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NAMB Government Affairs Update

2014 Mortgage Survey

The CFPB Wants To See Data

Recently the Government Affairs team met with the CFPB to discuss mortgage brokerage compensation, the 3% cap on points and fees, as well as loan origination compensation. The CFPB provided excellent industry insight and guidance into several of the key areas plaguing mortgage originators and mortgage brokerage entities.

It is obvious the CFPB is a data driven organization and NAMB is determined to show them that the mortgage broker model is extremely effective in mitigating upfront costs for consumers. We are also determined to show them that thousands of small businesses are being adversely impacted due to the limitation on entity revenue.

So, here we are. Your industry needs your help. Your industry needs you to participate and respond to this survey to the best of your ability.

If you don’t have exact numbers, please provide us with your best estimate.

Take the NAMB Survey HERE

The major data points we would like to see are:

  1. TOTAL number of Loans closed in YTD.
  2. TOTAL Dollar Volume of your loans YTD.
  3. TOTAL amount of Mortgage rebates that you gave to the customer to help pay their closing costs YTD. This amount will be the sheet price of the loan, minus your Lender Comp, minus any hits and this would be the net amount that you would have given back to the customer to help pay fees and reduce closing costs.

Each survey participant will receive the video webinar,

Getting More Business With Realtors presented by Maximum Acceleration. In addition, Mortgage Educators will be giving away 5

8-hr NMLS classes to be used for 2014 or 2015.

Here is the bottom line, NAMB has open lines of communication with our regulators and will continue to work with them to improve the state of housing and do what is best for the consumer and small business mortgage professionals.

Just remember, It does not matter if you are a mortgage broker or a mortgage banker, NAMB is here for you…the mortgage professional.

For more information on NAMB’s Government Affairs projects or on how you can get involved, contact Rick Bettencourt anytime at governmentaffairs@namb.org.

Please share this with your colleagues. Thank you for your time and support.

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CFPB finalizes amendments to mortgage rules

Posted: 23 Oct 2014 08:05 AM PDT

Richard J. Andreano, Jr.

The CFPB has issued a final rule amending certain provisions of the 2013 Title XIV final mortgage rules.  While in its press release the CFPB describes the amendments as “minor adjustments to its mortgage rules,” the final rule contains several major changes from the CFPB’s proposal.

QM Points and Fees Cure.  Generally, to be considered a qualified mortgage (QM), a mortgage loan must not contain points and fees that exceed three percent (3%) of the loan if the principal is $100,000 or more.  The final rule addresses the scenario when a lender discovers post-consummation that a loan it originated is not a QM because the points and fees exceeded the 3% (or other applicable) cap.

As proposed, the rule creates a procedure permitting the lender to refund the overage amount of points and fees to the borrower within 210 days of consummation and keep the loan’s QM status.  However, while allowing a longer cure period than the proposal’s 120 day period, the final rule only allows a cure for loans consummated on or after the final rule’s effective date and on or before the sunset date of January 10, 2021.  Also unlike the proposal, the final rule includes events that cut off the ability to cure.  The cure is only available prior to the occurrence of any of the following events: (1) the consumer’s institution of an action in connection with the loan; (2) the creditor, assignee or servicer receiving written notice from the consumer that the loan’s points and fees exceed the applicable limit, or (3) the consumer becoming 60 days past due.  And in another significant change from the proposal, the final rule requires the lender to pay interest on the points and fees overage at the contract rate applicable during the period from consummation until payment is made to the consumer.

The final rule includes a requirement for the lender to maintain and follow policies and procedures for “post-consummation review of points and fees” (but expressly does not require a full loan review as some commenters thought the proposal would have mandated).  However, the final rule does not include the CFPB’s proposed requirement that the lender must have originated the mortgage loan in good faith as a QM.

Alternative Small Servicer Definition.  Under the RESPA-TILA mortgage servicing rules, “small servicers” (as defined by the servicing rules) are exempt from certain provisions of the rules if they service 5,000 or fewer mortgage loans annually and meet other requirements.  The CFPB proposed an alternative definition of a small servicer to address concerns that nonprofits that receive fees to service loans for other associated nonprofits might not be able to qualify for the small servicer exemption.  As proposed, the final rule expands the definition of a small servicer to include a nonprofit entity that services 5,000 or fewer mortgage loans, including any mortgage loans services on behalf of associated nonprofit entities, for all of which the servicer or an associated nonprofit is the creditor.

Nonprofit Lender Exemption from ATR Provisions.  The ability-to-repay (ATR) rule exempts certain nonprofits that make mortgage loans to low or moderate income borrowers from certain provisions of the rule if they make no more than 200 dwelling-secured loans per year and meet other specific requirements.  As proposed, the final rule amends the exemption so that subordinate lien loans for down payment assistance and certain other purposes that are interest-free, forgivable, and meet certain other conditions (so-called “soft seconds”) would not count toward the annual 200 loan limit.

