CAMPs REAL TIME LEGISLATIVE INFORMATION UNDER THE DOME

 

NAMB Announces NEW Legislative Action Fund

Will you DONATE $25, $50 or $100 TODAY?

Click Here To Watch Video About The New Fund  

Click Here to Contribute to the NAMB Legislative Action Fund

 

NAMB’s Government Affairs team continues to fight for the interests of consumers and mortgage professionals by exhausting every possible avenue to make improvements to rules and regulations that are negatively impacting our industry and our customers.

With the launch of this new initiative, NAMB is asking for your help to bolster the Association’s Government Affairs activities and ensure that NAMB maintains its stature and position in Washington, D.C. as the national voice of the mortgage professional.

  • What is it?
    • The NAMB Legislative Action Fund (“LAF”).
    • A new initiative to help bolster and direct additional financial support to NAMB’s Government Affairs activities.
    • The NAMB Board decided to launch the LAF in response to many requests from mortgage professionals across the country looking for a way to help directly support NAMB’s Government Affairs efforts.

  • How is the LAF different from NAMBPAC?
    • NAMBPAC is NAMB’s Political Action Committee.
    • Contributions to NAMBPAC are used to directly support the election of Members of Congress who support a strong mortgage market, fair competition and meaningful consumer protection.
    • Unlike NAMBPAC, where only personal funds can be contributed, both personal and corporate funds may be used when contributing to the LAF.
    • Additionally, there are no limits on the amount that anyone can contribute to the LAF.
  • How will NAMB use funds contributed to the LAF?
    • Contributions to the NAMB LAF will provide much-needed additional financial support for NAMB’s Government Affairs efforts.
    • These contributions will not be used to contribute to political campaigns.
      • If you are a NAMB Member and would like your contribution to be used to help a political campaign, you will need to contribute to NAMBPAC.
  • Why should you contribute to the LAF?
    • NAMB remains the recognized and respected voice of mortgage professionals in Washington, D.C.
    • NAMB is the only national organization specifically looking out for the unique needs and interests of small business mortgage professionals and the consumers we serve.
    • The federal government has assumed unprecedented regulatory oversight of our profession, and both Congress and the CFPB continue to have a huge impact on our businesses.
    • NAMB must double-down on our Government Affairs efforts to maintain our critical seat at the table and continue fighting to protect our businesses and our consumers.
    • Millions of dollars are spent by countless organizations working against you and your interests.  NAMB needs your support to make sure we can remain effective and continue to help you and your business succeed.
  • How can you contribute?
    • Make a one-time or monthly recurring credit card contribution today by clicking here.

* Contributions to the NAMB Legislative Action Fund will not be used to contribute to any political campaign.  

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Letters cite health of MMIF as reason for lowering fees

Ben Lane
December 18, 2014

A group of 18 U.S. Senators and the Mortgage Bankers Association both sent letters to the U.S. Department of Housing and Urban Development on Thursday, stating that the time has come for the Federal Housing Administration to lower its mortgage insurance premiums.

In two separate letters both addressed to HUD Secretary Juliàn Castro, the group of senators and the MBA both cited the improved financial health of the Mutual Mortgage Insurance Fund as the main reason why the FHA should reexamine its mortgage insurance fees immediately.

In the FHA’s actuarial report on the MMIF, the agency declared that there had been a $21 billion improvement since late 2012, when the agency implemented a series of financing changes.

Senators Barbar Boxer (D-CA), Robert Menendez (D-NJ), Charles E. Schumer (D-NY), Jeff Merkley (D-OR), Elizabeth Warren (D-MA), Barbara Mikulski (D-MD), Dianne Feinstein (D-CA), Patty Murray (D-WA), Richard Durbin (D-IL), Ben Cardin (D-MD), Bernie Sanders (I-VT), Jeanne Shaheen (D-NH), Kirsten Gillibrand (D-NY), Richard Blumenthal (D-CT), Chris Murphy (D-CT), Mazie Hirono (D-HI), Edward Markey (D-MA) and Cory Booker (D-NJ) asked Castro to ensure that the fees on FHA loans are “priced appropriately” to both cover expected losses and serve the agency’s stated mission of helping Americans achieve homeownership.

“With the improved outlook of the MMIF, we believe now is an appropriate time for the FHA to reexamine its premium levels to determine whether they can be reasonably and safely lowered,” the Senators wrote in the letter.

