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NMLS will be migrated to a new data center over the weekend of May 19-20, 2012.

Due to the migration, the NMLS will shut down early at 9:00 pm Eastern Time on May 18, 2012.

Although we do not anticipate any issues for most users after the migration, some organizations may experience connectivity issues because of their internal data security policies. To address some of these potential issues, NMLS offers the following recommendations.

Firewall
Some organizations may need to specify NMLS destination “IP addresses” explicitly in their firewall rules in order to enable access to the new NMLS data center addresses. We recommend that organizations add the new IP address ranges to the ones currently in place in order to support connectivity to both the old and new data centers through the migration period.

If your organization requires the explicit firewall permissions to enable Internet connectivity, you should configure firewall access to permit both HTTP and HTTPS (TCP ports 80 and 443) connections to the new NMLS network using the following destination subnet:       New Data Center: 75.98.60.0/23

Verifying Connectivity – Strongly Recommended
Effective immediately, organizations can verify connectivity to the new NMLS data center in advance of the migration by connecting to the appropriate IP address for the various NMLS applications, as listed below. If your firewall rules allow access to the new data center, you will see a verification message displayed on a splash screen. If not, the generic “The page cannot be displayed” message will be displayed.

 

May 15, 2012

New York Times: Needy States Use Housing Aid Cash to Plug Budgets

By SHAILA DEWAN

Hundreds of millions of dollars meant to provide a little relief to the nation’s struggling homeowners is being diverted to plug state budget gaps.

In a budget proposed this week, California joined more than a dozen states that want to help close gaping shortfalls using money paid by the nation’s biggest banks and earmarked for foreclosure prevention, investigations of financial fraud and blunting the ill effects of the housing crisis. California was awarded more than $400 million from the banks, and Gov. Jerry Brown has proposed using the bulk of that sum to pay the state’s debts.

The money was part of a national settlement valued at $25 billion and negotiated with five big banks over abuses in their mortgage and foreclosure processes.

The settlement, reached in February after a year of talks and intervention by the Obama administration, was the second-largest in history involving the states, trailing the tobacco industry settlement, and represented the first large-scale commitment by banks to provide direct aid to borrowers.

As part of the settlement, the banks agreed to pay the states $2.5 billion, money intended to help homeowners and mitigate the effects of the foreclosure surge. But critics complained that this was the only cash the banks were required to pay — the rest comes in the form of “credits” for reducing mortgage debt and other activities. Even that relatively small amount has proved too great a temptation for lawmakers.

Only 27 states have devoted all their funds from the banks to housing programs, according to a report by Enterprise Community Partners, a national affordable housing group. So far about 15 states have said they will use all or most of the money for other purposes.

In Texas, $125 million went straight to the general fund. Missouri will use its $40 million to soften cuts to higher education. Indiana is spending more than half its allotment to pay energy bills for low-income families, while Virginia will use most of its $67 million to help revenue-starved local governments.

Like California, some other states with outsize problems from the housing bust are spending the money for something other than homeowner relief. Georgia, where home prices are still falling, will use its $99 million to lure companies to the state.

“The governor has decided to use the discretionary money for economic development,” said a spokesman for Nathan Deal, Georgia’s governor, a Republican. “He believes that the best way to prevent foreclosures amongst honest homeowners who have experienced hard times is to create jobs here in our state.”

Andy Schneggenburger, the executive director of the Atlanta Housing Association of Neighborhood-Based Developers, said the decision showed “a real lack of comprehension of the depths of the foreclosure problem.”

The $2.5 billion was intended to be under the control of the state attorneys general, who negotiated the settlement with the five banks — Bank of America, Wells Fargo, JPMorgan Chase, Citigroup and Ally. But there is enough wiggle room in the agreement, as well as in separate terms agreed to by each state, to give legislatures and governors wide latitude. The money can, for example, be counted as a “civil penalty” won by the state, and some leaders have argued that states are entitled to the money because the housing crash decimated tax collections.

Shaun Donovan, the federal housing secretary, has been privately urging state officials to spend the money as intended. “Other uses fail to capitalize on the opportunities presented by the settlement to bring real, concerted relief to homeowners and the communities in which they live,” he said Tuesday.

Some attorneys general have complied quietly with requests to repurpose the money, while others have protested. Lisa Madigan, the Democratic attorney general of Illinois, said she would oppose any effort to divert the funds. Tom Horne, the Republican attorney general of Arizona, said he disagreed with the state’s move to take about half its $97 million, which officials initially said was needed for prisons.