Effective Date.  Except for a commentary revision dealing with the relationship between the QM cure and the RESPA/Regulation X tolerance cure under the TILA-RESPA integrated disclosure rule that becomes effective next year, the final rule becomes effective upon its publication in the Federal Register.  Under Regulation X, if any charges at settlement exceed the charges listed in the good faith estimate by more than the permitted tolerance, the lender can cure the tolerance violation by reimbursing the amount by which the tolerance was exceeded on or within 30 calendar days after settlement.  The final rule adds a comment that provides that amounts paid to a consumer pursuant to the QM cure can be offset by amounts paid to the consumer pursuant to the RESPA/Regulation X tolerance cure to the extent the amount paid to cure the tolerance violation is being applied to points and fees.  Effective August 1, 2015, to coincide with the effective date of the CFPB’s final rule integrating the TILA and RESPA application and closing disclosures, that comment will be replaced with a substantially similar new comment that references the tolerance cure provision in the TILA-RESPA integrated disclosure rule.

Unaddressed Issues.  In its proposal, the CFPB requested comments on two additional issues: (1) whether and how to provide for a cure provision for QM loans that inadvertently exceed the 43% debt-to-income ratio required under the ATR rule; and (2) the credit extension limit applicable to the small creditor exemption under various Dodd-Frank rules.  The final rule does not address these issues.  In the final rule’s supplementary information, the CFPB states that it is considering comments submitted on these issues and whether to address them in a future rulemaking.

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Wednesday, October 22, 2014

We have a little more than a week left in October. While I’m really enjoying the cooler fall weather, I’m hoping for rain. We did have one day of rain but it’s really not enough. On a different note, I’m happy to see the SF Giants in the World Series. I don’t know about you but I thought that was an amazing game last night!

The CFPB is seeking comments on a proposed rule amending Regulation C to implement amendments to the Home Mortgage Disclosure Act. The Bureau is looking to add several new reporting requirements and to clarify several existing requirements. One of the items in question is the required time for re-disclosure once a file is locked. The question is what would the lender interpretation be? Is this another requirement that will hold up your loan? How will the new disclosure be required to be delivered? You can review the proposed rule and make comments by clicking the link below: http://www.consumerfinance.gov/notice-and-comment/

 

Are you still utilizing FHA insured loans for houses that are owned by the seller for less than 90 days? If so, you should have a conversation with your Realtor referral partners. FHA guidelines are set to revert back to requiring a seller to own a home for a minimum of 90 days before reselling the home at the end of this year.

Would you like to make a difference for your industry but don’t have a lot of time? You can help by providing information. NAMB is seeking your help so they may tell your story. The CFPB is looking for data from the mortgage industry in order to make favorable adjustments to the stringent regulatory changes that are currently in place. Now is not a time to say, “My voice doesn’t matter.” They need your input in a survey that shouldn’t take more than 5 or 10 minutes of your time. You can estimate your numbers if you cannot remember the exact numbers.  Here is the link:  Click Here

The major data points we would like to see are:

  • TOTAL number of Loans closed in YTD.
  • TOTAL Dollar Volume of your loans YTD.
  • TOTAL amount of Mortgage rebates that you gave to the customer to help pay their closing costs YTD. This amount will be the sheet price of the loan, minus your Lender Comp, minus any hits and this would be the net amount that you would have given back to the customer to help pay fees and reduce closing costs.

Each survey participant will receive the video webinar, Getting More Business With Realtors presented by Maximum Acceleration. In addition, Mortgage Educators will be giving away 5 8-hr NMLS classes to be used for 2014 or 2015.

The bottom line is CAMP is working with NAMB to keep the lines of communication open with our regulators. Together we can improve the state of housing and do what is best for the consumer and small business mortgage professionals. It doesn’t matter if you are a mortgage broker or a mortgage banker, CAMP/NAMB is here for you…the mortgage professional.

Legislative update:

Things are quiet on the State and Federal Legislative fronts. However, there is an issue brewing in San Francisco that I would like you to be aware of. Why? Because if it passes in San Francisco, it could be coming to your home town soon!

Proposition G is currently on the Ballot in San Francisco. It would have a negative effect on your clients and could hurt the San Francisco housing market. If passed, Prop G would impose a tax up to 24% on the total sale price of homes with 2 or more units and single-family homes with in-law units sold within 5 years of ownership. With the median home sale price in San Francisco over $1 million, homeowners may face up to $240,000 in taxes if they choose to sell their home.  This tax will scare away middle-class homebuyers, drive up prices for new renters and tenants, and damage the housing market as a whole. Did I mention that this tax is also retroactive? It does have a sliding scale but I’m sure you can see what this will do to the housing market.