“While preserving the solid footing of the reserve fund is essential, reducing fees does not necessarily conflict with this goal,” the Senators continued. “As any business knows, just as a price that is set too high will lead to less profit, not more, lowering the premium on qualified borrowers may actually produce greater revenue and fully restore the capital ratio more quickly.”

The MMI Fund, which handles single-family programs, gained almost $6 billion in value in the past 12 months, printing now at $4.8 billion. Last year it fell short by more than $1.3 billion.

But the Senators said that because the MMIF has improved to a “positive” economic value, now is the time to examine FHA’s mortgage insurance premiums.

“The improved financial health of the MMIF has been achieved in part by raising the premiums borrowers pay for the FHA guaranty,” the Senators said. “While the increase in fees may have helped to cover losses incurred as a result of the financial crisis, it also came at a cost to new borrowers and to the FHA’s mission to expand affordable homeownership opportunities.”

The letter states that the FHA has raised its annual premium 145% since 2010, which means that a borrower with a $200,000 loan must now be able to pay $1,600 more per year in fees.

While preserving the solid footing of the reserve fund is essential, reducing fees does not necessarily conflict with this goal,” the Senators said. “As any business knows, just as a price that is set too high will lead to less profit, not more, lowering the premium on qualified borrowers may actually produce greater revenue and fully restore the capital ratio more quickly.”

According to the Senators’ letter, the FHA now has more than enough money in the MMIF to cover all expected insurance claims over the next 30 years.

“Maximizing profit, however, should not be the only driver in determining the appropriate fee level on FHA loans,” the Senators said. “While premiums must be sufficient to cover expected losses and achieve a 2% excess reserve, the FHA guarantee should also be priced appropriately to serve the agency’s mission and provide a path to homeownership for the many creditworthy families still unable to obtain affordable financing through the private market.”

MBA Chairman Bill Cosgrove also directed a letter to Castro, saying that the FHA’s insurance premiums have directly impacted the ability of first time homebuyers to attain an FHA mortgage, reducing support for this segment of the market.

“We recognize the need for FHA to be on a sound financial footing so that it can support its mission of providing financing to first-time homebuyers and other underserved borrowers,” Cosgrove said in his letter.

“At this time, however, MBA thinks mortgage insurance premiums are counterproductively high and recommends that they be reduced to better serve borrowers and meet FHA’s stated policy objectives.”

In his letter, Cosgrove said that there is long lag time before pricing and underwriting changes show up in the performance of the fund. “For this reason, it is important to anticipate the impact of current pricing and underwriting standards on the future performance of the MMIF,” Cosgrove said. “We think it is important for HUD to take steps now to restructure and reduce FHA’s premiums in ways that also support long-term actuarial soundness.”

Earlier in the year, the National Association of Realtors also sent a letter to HUD requesting a decrease in the MI fees.“I am writing on behalf of the one million members of the NAR with concerns about the FHA’s high annual mortgage insurance premiums and mortgage insurance that is required for the life of the loan,” NAR President Steve Brown said at the time. “Home purchases are becoming increasingly out of reach for many qualified borrowers who rely on FHA financing.”

But those pleas fell of deaf ears. Shortly after NAR sent its letter, then FHA Commissioner Carol Galante said that the FHA was not planning to reduce its rates. But she acknowledged that the increases may have reached a “tipping point” that could drive buyers away.

“We’re reaching a tipping point where we believe that further increases would reduce access to credit,” Galante said in April. “However, now is not the time to roll those premiums back. Right now we are priced appropriately and are reaching out to creditworthy individuals.”

Industry analysts said that despite the increased health of the MMIF, changes in the FHA mortgage insurance premiums were unlikely in 2015, but perhaps pressure from the Senators and the MBA will be enough to gain some traction with HUD and the FHA.

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Thursday & Friday
January 29 & 30
CAMP Sales & Marketing

 

Universal City, California

CARL WHITE

Carl White explores priorities and focus needed within the mortgage profession. 


Carl looks at “problems” in different ways, finding very meaningful solutions. He will make you a better leader in your mortgage business.

 

 

The 2015 Sales & Marketing Conference showcases the products, companies, and networking that is necessary to succeed in today’s mortgage industry.

Know your options.  Know CAMP.  Only $99.