But Mr. Horne said he would not oppose the shift because the governor and the Legislature had authority over budgetary matters. The Arizona Center for Law in the Public Interest has said it will sue to stop Mr. Horne from transferring the money.

In California, Attorney General Kamala D. Harris had played hardball in the settlement negotiations, holding out until the very end for a deal guaranteeing that a large share of the benefits would go to California, and then trumpeting her success in a news conference and a flurry of interviews with national news outlets. So Mr. Brown’s revised budget put her in an awkward position.

“While the state is undeniably facing a difficult budget gap,” she said in a statement, “these funds should be used to help Californians stay in their homes.” Both officials are Democrats.

When asked if Mr. Brown could legally appropriate the money, which is supposed to be held in a special fund “for the benefit of California homeowners affected by the mortgage/foreclosure crisis,” a spokesman for Ms. Harris declined to comment.

Just last week, Ms. Harris announced plans to give about half the money to groups that provide housing counseling and legal assistance to homeowners — groups whose budgets have shrunk while demand for their services grows. The other half would be used primarily for investigation of mortgage-related crime.

 

States using some or all of their money for housing have designated it for a wide variety of programs, like a small fund for low-interest loans to build housing in low-income neighborhoods, in Virginia, and Ohio’s sweeping plan to demolish abandoned property.

 

In New York, Attorney General Eric T. Schneiderman stepped in with $15 million in settlement money for housing counseling and legal assistance when state support ran out last month, and plans to spend the bulk of its $130 million on similar programs. North Dakota will use its tiny allotment, $1.9 million, to provide housing to police officers and emergency responders in its booming oil-field counties, where shelter is scarce.

Using the money for other purposes is shortsighted, housing advocates warn. “If you leave homeowners hanging out there to dry, then in the short term maybe you help to meet the budget gap this year,” said Maeve Elise Brown, the executive director of Housing and Economic Rights Advocates, based in Oakland. “But in the long term the more people we have going through foreclosure, the worse it’s going to be for our economy as a whole.”

In some states, redirecting the money could have a racially discriminatory effect, said Alan Jenkins, the executive director of the Opportunity Agenda, which supports homeownership, because in some cities black homeowners disproportionately lost their homes, Mr. Jenkins said.

“If you dump all of these funds into the general coffers, the African-American homeowners are not going to benefit in any real way because they represent such a small percentage of the larger state,” Mr. Jenkins said.

Robbie Brown contributed reporting.

 

 

FHFA Unveils Changes to Reform Plan for Secondary Market

Ally Financial will look to sell off the rest of its mortgage business after bankruptcy concludes for its independent subsidiary Residential Capital.

In a conference call with investors Tuesday, Ally executives said they plan to sell an additional $1.3 billion in mortgage servicing rights owned by Ally Bank as part of the wind down.

“You can live in your car if you don’t pay your mortgage,” said Ally CEO Michael Carpenter. “I don’t mean to be cute, but the fact is people make their car payment before they pay their mortgage.”

Obama Administration Pushes for New Refinance Expansions

By: Ryan Schuette 

NAMB Call to Action:

CFPB Proposals Will Impact You…

LO Comp? Flat Fees? Point Banks?

By now, I am sure you have already heard the news regarding the CFPB’s latest proposals, especially regarding flat fee compensation instead of origination fees tied to a loan amont. (Read the NY Times article here).

What you probably have not read is the actual Small Business Review Panel Outline of Proposals and Alternatives. This is where NAMB needs your help. Please read the proposals and discussion questions and send us your feedback. If you care about your industry and livelihood, then you will help us formulate responses to work with the CFPB to promote consumer choice and protection withour destroying small business and competitive fair markets.

Your NAMB volunteers continue to fight the good fight, stay the course, and keep the faith. However, we cannot do this alone. We need more than a few thousand of the hundred thousand MLO’s to participate.

Here are the proposals:

Latest CFPB Proposals for Small Business Panel

Questions for Small Business Panel

Now, give us your feedback. Please email us at governmentaffairs@namb.org.

May 9, 2012

CONTACT:

Office of Public Affairs

Tel:      (202) 435-7170

 CONSUMER FINANCIAL PROTECTION BUREAU CONSIDERS RULES TO SIMPLIFY MORTGAGE POINTS AND FEES

Rules Would Bring Greater Transparency to the Mortgage Market

 WASHINGTON, D.C. — Today, the Consumer Financial Protection Bureau (CFPB) outlined rules it is considering that would simplify mortgage points and fees and bring greater transparency to the mortgage loan origination market. These rules, which the CFPB expects to propose this summer and finalize by January 2013, would make it easier for consumers to understand mortgage costs and compare loans so they can choose the best deal.