The NO on G campaign is looking for help. Grass roots door knocking, phone calls or just a donation. If you would like to read more on this, click on here for more details:http://www.stopthehousingtax.com/

Upcoming Chapter Events:

Southern Los Angeles County CAMP is hosting “How CAMP is working for you” Scott Griffin and I will be attending on Wednesday, November 12, 2014 from 11:30 to 1pm. in Long Beach. Exact location to follow. For more information, contact Chapter President, Nelson Otero 714-373-5700 or notero@firstalliedfinancialservices.com

Silicon Valley CAMP is hosting their monthly breakfast meeting on Friday, November 14, 2014 from 8:30 to 10 at Three Flames Restaurant, Banquet Room, 1547 Meridian Avenue, San Jose, CA 95125. No need to register, pay at the door.

San Francisco Peninsula CAMP is hosting “Everything you need to know about Credit Scoring and More” on Wednesday, November 19, 2014 at Dominic’s @ Oyster Point, 360 Oyster Point Blvd, South San Francisco, CA. For more information, contact Chapter President Donna Aldrich at 415-345-4320 or donna@donnaaldrich.com

Online Training:

New CAMP Benefit

Do you hate to sit in an all-day class? Are you too busy to give up just One day of your time? Do you still need your NMLS CE? Check out our new CAMP benefit, Online Training: CAMP members now receive discounted rates for online NMLS training.

Click Here for More Details

 

Live Chapter Continuing Education:

Greater Sacramento Chapter is hosting a live 8 hour NMLS class here in the Sacramento area on Tuesday,

October 28, 2014. We are welcoming back Ginger Bell from Strategic Compliance Partners to teach this class once again. This fulfills the yearly 8 hour continuing education requirement for Mortgage Loan Originators. The price (including lunch) is $99 for CAMP members and $139 for non-members. Please be sure to register ASAP to save your spot. Registration link and additional information here: Click Here

Inland Empire Chapter is hosting a live 8 hour NMLS class on Thursday, November 6, 2014. This will be held at the PRMG Training Room, 1265 Corona Point Court, Corona CA 92879. Huge discount for CAMP members! Register at www.iecamb.com

North Bay Chapter will be holding a final NMLS training class on Tuesday, December 2, 2014. This will be held in Petaluma. More details to follow but you can contact Rick Reith at 415-740-8834 for more info.

Silicon Valley Chapter will be holding their final NMLS training class on Wednesday,December 3, 2014This will be held at the Silicon Valley Business Center, 1900 Camden Avenue, San Jose, CA. Click here to register: http://www.siliconvalleycamp.com/event-1780648

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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Financial Regulators Finalize QRM Rule

Author: Tory Barringer October 21, 2014 0

Federal regulators announced on Tuesday they have finalized a rule establishing a risk retention framework for mortgage lenders securitizing and selling loans.

The so-called qualified residential mortgage (QRM) rule, which was put up for consideration by FDIC’s board of directors Tuesday morning, would require banks to retain at least 5 percent of a loan’s risk when packing mortgages to sell to investors in the secondary market. The rule comes as a response to last decade’s housing bubble, when lenders let their standards slip and passed on the risk to investors, resulting in an economic crash as those mortgages defaulted.

The QRM rule is one of the bigger provisions mandated by the 2010 Dodd-Frank Act, with co-author Barney Frank remarking in the past that risk retention is “the single most important part of the bill.”

Regulatory leaders agreed, assuring lawmakers last month that they were close to completing the rulemaking.

The road to finalizing a QRM rule has been a bumpy one. Regulators—including FDIC, HUD, the Federal Reserve, the Securities and Exchange Commission, the Office of the Comptroller of the Currency (OCC), and the Federal Housing Finance Agency (FHFA)—first proposed a draft in 2011.

The group released a second proposal in 2013, removing some of the more contentious provisions—in particular, a requirement that banks must retain risk on mortgages with down payments lower than 20 percent—in response to industry concerns.

The finalized rule is more closely aligned with the Consumer Financial Protection Bureau’s (CFPB) qualified mortgage (QM) rule implemented early this year. Both rules exclude from qualification mortgages with debt-to-income ratios exceeding 43 percent, and both prohibit loans with riskier features like balloon payments or terms longer than 30 years.

In separate statements released Tuesday, regulators expressed optimism that the finalized rule will give the housing finance sector greater certainty, opening the door for more activity from private investors.

“Aligning the Qualified Residential Mortgage standard with the existing Qualified Mortgage definition also means more clarity for lenders and encourages safe and sound lending to creditworthy borrowers,” FHFA Director Mel Watt said. “Lenders have wanted and needed to know what the new rules of the road are and this rule defines them.”

Comptroller of the Currency Thomas J. Curry said securitizations can provide an incentive for lax underwriting if the weak credits can be transferred from originators to investors with no further responsibility for the loans.