 


 

 

EVENT DETAILS
Full Program
Only $189 for Two Days

 

Learn step-by-step loan product options, networking and marketing skills.  A full program also includes access to the EXPO and a day of CAMP’s Compliance Workshop.

CAMP Special 
$169 Room Rate

Hilton LA/Universal City

555 Universal Hollywood Dr.

Universal City, CA 91608

Phone: (800) 445-8667

Exhibitor & Sponsorship 
Opportunities 
Plug into a thriving mortgage professional culture.  Show us your new products.  Show us our options.  CAMP attendees are moving the business forward – do not miss this opportunity to expand the horizons in California.

STAY CONNECTED
Facebook    Twitter    LinkedIn    Pinterest
Forward this email

California Association of Mortgage Professionals | 1022 G Street | Sacramento | CA | 95814

 

 

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Wednesday, December 17, 2014

Today marks the day that many Jewish communities in the United States observe the first day of Hanukkah, also known as Chanukah or Festival of Lights. Hanukkah is an eight-day Jewish observance that remembers the Jewish people’s struggle for religious freedom. As we enter into December, we wish everyone a happy holiday in order to be politically correct. But I would like to wish a happy Hanukkah to those who celebrate this holiday.

NMLS Renewal Update

Many of us are done for the year but many of us are still very busy with new loans. Sometimes we let the little things slip through our fingers. I know I mentioned this before but I want to put this out again. Have you renewed your NMLS license for 2015? The NMLS is quoting 2 weeks at this point so if you haven’t done so, get it done today! Remember, if your license is not approved by December 31, 2014, you cannot originate until it becomes approved.

CAMP ONLINE NMLS TRAINING

High Balance Limits

DU and LP have already increased their High Balance limits in certain counties. What does that mean to you? You can run the AUS now but the loan must fund on or after January 1, 2015. The counties that were affected are:

Monterey Countyfrom $483,000 to $502,550

Napa Countyfrom $592,250 to $615,250

San Diego Countyfrom $546,250 to $562,350

Ventura Countyfrom $598,000 to $603,750

NAMB Survey

Are you hoping that the CFPB would loosen up on some of their regulations? Have you complained about a loan you couldn’t do because of the new guidelines? 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.

CAMP Membership Benefit Highlight

In 2012, Lehman Brothers Holdings was assigned all rights, title and interest to all First Magnus broker agreements. This includes funding loans by Aurora Loan Services, Lehman Brokers Bank, or Lehman Brothers Holdings. Since that time, they have been actively pursuing collection efforts for loans originated from January 1, 2005 through September 17, 2007.  Have you received a demand notice for buyback from Lehman Brothers? There are about 3,000 lenders and brokers that are currently being pursued by Lehman Brothers through Bankruptcy court. You may have a viable defense.  Contact Herman Thordsen or Jozef Magyar at 888-667-8529 for a free consultation.

CAMP Sales & Marketing 

The 2015 Sales & Marketing Conference showcases the products, companies, marketing, and networking that is necessary to succeed in today’s mortgage industry.  Click here to check out the event details.

CAMP Sales & Marketing

January 29-30, 2015 I Universal City, California

You don’t want to miss our Silver Anniversary next year. The 2015 Sales and Marketing Conference will be a must attend event! We are finalizing the program but I can tell you, the line of speakers is fabulous. The event is January 29-30, 2015 in Universal City, California. You can click the link below for event information and registration.

Click Here for Event Information

CAMP Member Online Training

Receive Great Membership Discounts!

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

Upcoming Chapter Events:

TODAY!

Mark your calendars, San Francisco Peninsula CAMP is hosting their holiday party on Wednesday, December 17, 2014 at Dominic’s @ Oyster Point, 360 Oyster Point Blvd, South San Francisco, CA. Contact Susan Moore Susan.Moore@lhfs.com to RSVP or 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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Speaker at Business Conference and Presentation. Audience at the conference hall.
How-To Loan Presentations

 

It is not just talk.  We show you the steps.

 

CAMP Sales & Marketing Conference
Thursday, January 29, 2015  I  Universal City, California

 

Rock the Reverse World I Don Currie 9:00 – 9:45 am
Learn the reverse mortgage programs including purchase and jumbo – program changes highlighted.  Don will walk you through the effective marketing techniques and where to receive free marketing support.  This program is for professionals with and without experience in the reverse world.