“Mortgages today often come with so many different types of fees and points that it can be hard to compare offers,” said CFPB Director Richard Cordray. “We want to bring greater transparency to the market so consumers can clearly see their options and choose the loan that is right for them.”

The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) places certain restrictions on the points and fees offered with most mortgages. The CFPB is considering proposals that would:

•  Require an Interest-Rate Reduction When Consumers Elect to Pay Discount Points: Discount points are a fee, expressed as a percentage of the loan amount, to be paid by the consumer to the creditor at the time of loan origination in return for a lower interest rate. Discount points can benefit consumers by allowing them to reduce their monthly loan payments. The CFPB is considering proposals to require that any discount point must be “bona fide,” which means that consumers must receive at least a certain minimum reduction of the interest rate in return for paying the point.

•  Require Lenders to Offer Consumers a No-Discount-Point Loan Option: It is often difficult for consumers to compare loan offers that have different combinations of points, fees, and interest rates. Under the proposal the CFPB is considering, consumers must also be offered a no-discount-point loan. This would enable the homebuyer to better compare competing offers from different lenders.

•  Ban Origination Charges that Vary with the Size of the Loan: Brokerage firms and creditors would no longer be allowed to charge origination fees that vary with the size of the loan. These “origination points” are easily confused with discount points. Instead, under the rules the CFPB is considering, brokerage firms and creditors would be allowed to charge only flat origination fees.

In addition to regulating origination points and fees, the proposals the CFPB is considering would also address mortgage loan originators’ qualifications and compensation. Mortgage loan originators, who take mortgage loan applications from consumers seeking to buy a home or refinance a mortgage, include mortgage brokers and loan officers. The rules the CFPB is considering would:

•  Set Qualification and Screening Standards:Under state law and the federal Secure and Fair Enforcement Act, loan originators currently have to meet different sets of standards, depending on whether they work for a bank, thrift, mortgage brokerage, or nonprofit organization. The CFPB is considering rules to implement Dodd-Frank requirements that all loan originators be qualified. The proposal would help level the playing field for different types of loan originators so consumers could be confident that originators are ethical and knowledgeable:

• • Character and Fitness Requirements: All loan originators would be subject to the same standards for character, fitness, and financial responsibility;
  • Criminal Background Checks: Loan originations would be screened for felony convictions; and
  • Training Requirements: Loan originators would be required to undertake training to ensure they have the knowledge necessary for the types of loans they originate.

•  Prohibit Paying Steering Incentives to Mortgage Loan Originators: In 2010, the Federal Reserve Board issued a rule that prohibits loan originators from directing consumers into higher priced loans because they could earn more money. The Dodd-Frank Act requires the CFPB to issue rules as well. The proposals the CFPB is considering would reaffirm the Board’s rule, which bans the practice of varying loan originator compensation based on interest rates or certain other loan terms. The CFPB’s proposal would also clarify certain issues in the existing rule that have created industry confusion.

The proposals that the CFPB is considering are designed to preserve consumers’ choices while increasing transparency. In developing a formal proposal, the CFPB plans to engage with consumers and industry, including a Small Business Review Panel that will meet with a group of representatives of the small financial services providers that would be directly affected by the proposals under consideration. The documents that the CFPB will be sharing with these small providers include an overview of the proposals under consideration and a list of questions for input. The small provider representatives will provide feedback to the panel on the proposals the CFPB is considering and suggest alternatives. The Panel will issue a report summarizing this feedback, which the CFPB will consider when formulating the proposed rules.

An overview of the rules under consideration can be found here: http://files.consumerfinance.gov/f/201205_cfpb_MLO_SBREFA_Outline_of_Proposals.pdf

 A list of questions for the Panel’s input can be found here: http://files.consumerfinance.gov/f/201205_cfpb_MLO_SERs_Questions.pdf

 The public can email the CFPB their comments and feedback at MortgageLoanOrigination@cfpb.gov.

The CFPB plans to publish a Notice of Proposed Rulemaking this summer, which will be followed by a formal public comment period. The rules will be finalized by January 21, 2013.

###

 The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit www.ConsumerFinance.gov.

Fred Kreger and Fred Arnold, Branch Managers of American Family Funding discusses the new and improved changes in the mortgage industry. The importance of looking for a qualified, certified Mortgage professional. For question or further information go to the National Association of Mortgage Brokers at www.NAMB.org or www.TheCampsite.org.