“The rule we are approving today will require lenders to retain some of the risk for the loans that go into securitized pools except for home mortgages that meet the standards necessary under the qualified residential mortgage, or QRM, exception,” Curry said. “Under this rule, QRM is equivalent to QM – that is, the Qualified Mortgage rule approved by the Consumer Financial Protection Bureau.”

Industry groups were also optimistic about Tuesday’s announcement, praising policymakers’ efforts to avoid confusion by lining up QM and QRM together.

“This rule was required by Dodd-Frank to ensure that loans sold into the secondary market are properly underwritten, a goal which the QM rule also helps to ensure.  It is appropriate and good policy to align the two,” said Frank Keating, president and CEO of the American Bankers Association. “This will encourage lenders to continue offering carefully underwritten QM loans, and avoid placing further hurdles before qualified borrowers, allowing them to achieve the American dream of homeownership.”

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MBA calls the policy changes “extremely positive”

Sarah Wheeler
October 20, 2014

Federal Housing Finance Agency Director Met Watt and U.S. Secretary of Housing and Urban Development Julian Castro announced their plans to address some of the housing finance industry pain points in what MBA CEO David Stevens called “extremely positive” policy steps.

Speaking at the Mortgage Bankers Association Annual Convention & Expo on Monday, Watt and Castro outlined changes that would reduce confusion and risks for lenders.

“We know that access to credit remains tight for many borrowers, and we are also working to address this issue in a responsible and thoughtful manner,” Watt said. “Additionally, FHFA continues to evaluate ways to refine and improve the loss mitigation and foreclosure prevention policies at the Enterprises, because we understand that many individuals and families are still facing the possibility of foreclosure and are looking for alternatives to stay in their homes.”

Watt said that the FHFA was clarifying the Representations and Warranty Framework to help reduce repurchases.

“We know that the Representation and Warranty Framework did not provide enough clarity to enable lenders to understand when Fannie Mae
or Freddie Mac would exercise their remedy to require repurchase of a loan. And, we know that this issue has contributed to lenders imposing
credit overlays that drive up the cost of lending and also restrict lending to borrowers with less than perfect credit scores or with less conventional financial situations.”
Watt said the FHFA’s changes include clearly defining life-of loan exclusions, which fall into six categories:
1.  Misrepresentations, misstatements and omissions
2.  Data inaccuracies
3.  Charter compliance issues
4.  First-lien priority and title matters
5.  Legal compliance violations
6.  Unacceptable mortgage products
For loans that have already earned repurchase relief, Watt said that only life-of-loan exclusions can trigger a repurchase under the Reps and warranties framework.
In one of the most significant policy changes, Watt announced that the FHFA is setting a minimum number of loans that must be identified with misrepresentations or data inaccuracies to trigger the life-of-loan exclusion, so that the GSEs will be responding to a pattern of misrepresentations or data inaccuracies, not just outliers.
The FHFA is also adding a “significance” requirement to the misrepresentation and inaccuracies definition so that GSEs can factor in whether the inaccuracy would have prevented funding the loan at the front end.

Watt said the GSEs would be announcing more details on changes related to reps and warranties in the near future, including:

  • Developing an independent dispute resolution process
  • Identifying cure mechanisms and alternative remedies for lower-severity loan defects
  • Servicing representations and warranties
  • Modifying compensatory fees and foreclosure timelines.
“We have started to move mortgage finance back to a responsible state of normalcy – one that encourages responsible lending to creditworthy
borrowers while maintaining safety and soundness of the Enterprises,” Watt said. “While there is still more to do, FHFA and the Enterprises have
demonstrated the willingness and commitment to develop a better Representation and Warranty Framework for all parties.
“I hope our actions provide sufficient certainty to enable your companies to reassess existing credit overlays and more aggressively make responsible loans available to creditworthy borrowers. This will result in a housing market that is not only better for borrowers, but also better for the Enterprises and lenders and beneficial to our country, Watt said.
Watt also announced that the FHFA and GSEs are working to develop “sensible and responsible guidelines” for mortgages with loan-to-value ratios between 95% and 97%.

Watt said the The FHFA and GSEs are in the process of creating the Common Securitization Platform, which will create a shared securitization infrastructure for Fannie Mae and Freddie Mac that will operate under the Common Securitization Solutions corporate structure. The FHFA will be naming a CEO to the CSS by the end of the year, Watt said.

“The CSP is more than a simple technology project, and it will require significant changes to each of the Enterprises’ business practices,” Watt said.
The director also asked mortgage banker’s to comment on the membership requirements of Federal Home Loan Banks during the extended comment period. “I want to emphasize that getting input and feedback from stakeholders is a crucial part of FHFA’s policymaking process. So give us your input, not only on our FHLB Proposed Rule, but on other policy initiatives and decisions we are evaluating,” Watt said.
Julian Castro began his speech by reiterating that HUD understands the importance of credit availability.

“Credit is the lifeblood of the housing industry,” Castro said. “It’s in our entire nation’s interest to help more responsible Americans succeed in the housing market by expanding access to credit.”