Your Blueprint to Rehab & 203k Ragen Cunningham 10:15 – 11:00 am

Ragen Cunningham is an expert in rehabilitation and 203k loans.  You will leave Ragen’s presentation knowing which options are available to your clients and how to them a reality.

VA Loans Ken Bates 11:30 am – 12:30 pm

After Ken’s 12 years of active duty, his naval career landed their family in San Diego where he and his wife, Karen Bates, found their life’s passion: helping other military families use their VA benefits to purchase one of the biggest pieces of the American dream – their own home.  Ken will be your guide to creating a successful VA purchase.

Full Program 
Only $189 for Two Day

Learn step-by-step loan product options, networking and marketing skills.  A full program also includes access to the EXPO and a day of CAMP’s Compliance Workshop.  Register.

CAMP Special 
$169 Room Rate

Hilton LA/Universal City

555 Universal Hollywood Dr.

Universal City, CA 91608

Phone: (800) 445-8667

Book Now.

Exhibitor & Sponsorship 
Opportunities

Plug into a thriving mortgage professional culture.  Show us your new products.  Show us our options.  CAMP attendees are moving the business forward – do not miss this opportunity to expand the horizons in California. Learn more.

Stay Connected
Facebook   Twitter
1022 G Street, Sacramento, California 95814  I  916-448-8236
California Association of Mortgage Professionals | 1022 G Street | Sacramento | CA | 95814

 

 

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Monday, December 15

Are you a volunteer? I mean are you a true volunteer? The reason I am asking this question is that I had a true reality check this past week on truly being a volunteer. Not just someone who says that they will help or someone who says, “Call me if you need someone” volunteer. Do you really put yourself out there to be a volunteer?
I am sure that you all know I am one of the truly many people that volunteer my time and efforts to NAMB—The Association of Mortgage Professionals, and anything that I can do to help, I am there. I have discussed in this column that my father believed you MUST volunteer and pay back some of your life to your profession, and I have really taken this message seriously. I am not patting myself on the back, but you all know my record at NAMB. When the opportunity came to serve my association at the state level, I jumped right in and the feeling I had was great that I could help. Then, the chance to become involved nationally arose, and I jumped in with both feet. And after being NAMB president, I jumped right back in as your CEO.

