role of chief executive officer for NAMB on Sunday. I am thrilled to be able take on this role and work a little more behind the scenes. My duties will be to address the issues of the NAMB Policy and Procedures Manual, help with NAMB National, continue to work with our public relations campaigns and working with other industry partners on moving NAMB forward, stay involved with the Government Affairs Committee, and to work with the incoming executive Board on the tasks of becoming president.
I leave you this week with just a few words of thanks. It has been an extremely wonderful three years as your president. It was truly an honor to be the point person of this association, and I will continue to bust my behind to work and represent you as CEO of NAMB. I am not going away … I will be here for you until I can no longer work. My new e-mail address is namb.ceo@namb.org. I will continue to write my Monday Morning Messenger (on a Monday rather than a Thursday!), and I am here if you need me. Keep in touch, and let me know how I can help.

Until next week!!!

Donald J. Frommeyer, CRMS, CEO
NAMB—The Association of Mortgage Professionals
namb.ceo@namb.org www.joinnamb.com

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FHFA reps and warrants policies have “significant and unresolved” risks

Watchdog: FHFA’s implementation was rushed and flawed

CLICK HERE FOR THE FULL REPORT

Ben Lane
September 17, 2014

When the Federal Housing Finance Agency implemented new representation and warranty policies for Fannie Mae and Freddie Mac on Jan. 1, 2013, it did so in a rushed and flawed manner that exposes the government-sponsored enterprises to significant risk, the FHFA’s watchdog said in a new report.

In a new report from the FHFA’s Office of the Inspector General, the OIG said that the FHFA mandated a new rep and warranty framework for the GSEs and implemented it “despite significant unresolved operational risks to the Enterprises.”

The policy, which was originally proposed by the FHFA’s Acting Director Ed DeMarco in September 2012, included several changes to the GSEs rep and warranty policies, including those relating to credit underwriting and eligibility of the borrower and property that were formerly effective for the life of the loan.

The new framework also granted repurchase relief to sellers if the loans had acceptable payment history of 12, 36, or 60 months, depending on the loan product and when it was acquired.

When the changes were announced, DeMarco indicated that the taxpayers would be better protected from future losses because of the more conservative approach by the GSEs.

“Ultimately, better quality loan originations and underwriting, along with consistent quality control, help maintain liquidity in the mortgage market while protecting Fannie Mae and Freddie Mac from loans not underwritten to prescribed standards,” said DeMarco said at the time. “These efforts contribute to a firm foundation for a new, sustainable housing finance system for the future.”

But according the FHFA-OIG, the changes were implemented far too quickly and did not allow the GSEs to fully implement the processes, procedures and systems either would need to operate within the new framework by the established start date of Jan. 1, 2013.

According to the OIG report, Freddie Mac said, in a risk analysis published in August 2012, that it would need two years to fully update its systems, including the creation of two new systems to track loan level data and to allow sellers to receive feedback on mortgage risk and appraisal quality prior to loan delivery, to support the new guidelines.

“Despite FHFA’s awareness that Freddie Mac would not have the systems and tools in place it deemed necessary to help identify non-compliant loans and reduce credit losses, FHFA continued with its Jan. 1, 2013, implementation for the new framework,” the OIG report said.

Fannie Mae also told the FHFA that it needed a significant amount of time to update its systems and, as of July, still had not fully enhanced its systems to the appropriate level, according to the OIG report. Fannie said that the completion and full rollout of those systems is projected to occur in late 2015.

As with Freddie Mac, the FHFA did not determine whether Fannie Mae had the necessary systems in place to support the framework, the OIG report said.

“As a result, there is an inherent risk for potential errors and the Enterprises may experience credit losses that otherwise may have been mitigated through use of contractual remedies such as repurchases,” the OIG said in its report.

“FHFA directed the Enterprises to implement the new framework without allowing sufficient time for them to fully implement and test pre- and post-loan delivery risk assessment tools, systems used to track loan information related to the new framework, and systems that support the Enterprises’ quality control processes,” the OIG report continued.