Castro outlined HUD’s plan to expand access to credit with its Blueprint for Access initiatives:

  • Overhauling the Single Family Housing Policy Handbook to give lenders clarity on policies and compliance
  • Launching the Supplemental Performance Metric to capture a more in-depth view of a lender’s portfolio performance, comparing lenders on their performance with others doing business in specific credit score ranges
  • Redrafting the Loan Defect Taxonomy to streamline 99 different codes into nine categories of loan defects
  • Initiating a Ginnie Mae pilot program to give smaller lenders more access to the secondary market

The policy changes from Watt and Castro were anticipated from comments made last week, as HousingWire covered in a report from the Wall Street Journal. Stevens and other leaders also referenced the changes in their speeches this morning, challenging the regulators to ease the incredibly strict underwriting standards now required to originate a mortgage loan.

Following the announcement, Compass Point analysts said in a note to clients, “We view this development with cautious optimism as it reinforces our belief that policymakers are willing to embrace initiatives aimed at increasing the flow of mortgage credit.” Compass Point listed the biggest winners of this kind of credit box expansion as originators, private mortgage insurers and home builders.

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Per a Fed announcement, a group of six federal regulators will meet tomorrow to finalize the risk retention/qualified residential (QRM) exemption rules required under Dodd-Frank. The market is expecting a QRM rule which will track the CFPB’s Qualified Mortgage (QM) rule which would be a positive for the mortgage insurers as it would not mandate a high down payment-something that was proposed when the rule was first proposed over three years ago. The rule, mandated by Dodd-Frank, requires any securitizer of an asset-backed security to retain at least five percent of the credit risk unless 100% of the loans in the pool are made up of high-quality residential mortgages (the QRM exemption). Originally, the rule would have required a large down payment which would have, in our view, negatively impacted private mortgage insurers (MIs). However, since then, the rule was re-proposed and the regulators opened the door to a lower down payment requirement.

Most believe that the high down payment requirement will be dropped – a good thing for the MI biz. And many expect the QRM exemption will be similar to the CFPB’s QM which requires prudent underwriting practices (e.g., fully documented and verified borrower information) and bans non-amortizing loans and other nontraditional lending practices. All in all, look for whatever comes out tomorrow to provide some needed certainty to the asset-backed market. The rules are not retroactive so they do not apply to outstanding ABS, but instead should allow industry participants to gauge the rule’s impact and proceed accordingly.

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Monday, October 20

I was reminded this week that Halloween is only a few days away, and we need to start to prepare at our house. As most of you probably know, my daughter got married a few years ago on Halloween because it is her favorite holiday. So, we are starting to decorate for this great day … are you?
I want to thank all of you out there who have sent me a referral in the last 30 days. As you know, I can now do loans in all 50 states. So if you have a customer that is moving out of state, or you get a referral from someone out of state and cannot do the loan, please send them to me and I will take care of them. Customer service and helping the customer are my best attributes. E-mail me at namb.ceo@namb.org today.

NAMB+ offers each member discounts on all types of products that can help you in your business. One of these discounts is from Meridian One, and they have a great program for NAMB members. They have a great UPS program that can save you money.
Make the most out of your NAMB membership and take advantage of competitive rates available on shipping services with UPS, including 50 percent off select services for up to four weeks after you enroll.* Whether you need your documents or packages to arrive the next day or are looking for the most affordable shipping option, UPS understands the importance of reliability, speed and cost. See how UPS discounts can help your bottom line:

• Up to 36% on UPS Air letters including UPS Next Day Air 
• Up to 32%
 on UPS Air packages (1 lb.+)
• Up to 34% on UPS International imports and exports 
• Up to 24%
 on UPS Ground shipments

Savings begin at 70% on UPS Freight shipments over 150 lbs. 50% on UPS Next Day Air, UPS Next Day Air Saver, UPS Worldwide Express export, UPS Worldwide Saver export, and UPS Worldwide Expedited export shipments for up to four weeks after you enroll.*