But this week, I felt that what I have done is miniscule to what my sister had accomplished, and it is not about money, or talking about it. She lived it every day and asked for nothing in return … NOTHING!
This past week, I had the distinct honor to be the big brother, along with my twin brother Jim, and my baby sister Sandy, as we planned for our sister Carole’s funeral. She was too young at the age of 59, and she was not sick with any sort of bad disease. She had a blood clot that went to her lung. It was an honor, but a real wake-up call. She was a single woman who worked for the City of Dayton Municipal Courts as a bailiff. She was there for 25-plus years. Before that, she worked for Chase Bank in the vault department. She didn’t have a hard job, but she had an important job. Every jury duty letter that went out to the citizens in Dayton, Ohio had her name on it. When people would walk in her door looking for whatever, she helped them. Depending on what some of the judges wanted, she was there. But it is what she did before and after work that really opened my eyes. She was a full-time aunt to five nieces and one nephew. And when these nieces and nephews got married, she jumped into their new lives with both feet as well. As their aunts, Carole and Sandy, rewarded each of these nieces and nephews with a trip to wherever they wanted to go in the United States when they turned 13, it was their gift to them for becoming a teenager. Family was number one on their list. They weren’t always perfect, but they loved being involved.
So as we were putting together her obituary, I found out that she was the current president of the BEHCC (the local community council in Dayton, Ohio), where she had given service for almost 30 years. She was a member of the Southeast Dayton Priority Board (a county-wide elected position) for 30 years, and an instrumental member of the Belmont Historical Society, which she kept active when they were about to shut down several years ago. She was also a graduate of the City of Dayton Neighborhood Leadership Institute and an active member of the Dayton Dragons Baseball Friends Booster Club. In the past, she also was involved in the Dayton Dynamo Soccer Booster Club.
Nine years ago, she asked my opinion if a 50-year-old woman should go back to college and get her business degree. I told her it was a matter that she had to feel good about it as it would not be easy. I urged her to do it and reach for the stars. She enrolled and completed her degree from Ohio Dominican College in 2009. Most of her classmates were less than half her age at the time of graduation, but she did it and graduated CUM LAUDE. We were all proud of her.
In her spare time, she found a love for making rosaries and jewelry, at which she then gave pieces that she made to family and extended family. The pieces that she made were special to each person. She gave my wife a necklace that reflected my love for giraffes and it was perfect. When she had friends who were laid up with medical issues, she went to their home and cooked them food. She was always there if someone needed something. She single-handedly took charge of putting together our large family reunions every other year, and I have to admit, we had a lot of people attend these events from all over the Midwest. She also found time to join a card club with friends.
She and my sister had season tickets to the Dayton Dragons Baseball Team (the Single A affiliate of the Cincinnati Reds) and was a member of the Dragons Booster Club. This Booster Club would travel with the team and would make cookies and brownies and such for the players to enjoy while on the road.
She never asked for anything in return. She was just always there if someone or some organization needed her. She was always available to help … to volunteer her time, to give someone the time of day, and treated everyone as though they were the most important person at that time. But what she got in return for her time was the admiration from everyone.
On Tuesday night, we started receiving friends at the funeral home. It started at 3:50 p.m. and we had people lined up to meet the family and pay their respects until well after 8:00 p.m. It was a real situation that she cared about people and that people cared about her in return. Every judge who worked at the municipal court came by and made sure that we knew that she was going to be missed and the court would never be the same without her. Members of all the clubs and organizations she belonged to came by and said that they wished that some people would donate just 25 percent of the time she had given them over the years. She was truly the best at volunteering, a trait taken up where my father had left off. She definitely got the message.
I would be remiss if I didn’t mention that both my brother Jim and my sister Sandy are also involved in a lot of things. It is the “Frommeyer Way.” It is a way of life and we all got it. Carole will always be remembered for that smile and the ability to say, “What can I do to help?”
The moral of this story is that people and organizations need people to join and volunteer. It can be a lot of time or it can be a little time. But, you have to give to receive and that is what is needed to complete you as a human being. You need to volunteer, especially giving back to your profession, to complete your life. Carole lived her life the way she wanted to and it was a full life. I can tell you that she did not leave a stone unturned. She gave 100 percent to everything and they gave back to her. Yes, she will be missed. But best of all, she will always be remembered for answering to call to help. Carole, I will miss you and all of your friends will miss you. But you have shown us the way, yet again! RORO … Rest in Peace.
But now is the time for me to ask myself, “How can I help NAMB, again?” Is there anyone out there who wants to join me?
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 & Friday
January 29 & 30
Universal City, California

Sales & Marketing Conference

The 2015 Sales & Marketing Conference showcases the products, companies, and networking that is necessary to succeed in today’s mortgage industry.

 

Only $189 for two days of jammed-packed quality information that you can actually apply to your business that day!  

 

 

Know your options.  Know CAMP.

 

EVENT DETAILS
Full Program
Only $189 for Two Days

 

Learn step-by-step loan product options, networking and marketing skills.  A full program also includes access to the EXPO and a day of CAMP’s Compliance Workshop.

CAMP Special 
$169 Room Rate

Hilton LA/Universal City

555 Universal Hollywood Dr.

Universal City, CA 91608

Phone: (800) 445-8667

Exhibitor & Sponsorship 
Opportunities 
Plug into a thriving mortgage professional culture.  Show us your new products.  Show us our options.  CAMP attendees are moving the business forward – do not miss this opportunity to expand the horizons in California.

STAY CONNECTED
Facebook    Twitter    LinkedIn    Pinterest
Forward this email
California Association of Mortgage Professionals | 1022 G Street | Sacramento | CA | 95814

 

 

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CONSUMER FINANCIAL PROTECTION BUREAU SPOTLIGHTS CONCERNS WITH MEDICAL DEBT COLLECTION AND REPORTING
CFPB to Require Credit Reporting Agencies to Regularly Report on Consumer Disputes

WASHINGTON, D.C. — Today the Consumer Financial Protection Bureau (CFPB) released a report that found medical debt has a significant impact on consumer credit, as 43 million Americans have overdue medical debt on their credit reports. The CFPB is concerned that the systems for incurring, collecting, and reporting medical debt can create difficult challenges for consumers. To better address these challenges, the CFPB is announcing that the major consumer reporting agencies will be required to provide regular accuracy reports to the Bureau on how disputes from consumers are being handled.