“As a result, there is potentially unmitigated risk of errors in the new loan review framework and the Enterprises may experience credit losses that otherwise could have been avoided both by the structure of the framework and the systems and processes employed to implement it.”

The OIG report calls the reps and warrants changes a “sea-change” to the GSEs’ risk management programs and quality control processes. “The financial magnitude is based on the Enterprises’ level of single family business following the implementation of the new framework,” the OIG said in its report.

“For example, in 2013, the first year for the new framework, the Enterprises bought approximately 5.6 million loans from sellers with a total unpaid principal balance exceeding $1.13 trillion.”

The OIG report also found that the FHFA mandated a 36-month “sunset” period for rep and warranty relief, “without validating the Enterprises’ analysis or performing sufficient additional analysis to determine whether financial risks were appropriately balanced between the Enterprises and sellers.”

The OIG report also said that the January 2013 implementation “did not adequately consider operational risks related to implementation of an appropriate infrastructure to support the new framework through upfront monitoring of loan quality and post-purchase quality control prior to the sunset period.”

The report also said, “FHFA’s decision-making process concerning the new framework was not supported by complete, thorough, and consistent analysis.”

According to the OIG report, the “lack of due diligence on FHFA’s part is significant,” because it impacts the GSEs ability to:

1. Conduct quality control reviews earlier in the loan process, generally between 30 to 120 days after loan purchase

2. Evaluate loan files on a more comprehensive basis to ensure a focus on identifying significant deficiencies

3. Leverage data from the tools currently used by Fannie Mae and Freddie Mac to enable earlier identification of potentially defective loans as mandated by FHFA

“Without adequate systems and processes, achieving a positive economic outcome for the Enterprises through implementation of the new framework is uncertain,” the OIG report said. “Conversely, the sellers stand to benefit from the lack of preparation as loans start to pass the sunset dates without thorough screening of their quality.”

The OIG suggests two changes that the FHFA should implement to address these issues. First, the OIG recommends that the FHFA assess whether the GSEs’ current operational capabilities minimize financial risk that may result from the new framework. Second, the OIG recommends that the FHFA assess whether the financial risks associated with the new framework, including the sunset periods, are balanced between the Enterprises and the sellers.

As is custom with the OIG reports, the OIG forwarded a copy of its initial findings and recommendations to the FHFA for response.

The FHFA partially agreed with the first recommendation, saying that it would take the OIG recommendations into account when it was forming its operational plans for 2015.

“Although FHFA’s planned corrective action is potentially responsive to OIG’s recommendation, it is not clear what specific steps FHFA plans to take or how it plans to document the results of the recommended assessment, including areas of identified risk, planned actions, timelines to mitigate each area of identified risk, and estimates of when each Enterprise will be reasonably equipped to perform loan quality review safely and soundly within the new framework,” the OIG report said.

The FHFA did not agree with the second recommendation, saying  “revisiting its decisions regarding the new framework sunset periods and related payment history requirements to prepare an analysis of the financial risks associated with a previous release of the framework may have adverse market effects on future revisions to the framework, and may not align with the FHFA objective of increased lending to consumers consistent with Enterprise safety and soundness.”

The OIG report does note that the FHFA did agree to enhance its documentation and analysis going forward, including identifying and addressing risks for the GSEs, and surrounding decisions that will impact the representation and warranty framework.

“Further, FHFA stated it will continue to evaluate, document, and revise the framework, taking into account stakeholder comments and various market factors in order to improve credit access for consumers, consistent with Enterprise safety and soundness,” the OIG report said.

“In this regard, OIG did not see that FHFA fully considered the economic impact and in turn the safety and soundness of the Enterprises in the analysis supporting the initial release of the framework in September 2012. Thus, the actions identified by FHFA are positive steps and can go a long way toward meeting the intent of OIG’s recommendation.”

But the OIG cautioned that it remains concerned that the FHFA has not fully developed the potential impact of the rep and warranty guidelines on the GSEs and the taxpayers.

“The potential consequences of continued implementation of the new framework are substantial and warrant more careful consideration by FHFA,” the OIG said.