You can receive these discounts even if you already have a UPS account. Remember, the more you ship, the more you can save with UPS. To enroll and start saving immediately, visit www.savewithups.com/namb or call 1-800-MEMBERS (1-800-636-2377), Monday-Friday from 8:00 a.m.-6:00 p.m. EST. Make sure you tell them that you are an NAMB member. Visit www.savewithups.com/namb for specific services and discounts. Introductory Program discounts will be applied to accounts for Week One through Week Four on the UPS Savings Program. Week One includes the date that discounts are applied. Weeks are calculated Sunday through Saturday.
Members should also visit www.NAMBplus.com and see the other programs that are available to members. We have negotiated special programs and discounts for many different companies, so go and spend some time on the Web site and maybe you can start saving money today.
NAMB’s education programs are about to go global. Our current President-Elect Rocke Andrews is also chairman of the Education Committee. He had been contacted by a group of mortgage professionals in Dubai to go there and teach a class to prepare them to take their certification tests for the Certified Residential Mortgage Specialist (CRMS) and Certified Mortgage Consultant (CMC) designations. They are interested in using the NAMB certification program for credibility and professionalism in their mortgage transactions. WOW!
Our Government Affairs Committee Chair Rick Bettencourt was in Iowa this week and it went very well. I would like to request that if your NAMB state affiliate has set the dates for their state conference for 2015, please send it to me so we can advertise it for you on our Web site and we can start making arrangements for either NAMB President John Councilman or myself to attend.
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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We are halfway through October and I’m so happy to say we FINALLY have fall weather. There were sprinkles on my car earlier today. I’m thinking about all things pumpkin now…scones, bread, pie, latte, beer. Speaking of pumpkins, I’m keeping my fingers crossed for the Orange and Black. Just two more games for those rooting for the SF Giants!

Mark your calendars! CAMP’s business building Sales & Marketing Event will be held January 28 to January 30, 2015 in Universal City. This will be one event you will not want to miss. We are working on an amazing agenda for you! I will be sending out more information as it comes up. Keep your eye on the Echo and Facebook for more information.

NAMB is seeking your help so they may tell your story. The CFPB is looking for data from the mortgage industry in order to make favorable adjustments to the stringent regulatory changes that are currently in place. Now is not a time to say, “My voice doesn’t matter.” They need your input in a survey that shouldn’t take more than 5 or 10 minutes of your time. You can estimate your numbers if you cannot remember the exact numbers.  Here is the link:  https://www.surveymonkey.com/s/NAMB_cfpb

The major data points we would like to see are:

  • TOTAL number of Loans closed in YTD.
  • TOTAL Dollar Volume of your loans YTD.
  • TOTAL amount of Mortgage rebates that you gave to the customer to help pay their closing costs YTD. This amount will be the sheet price of the loan, minus your Lender Comp, minus any hits and this would be the net amount that you would have given back to the customer to help pay fees and reduce closing costs.

Each survey participant will receive the video webinar, Getting More Business With Realtors presented by Maximum Acceleration. In addition, Mortgage Educators will be giving away 5 8-hr NMLS classes to be used for 2014 or 2015.

The bottom line is CAMP is working with NAMB to keep the lines of communication open with our regulators. Together we can improve the state of housing and do what is best for the consumer and small business mortgage professionals. It doesn’t matter if you are a mortgage broker or a mortgage banker, CAMP/NAMB is here for you…the mortgage professional.

State Legislative update:

There were several bills that we were watching which have been signed by Governor Brown. It appears that each of these bills will not go into effect until January 1, 2015. Everything else will be quiet on the State legislative front until February of 2015. Here are the bills that were signed into law:

  • AB 1700 Reverse Mortgage Notifications. Requires a 7 day waiting period from the date of counseling before taking an application;
  • AB 1730 Mortgage Loan Modification. Amends existing law prohibiting anyone from collecting fees until the service is completed. Requires civil penalties for any violation and authorizes state and local officials to commence civil action to recover the penalties.
  • AB 2018 Real Estate Fictitious Business names. Authorizes real estate brokers to allow a salesperson to apply for a fictitious business name. This relates to the use of team names.
  • AB 2540 Real Estate Licenses. Authorizes the Real Estate Commissioner to prescribe the format and content of the application for a RE salesperson license. Requires the applicant to provide valid contact information such as email addresses.

SB 1459 Mortgage Loan Originators: Educational requirements. Establishes a requirement of two hours California state specific codes and laws to be included in the initial 20 hours education requirement and one hour of state specific in the mandatory 8 hours of CE. This will move California closer to adopting the UST. There are currently 45 states already participating in the UST.

Upcoming Chapter Events:

Online Training:New CAMP Benefit

Do you hate to sit in an all-day class? Are you too busy to give up just One day of your time? Do you still need your NMLS CE? Check out our new CAMP benefit, Online Training: CAMP members now receive discounted rates for online NMLS training.

Click Here for More Details

Live Chapter Continuing Education:

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

Greater Sacramento Chapter is pleased to be hosting a live 8 hour NMLS class here in the Sacramento area onTuesday, October 28, 2014. We are welcoming back Ginger Bell from Strategic Compliance Partners to teach this class once again. This fulfills the yearly 8 hour continuing education requirement for Mortgage Loan Originators. The price (including lunch) is $99 for CAMP members and $139 for non-members. Please be sure to register ASAP to save your spot. Registration link and additional information here: Click Here

North Bay Chapter will be holding a final NMLS training class on Tuesday, December 2, 2014. This will be held in Petaluma. More details to follow but you can contact Rick Reith at 415-740-8834 for more info.