“It’s hard for consumers to navigate the medical debt maze and come out with a clean credit report on the other side,” said CFPB Director Richard Cordray. “The CFPB is taking action to improve credit report accuracy. Getting medical care should not make your credit report sick.”

The medical debt study can be found at: http://files.consumerfinance.gov/f/201412_cfpb_reports_consumer-credit-medical-and-non-medical-collections.pdf

Medical debt is incurred differently than other unpaid bills, such as unpaid phone or utility bills. Medical debt can result from an event that is unpredictable and costly, such as an accident or sudden illness. In addition, consumers are often temporarily responsible for the whole bill until insurance works it out. Consumers can also become responsible for medical debt because of billing issues between medical providers and insurers. Complaints to the CFPB indicate that many consumers do not even know they owe medical debt until they get a call from the collections agency or they discover it on their credit report.

If a medical bill goes unpaid after a certain amount of time, the medical provider may hand over the account to a third-party debt collector. The majority of collections items that end up on consumers’ credit reports are furnished to the credit reporting agencies by third-party debt collectors. When a collection item ends up on a consumer’s credit report, it decreases the consumer’s credit score. These scores play an important role in the lives of American consumers because most lenders decide to grant credit and set interest rates based on them. A collection item generally can stay on a report for up to seven years.

Today’s CFPB study draws on sources such as information from credit reporting companies, consumer complaints to the Bureau, and interviews with debt collection agencies, healthcare providers, and observers of healthcare billing and payment processes. Among the findings:

  • Half of all overdue debt on credit reports is from medical debt: A staggering 52 percent of all debt on credit reports is from medical expenses. When a debt is past due, a collector may report the consumer’s account to a credit reporting agency. On the consumer’s report, this item would appear as an account in collections, resulting in a credit score drop.
  • One out of five credit reports contains overdue medical debt: Today’s study found that one out of five credit reports contain medical debt in collections. This means that 43 million Americans have unpaid medical debt adversely affecting their credit report.
  • 15 million consumers have only medical debt on their credit reports: Seven percent of all consumers have medical debt and no other collection items on their reports. These 15 million consumers tend to be more reliable bill payers than consumers with other types of collections on their credit reports. They are much more likely to be consumers who normally meet their debt obligations.
  • Average reported medical debt is $579: The average unpaid, non-medical collections item on a credit report is $1,000; the median is $366. Unpaid medical collections are smaller, with an average of $579 and a median of $207. These figures contrast with the much larger amounts that are due on credit cards or student loans that are seriously delinquent. Such accounts average several thousand dollars.

Medical Debt Consumer Challenges

While the CFPB has previously reported on the general problems it has found with debt collection and its impact on credit reports, today’s report found that medical debt amplifies many of these issues. The CFPB is concerned the complex processes by which medical bills are incurred, collected by a wide range of debt collectors, and reported to credit reporting agencies can create challenges for consumers. Specifically, these challenges include:

  • Confusing process of incurring medical debt: The medical billing process can be confusing for consumers. From one medical treatment or incident – a trip to the hospital, a treatment for an illness – there can be multiple bills from multiple providers. The costs can depend on whether the consumer has insurance, what insurance covers, and whether the provider is within the insurer’s network. The consumer’s obligation also can vary based upon whether the consumer has reached an annual cap on the amount required to pay out-of-pocket. As a result, consumers might not know how much medical debt they are responsible for paying.
  • Haphazard system for reporting overdue medical debt: Unlike many other industries, there is no standard practice on when overdue medical debt is sent to a debt collector or reported to credit reporting agencies. Consumers may have little insight into how a medical debt might wind up on their credit report. The time between when a provider sends the first bill to a patient and when it ultimately ends up on a credit report can differ dramatically. Some providers send the unpaid bill to a collections agency as soon as 30 days after billing, while other providers may wait up to 180 days. These variations mean that medical debt collection items on a credit report that appear similar can reflect very different things about a borrower’s creditworthiness.
  • Opaque practice of collecting debt by “parking” it on credit reports: It is not uncommon for debt collectors to “park” medical debts on credit reports as a way to get consumers to pay. This means debt collectors may not notify the consumer that they have an overdue debt or give them an opportunity to pay it before it goes on the credit report. Some collectors deploy this tactic to avoid going through the expense or hassle of contacting consumers. Consumers may discover the debt on their reports, worry about it, then contact the collector and pay it. In some cases these debts are paid by insurers once they have processed the claims, but consumers may already have been harmed.