“Without a comprehensive analysis to assess potential economic impacts on the Enterprises associated with the framework and its revisions in order to establish a baseline to measure performance, FHFA is unable to make fully informed decisions regarding the need for and financial risks associated with further updates to the framework as the agency stated it would do.”

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House Approves QM ‘Points and Fees’ Fix

Sept. 17, 2014–Sorohan, Mike msorohan@mba.org
The House this week approved a package of bills that provide “fixes” to the Dodd-Frank Act, including changes sought by the Mortgage Bankers Association to the Consumer Financial Protection Bureau’s Ability to Repay rule and its Qualified Mortgage definition.

By a 327-97 vote, the House approved four bills that modify Dodd-Frank. Specifically, the language in H.R. 5461 (https://beta.congress.gov/bill/113th-congress/house-bill/5461) would make it easier for safer mortgages to fit under Dodd-Frank’s cap on “points and fees” by providing equal treatment to title charges, regardless of whether or not a consumer chooses a title company affiliated with the lender. It also promotes consumer choice and expands access to mortgage credit for qualified borrowers.

Rep. Bill Huizenga, R-Mich., who sponsored the bill with Rep. Andy Barr, R-Ky., said the bill would help low- and middle-income borrowers as well as prospective first-time homeowners realize a portion of the American Dream. “Hard-working families across the nation should not be denied access to a qualified mortgage because of technicalities that are largely out of their control,” he said.

These QM changes previously passed the House on June 9 as part of H.R. 3211, the Mortgage Choice Act. That bill passed the House unanimously thanks in part to the grass roots efforts of members of MBA’s Mortgage Action Alliance.

The package passed by voice vote on Monday with no vocal opposition; however, Rep. Maxine Waters, D-Calif., ranking member of the House Financial Services Committee, expressed opposition to the bill on procedural grounds and asked for a recorded vote, which took place yesterday.

Ahead of this week’s votes, the Mortgage Action Alliance, MBA’s grassroots advocacy arm, issued a “Call to Action” urging its members to contact their House member to vote in favor of the package.

“We are asking you to once again make your voices heard and contact your Representatives to urge support for this broader package, in order to give it the momentum needed for the Senate to consider the bill before Congress adjourns,” the Call to Action said.

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Wednesday, September 17, 2014

It’s been a busy week for me. I got back late Monday night from Sales Mastery and NAMB National. Both events were fantastic. If you were not able to attend, I suggest you think about attending next year. I was able to connect and meet so many people and learn so much new ways to gain business. On a happy note for me, I met our President Elect, Anthony Lombardo’s team from Arizona. Todd Duncan was having a social media picture contest and I am able to share the honor of winning with two members of Anthony’s Team!

NAMB National was hugely attended. It was great to meet and network with Loan Originators all over the country. I am very pleased to announce that CAMP’s Past President, Fred Kreger won NAMB Mortgage Professional of the year!  Fred has been working hard with CAMP and NAMB fighting for consumer advocacy and working closely with legislators and regulators in support of the loan originator and brokers. Fred is probably one of the hardest working people I know in the mortgage industry. Congratulations, Fred. We really appreciate all that you do for us! Additionally, the following awards were given:

Kathy Love Volunteer of the Year: Rick Bettencourt

NAMB Affiliate Company of the Year: Mortgage Educators and Compliance

NAMB Leadership Award: John Stevens

NAMB Distinguished Industry Service Award: Harry Dinham

A big congratulations and thank you to all the winners.

 

Cha-cha-changes….

As you know, there is change coming next year with the integration of the Good Faith Estimate and Truth in Lending disclosures. If want to find out more information. The Federal Reserve is hosting a the 3rd in a series of three webinars on Wednesday, October 1 at 11 AM PST. This is a free class. In this session, we’ll address the loan estimate form with a focus on questions raised by technology vendors. The new TILA-RESPA Integrated Disclosure rule will go into effect on August 1, 2015. Are you ready?