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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CFPB Provides Guidance on the New Loan Estimate

Posted: 07 Oct 2014 01:35 PM PDT

Marc Patterson

On October 1, 2014, the CFPB staff and Federal Reserve Board co-hosted a webinar that addressed questions about the Final TILA-RESPA Integrated Disclosure Rule that will be effective for applications received by creditors or mortgage brokers on or after August 1, 2015.  The webinar focused on the Loan Estimate and addressed specific questions regarding the content of the Loan Estimate form that relate to corresponding provisions of the Closing Disclosure.   Many of the issues covered were in response to questions received by the CFPB from mortgage industry stakeholders and technology vendors who need additional information in order to facilitate the development of compliance and quality control procedures and software.

The webinar is the third in a planned series to address the new rule.  In the initial webinar, the CFPB staff provided a basic overview of the final rule and new disclosures.  In the second webinar, the CFPB staff focused on core operation issues such as the receipt of an application, assumptions, fee tolerances, record retention, and timing for the initial and revised Loan Estimates.

According to the CFPB staff, this webinar and the ones that will follow will be in the format of a spoken Q&A.  Although the CFPB staff does not plan to issue written Q&A, the staff believes this approach will help facilitate clear guidance on the new rules in an accessible way.  As we have stated before, industry members would prefer formal written guidance.  Among other concerns, the CFPB approach presents challenges to the ability of hearing impaired individuals to benefit from the guidance.

During the webinar the CFPB staff provided a high-level overview of the rule and answered more than thirty technical questions.  Below is a summary of select questions of interest addressed by the CFPB staff.  The topics covered include: (1) brokered transactions, (2) origination charges, (3) calculating cash to close, and (4) the adjustable payment and adjustable interest rate tables.

Q: Does the creditor have to disclose an itemization of the amount financed with the Loan Estimate?

No.  A creditor would not disclose an itemization of the amount financed with the Loan Estimate and Closing Disclosure.    The CFPB also advised that some disclosures are required to be made only on the Closing Disclosure and not the Loan Estimate.  These include some of the fed box disclosures, such as the amount financed and the finance charge.  These disclosures are required to be on the Closing Disclosure pursuant to sections 1026.38(o)(2) and (o)(3), but are not required to be included on the Loan Estimate.  However, note that even for the Closing Disclosure, the amount financed is not itemized.  Section 1026.38(o)(3) requires that only the amount financed itself (which is calculated in accordance with section 1026.18(b)) be disclosed.

Q:  When the sale price of the property is not yet known, does the creditor disclose a label other than “sale price” for the sale price on the Loan Estimate?

No. The label should state the sale price, and the label does not change when the creditor uses an estimated sales price as described in commentary  section 1026.37(a)(7)-1.  For transactions without a seller, such as a refinance, because there is no sale, the estimated value of the property is disclosed in place of the sales price, and labeled “property value” with “property” abbreviated as “prop.”

Q:  If a broker is issuing a Loan Estimate but does not know the creditor, may the broker put its name on the form in place of the creditor’s?

 

No.  Section 1026.37(a)(3) requires the name and address of the creditor, and a broker would not place its name and address where the name of the creditor is unknown .  Commentary section 1026.37(a)(3)-2 addresses situations where the mortgage broker is making the disclosure and the creditor has not yet been determined.  The comment provides that the broker must make a good faith estimate to disclose the name of the creditor, but when the name of the creditor is not known at the time the Loan Estimate is required to be delivered or placed in the mail, the mortgage broker may leave the creditor’s name blank.  This does not allow the mortgage broker to substitute its name for the creditor’s name.

Q: Section 1026.37(a)(12) indicates that the creditor must disclose a unique loan ID number.  If the creditor is unknown:

(A) Is the broker required to generate and disclose a unique ID number?

No.  A broker would not be required to generate and disclose its own unique loan ID in a Loan Estimate, and assuming the creditor’s unique ID is not available to the broker, the disclosure may be left blank.   The loan ID number must be a unique identifier that should be determined by the creditor.  However, the rule does not prohibit creditors from outsourcing this function, and creditors could allow brokers to assign and generate unique IDs on their behalf.  Creditors could also provide the unique loan ID to brokers in advance of the disclosures for them to include it on the Loan Estimate.

(B) Is the creditor required to disclose its own unique loan ID once there is a creditor for the loan?

Yes.  The creditor is required to include a unique loan ID on any subsequent disclosures it provides, such as revised Loan Estimates or the Closing Disclosure.  The creditor is ultimately responsible for the disclosures and that includes providing its own unique loan ID.

Q: If a creditor charges an origination fee that is a percentage of the loan amount, but it is not a “point paid to the creditor to reduce the interest rate,” may the creditor identify it as a point in some way to preserve its tax deductibility for the consumer? 

No.  Section 1026.37(f)(1)(i) provides that only points paid to the creditor to reduce the interest rate may be labeled as points.  The Loan Estimate form is meant to provide accurate disclosures to consumers, not to document eligibility for tax benefits or other purposes.