By: Ryan Schuette 

Does the Industry, and the Borrower, Need A RP 3.0? Posted by Rob Chrisman

HARP…HARP 2.0…HARP 6.0… will the industry have trouble keeping track of which borrower refinanced under which HARP? The Home Affordable Refinance Program certainly has its proponents, and its critics, along with a fair number of LOs/lenders who are on the fence about it, warily watching what happens.

While the HARP 2.0 program is not even 6 months old, there is already chatter about a “new and improved” policy that could represent a new phase of refinancing-related policy risk.  There have been critics from the start, of course, and this is giving them fodder to ask, “Why didn’t they do it right the first time? What makes us think that this will be the last HARP?” And borrowers, faced with rumors of kinder, gentler HARP, are wondering what is in store for them.

A big factor in the whole process, of course, are the overlays that have been put in place by the aggregators. We know that neither President Obama nor Congress set underwriting guidelines. And FHFA’s Freddie Mac and Fannie Mae may give a program to our lenders, but if the aggregators put on overlays then those lenders who can will go directly to Fannie Mae.

Recently the Senate Banking Committee held a hearing about some of the initiatives highlighted in President Obama’s plan to “Help Responsible Homeowners and Heal the Housing Market.” While there are many facets to the plan, the most recent substantive discussion focused on initiatives to help agency borrowers refinance. Some find it fascinating that, in spite of the government’s apparent desire to extricate itself from supporting the mortgage market, proposals continue to pop up suggesting the exact opposite.

A key part of the discussion focused on examining the Menendez-Boxer discussion draft of the “Responsible Homeowner Refinancing Act of 2012”. What are the HARP enhancements that are being contemplated? Well, the discussion draft has a host of recommended changes to the HARP platform. Generally, they fall along the lines outlined under President Obama’s plan to “Help Responsible Homeowners and Heal the Housing Market.”

On the agency side, the key principals of the plan threefold: to eliminate appraisal costs for all borrowers, increase competition so borrowers get the best possible deal, and extend streamlined refinancing for all GSE borrowers. The Menendez-Boxer discussion draft details how the administration is planning to achieve these aims.

Experts suggest that there are two significant issues that the politicians are looking to address. One is to introduce measures to facilitate cross-servicer refinancing, and the other is to increase the amount of borrowers eligible for the program by reducing eligibility criteria. As best anyone can tell, the key focus seems to be in encouraging cross servicer refinancing – something that the big aggregators have discouraged using LTV overlays and other restrictions to accomplish. As one senior executive at a Top 5 aggregator told me, “None of us want to be financially or legally responsible for someone else’s junk.”

The biggest push seems to be reducing barriers for cross-servicer refinancing to promote competition and lower mortgage rates. There are a couple key ways that the bill proposes to accomplish this. First, Fannie Mae and Freddie Mac would be prohibited from disqualifying or varying borrower eligibility requirements based on LTV, CLTV, employment status, or income. (Currently, borrowers under the manual – same servicer – process qualify for HARP based exclusively on payment history, borrower benefit provisions, and verbal verification of employment. The threshold for cross-servicer refinancing is much higher under the automated underwriting systems.) Lenders using AUS for a cross-servicer HARP refinance are required to collect documentation and borrower credit, are subject to debt-to-income limits within DU/LP, and are subject to different pay history requirements across FNMA and Freddie Mac.

Effectively, as any loan officer or underwriter can tell us, the cross-servicer refinance is much closer to a full underwrite of the loan, while the manual HARP process is closer to a no-underwriting process. Disallowing any variance across same- and cross-servicer refinances in employment status and income eligibility, could ease borrower qualification for cross-servicer refinances and promote competition.

Second, the reps and warrants for cross-servicer refinances would be eased to match those of same-servicer refinancing. Under HARP 2.0, lenders under the manual process are relieved of most reps and warranties on the old and new loan provided that borrowers satisfy payment history requirements and borrower benefit provisions, and have their employment verified verbally. For cross-servicer refinancing, lenders retain significant rep and warranty risk on the new loan. They are responsible for the loan case file being complete, accurate, and not fraudulent. Furthermore, they must comply with the underwriting documentation requirements regarding income, employment, asset, and property fieldwork. If any of these are incomplete, the lenders could be on the hook for reps and warrants on the new loan. And, as mentioned above, who wants to deal with another lender’s junk?

While these rep and warrant issues may sound somewhat mild, those for cross-servicer refinancing under DU and LP are very similar to what existed before HARP 2.0. Generally, there have only been changes to the reps and warrants on property valuation when an AVM is used.   It’s important to note that these issues do present a significant issue for qualifying for loan from a new lender

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