Register for the webinar:

http://www.philadelphiafed.org/bank-resources/publications/consumer-compliance-outlook/outlook-live

Did you know you can also register to receive CFPB Regulatory updates? By the way, you need to register on more than one page. One registration is for consumers and the others are for industry professionals. The registration link for industry professionals is a little hard to find but you want to be registered for the most recent updates on regulatory changes from the CFPB. If you have not already registered for the CFPB regulatory updates you can do so below. The link to register on is under Regulation Implementation. This registration will provide you with updates from the CFPB on Regulatory Implementations. You can click the link here to register:

http://www.consumerfinance.gov/regulatory-implementation/tila-respa/

On the legislative front:

One of our own is running for State Assembly. If you have not met him, let me give you some background for Ted Grose. He has worked for over 32 years in the real estate industry, specializing in finance. Ted has personally founded, co-founded or led four real estate finance companies. He has been and remains intimately involved with sustainable homeownership through consumer advocacy. He is a CAMP member and is a past President as well as past board member for NAMB. In a time of change, we need to have one of our own helping us fight for consumer advocacy. He has worked hard for us and now he needs our help. You can help him by donating to his campaign: https://ted4ca.nationbuilder.com/donate

Upcoming Chapter Events:

TOMORROW!

Sacramento CAMP presents Industry Mixer at Stones Gambling Hall, 6510 Antelope Road, Citrus Heights, CA. This is a joint mixer with CAMP, NAHREP, YPR Sacramento and Placer, and WCR Sacramento and Placer. Free event but you must RSVP in advance. Click:  https://events.r20.constantcontact.com/register/eventReg?llr=aa847kpab&oeidk=a07e9p3f22f8f2ca23e

Orange County CAMP presents Social Media Boot Camp Mixer with Katie Wagner, October 1, 2014 from 4pm to 8pm at Il Fornaio Restaurant, Irvine CA

Orange County Presents The 2nd Annual Golf Tournament October 6, 2014 at Tijeras Creek Golf Course 29082 Tijeras Creek, Rancho Santa Margarita, CA. Contact Melanie McAllister 949-468-2614 or Melanie.mcallister@occamp.org

Do you need your to take your Continuing Education? Check out these chapters who are offering the live classes:

North LA Chapter on Thursday, September 18, 2014 Location to be determined. Contact Gene Lanier at glanier@gmail.com for more details.

Silicon Valley Chapter on Thursday, September 25th 2014 at KeyPoint Credit Union, 2805 Bowers Avenue, Santa Clara CA 95051. Register online at www.siliconvalleycamp.com

Orange County Chapter on Thursday, September 25th at Equinox, 1989 Main Street, Irvine, CA. Contact Melanie McAllister 949-468-2614 or Melanie.mcallister@occamp.org or Melanie@hightechlending.com

East Bay Chapter on Monday, October 6 ,2014 at Training Room of Arch Mortgage, 3003 Oak Road (near Treat & 680), Walnut Creek, CA. CAMP Members, contact – Audrey Boissonou, East Bay CAMP President, 925-788-1351 for your discount code and for more information.

Inland Empire Chapter on Thursday, October 9, 2014 at PRMG Training Room, 1265 Corona Point Court, Corona CA.  Lunch is provided. Must register by 10/6/14. Register and pay at www.ieCAMB.com

San Gabriel Valley Chapter on Wednesday, October 22, 2014. Contact Jesse Hernandez at JHernandez@ires.com for more details.

Keep in mind, registration for these classes begin at 8 and the class will start promptly at 8:30am. If you are late, you may not be able to take the class.

CAMP Statewide Calendar

If you would like me to include upcoming events please send me an email.

Until next week,

Michelle Velez, President

California Association of Mortgage Professionals

shellvelez@gmail.com  I  thecampsite.org

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Washington is protecting buyers right out of homeownership

BPC Housing Commissioner: Give borrowers a chance to fail

Trey Garrison
September 16, 2014 12:37PM

Government is protecting first-time, lower- and middle-income borrowers out of homeownership.

That’s the opinion of Rob Couch, one of the commissioners for the Bipartisan Policy Center’s housing commission, sitting down after Tuesday morning with HousingWire at the BPC Housing Summit in Washington, D.C. Tuesday. And it was a view echoed by politicians and housing experts alike at the summit.