Q:  Can the alternative cash to close table be used for multiple loan transactions without a seller? 

Yes.  The alternative table can be used where there are multiple loan transactions without a seller.  To the extent there are multiple transactions, each loan covered by the rule will have a separate Loan Estimate and Closing Disclosure.  At consummation, each Closing Disclosure will indicate the cash due to or from the consumer for each loan.  In the rare scenario, involving a cash out refinance and a subordinate lien consummating at the same time, the settlement agent can total the cash due to and the cash due from the consumer across all of the loans to determine the final amount that is payable to or due from the consumer.  This is a change from the existing use of the HUD-1-A form.

Q: Are the adjustable payments and adjustable interest tables disclosed for a fixed rate loan?

The adjustable payments table (APT) is used only when there are adjustable payment features.  If there are no such features in the legal obligation the APT table is not disclosed.  Accordingly, the APT table will only be disclosed if the fixed rate loan has adjustable payment features.  The adjustable interest rate (AIR) table is only disclosed when interest rates can change, which would be contrary to the definition of a fixed rate loan.  Therefore, the AIR table should never be disclosed with a fixed rate loan.

Q:  Does the creditor need to disclose on the Loan Estimate that it will transfer servicing if the transfer is not immediate, but will happen at some later point in time during the life of the loan? 

Yes.  The creditor must disclose on the Loan Estimate that it will transfer servicing if the creditor’s intent at the time the Loan Estimate is issued is to transfer servicing at some point during the life of the loan.  Section 1026.37(m)(6) requires disclosure of a statement of when the creditor intends to service the loan or transfer the loan to another servicer.  This means that a creditor is required to disclose whether it intends to service the loan directly or transfer servicing to another servicer at any time after consummation.  A creditor complies with the rule if the disclosure reflects the creditor’s intent at the time the Loan Estimate is issued.

Q:  Does the creditor need to disclose on the Loan Estimate that it will transfer servicing if the transfer is to the creditor’s subsidiary or affiliate?

Yes.  The creditor must disclose that it will transfer servicing, even if the transfer will be to a subsidiary or affiliate, if that is the creditor’s intent at the time the Loan Estimate is issued.  As with the previous question, Section 1026.37(m)(6) requires a creditor to disclose a statement of whether the creditor intends to service the loan directly or transfer servicing to another servicer.  A creditor’s subsidiary or affiliate is another servicer for the purposes of this requirement if it is a person responsible for receiving scheduled periodic payments from a borrower.

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Happy Columbus Day!
Just when you think that the week is going to be slow, everything starts to happen. To me, some of the best information this week is that Fleetwood Mac is going on tour with all of the original members of the band back together. I cannot wait to see

how close they are going to come to Indianapolis so I can get my tickets. This was one of the bands I listened to growing up, so this is kind of special to me.
I was very excited to attend the first committee meeting of the Equal Opportunity Committee this week. Chairwoman Wendy Bernard has put together a very dynamic group of people for this committee, and they are putting a very intensive agenda for them to achieve this year. This is going to be a very interesting committee, and I want to thank them for allowing me to tag along.

To all members, make sure that you are going into your NAMB membership and updating your e-mail and mailing address. I have received several upset e-mails stating that they stopped getting NAMB information and my Monday Morning Messenger only to find out that they changed companies, moved or have changed their e-mails and we did not have their current address. It is YOUR responsibility to keep this updated with your current information. And while you are at it, go check out the NAMB+ Web site and see what membership benefits you can get. Log on to www.NAMBPLUS.comtoday.
This week, Rick Bettencourt, the current Government Affairs Chair will be going to Iowa for the Mortgage Professionals of Iowa Annual Convention. Rick will be talking about what the GA Committee is doing to gather information for our presentation to the Consumer Financial Protection Bureau (CFPB). Go towww.surveymonkey.com/s/NAMB_cfpb and take the survey for us and for all of you. This is very important, and we need everyone to complete this. The CFPB wants to get 5,000 responses and we do too. Please do your part today. Don’t wait. Do it today!
And one final note about the Lending Integrity Seal of Approval. There has been some discussion as to why are we pushing this so much each and every week. Well, I had a discussion with a reporter and he ran an article about NAMB’s Lending Integrity Seal and the response that he got was really interesting. He said that the feedback was asking how do they locate these lending professionals. He directed them to the Lending Integrity Web site to locate these individuals. He said that he interviewed a few of these Lending Integrity Professionals in his area and found that it was something prestigious for them to have and they had customers calling them and asking if they had the Seal. I am sure that is really a plus.
So don’t delay … if you are a mortgage originator, have an NMLS number and are a member of NAMB, go and sign up today. Go to www.NAMB.org and become a member and you will be eligible to sign of for the Lending Integrity Seal of Approval.
This week looks like a busy week again.

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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