Couch is an attorney for Bradley Arant Boult Cummings, and also served as General Counsel of the U.S. Department of Housing and Urban Development from June 2007 to November 2008. Prior to his position with HUD, Couch served as president of Ginnie Mae, where he was responsible for administering its mortgage-backed securities program, valued at over $414 billion, and its $123 billion Real Estate Mortgage Investment Conduit program.

“With any pool of loans, some portion will go bad,” he said, speaking with HousingWire before moderating a panel that hit on similar issues. “Lost job, loss of spouse – some life-changing event.

“Then in the mid-2000s the stage was set for a lot of the traditional reasons for defaults being eclipsed by failures from loan features being inappropriate to that particular borrower. A three-year ARM or interest-only may be great for someone whose job will have them moving in three years, but not for someone just getting the loan for the low initial rate hoping the value of the home will rise enough,” Couch said.

While a lot of finger-pointing goes towards lenders and sellers of the bundled loans that led to the subprime crisis, at least some of the blame falls on the borrowers.

“The borrower shares blame in this – they signed. They breathed on the mirror,” Couch said.

Regardless, he said, in any pool of loans a certain percentage will go bad and for reasons other than traditional.

“Now, you can prevent all foreclosures by making no loans,” he said. “But we don’t want that. What we should be talking about is where the bar should be. I think it’s too low right now.

“You have to give good people the opportunity to fail. We are setting the bar too low,” Couch said. “We should be shooting for higher delinquencies and foreclosures. We should be willing to run a little more risk.”

He said that with the regulations, QM and other regulatory limits, the housing industry and mortgage finance industry are trying to be too safe.

“But the net result is home ownership is plummeting. First-time home sales are at their lowest in 40 years. The reason is the bar is so low that this loss level has the biggest impact on first-time, low- and moderate-income borrowers,” Couch said. “The very people we are supposed to be trying to help and protect.”

The rules for protecting buyers are pricing them out, Couch said.

Three ways to make money in mortgage lending, he said – points and fees, yield spreads, and servicing sales.

“There’s a 3% cap on points and fees. So on a $150,000 home, that’s $4,500. But the (Mortgage Bankers Association) will tell you that the average cost of originating a mortgage is $8,000. And lenders will tell you that the smaller, marginal loans are much more expensive to originate,” Couch said.

“For the yield spread premium, that’s also capped,” he said.

The third, sale of servicing, has its own problem.

“A servicer will tell you it costs $10 a month to service a normal mortgage,” Couch said. “But if it goes past 60 days it costs $100 a month to service. So servicers won’t pay you much for low-FICO loans because it may be a money loser.”

That’s all three, Couch said.

“You can’t make it on the points and fees, can’t make it on the yield spread, can’t make it on the servicing – so what do you do?” he asked. “You don’t make the loan.”

The bottom line?

“All the laws set up to protect low-income, moderate-income and first-time buyers are protecting them out of a chance to buy a home. And consider the difference it makes on the community to have homeowners, to take chances on people on the margins and have them grow into responsibility,” he said.

Couch said he is not talking about reckless lending, but rather more flexibility in expanding credit and in making up costs that would subsidize a prudent but realistic amount of foreclosures, so that lenders would open up to a broader consumer base.

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The new TILA-RESPA Integrated Disclosure rule will go into effect on August 1, 2015. Are you ready?

Join us on Wednesday, October 1 at 2 p.m. EDT for a 90 minute webinar to answer some frequently asked questions about the TILA-RESPA Integrated Disclosure rule. The webinar will be hosted by the Federal Reserve.

Register for the webinar:
http://www.philadelphiafed.org/bank-resources/publications/consumer-compliance-outlook/outlook-live

This will be the third in a series of webinars to address the new rule as creditors, mortgage brokers, settlement agents, software developers, and other stakeholders work to implement it over the next year. In this session, we’ll address the loan estimate form with a focus on questions raised by technology vendors.

Thank you,

The Consumer Financial Protection Bureau

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