New Accountability for Accurate Credit Reports

Today’s report lays out the ways in which the system of collecting and reporting medical debt introduces multiple points at which error and consumer harm can occur. These errors can also be found in any information source furnished to the credit reporting agencies. A top priority for the CFPB is to hold all players in the credit reporting market accountable for ensuring the accuracy of data in credit reports. This applies to the furnishers of the information, to the credit bureaus, and to the creditors which often both furnish information and use credit reports.

As part of that effort, today the CFPB announced that it will be requiring major credit reporting companies to provide regular accuracy reports to the Bureau as part of ongoing examinations. The reports will highlight key risk areas for consumers, including disputes filed with the credit reporting agencies. Some of the metrics in the accuracy report will include:

  • Furnishers with the most overall disputes: If a credit reporting company continuously experiences an outsized number of consumer disputes about information from a particular furnisher, the CFPB expects the credit reporting agency to investigate, identify if there is a problem, and take appropriate action.
  • Industries with the most disputes: The credit reporting agencies will have to list the top industries they are reporting on, the volume of information received from those industries, and the total number of disputes generated by those industries.
  • Furnishers with particularly high disputes relative to their industry peers: For each industry named, the credit reporting agency must also name the top furnishers with the largest number of consumer disputes.

A sample accuracy report is available at: http://files.consumerfinance.gov/f/201412_cfpb_sample-accuracy-report.pdf

Today the CFPB is also releasing consumer tips on how to deal with medical debt, both before it gets on a credit report and after. The advisory says consumers should ask for an itemized bill and review each item on the bill to see if it is for a service that they received. Consumers should act quickly to resolve or dispute the medical bills that they receive. If consumers need to dispute a bill, they should send a written notice and include a copy of all relevant documents, such as records from doctors’ offices or credit card statements.

The advisory can be found at: http://files.consumerfinance.gov/f/201412_cfpb-7-ways-to-keep-medical-debt-in-check.pdf

In May of this year, the CFPB released a research report that found consumers’ credit scores may be overly penalized for medical debt that goes into collections and shows up on their credit report. According to that study, credit scoring models may underestimate the creditworthiness of consumers who owe medical debt in collections. The scoring models also may not be crediting consumers who repay medical debt that has gone to collections. That report can be found at: http://files.consumerfinance.gov/f/201405_cfpb_report_data-point_medical-debt-credit-scores.pdf

The Bureau’s interactive online tool, Ask CFPB, contains questions and answers related to the topics of debt collection and credit reports. The CFPB accepts consumer complaints about both.

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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 consumerfinance.gov

 

 

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New FHA administrative fee defeated in Congress

CMLA lead opposition to costly 4bp fee on mortgage lenders

Trey Garrison
December 10, 2014

A provision in Senate Bill 2438 that would have allowed the Federal Housing Administration to charge a 4 bp administrative fee has been formally dropped from the Transportation, Housing and Urban Development and Related Agencies Appropriations Act.

The provision contained in the Senate bill would have assessed the fee on lenders, costing $40 for every $100,000 borrowed.

The U.S. Department of Housing and Urban Development had been negotiating to get the proposed hike into the House version of the spending bill, but after the alarm was raised by the Community Mortgage Lenders Association and others it was dropped, HousingWire has confirmed.

“[CMLA] is pleased to have succeeded in blocking additional costs for borrowers seeking FHA-insured mortgages next year and the lenders who will originate those loans. Mid-sized and small community-based lenders help many consumers, particularly first-time buyers, to realize their homeownership aspirations with FHA-insured mortgages,” said CMLA Chair Paulina McGrath said. “The last thing that those consumers, and the lenders who serve them, needed were additional fees that increased the cost of their home loans. We are proud to have taken a principled stand opposing these fees, for the benefit of consumers and the mid-sized and small lenders who serve their financing needs.”

CMLA actively opposed the fee, while other trade associations raised serious concerns about the proposed fees.

“Notably, CMLA was the only association that actively opposed this fee,” said  Glen Corso, executive director for CMLA. “CMLA’s effort was aligned with our mission to exclusively represent small and mid-sized independent and community based lenders.

In a letter to Senate and House appropriators, the Mortgage Bankers Association and a coalition of other trade associations raised concerns about the scope and limits of the fee, and the fact that procedurally, while S. 2438 was approved by the Senate Appropriations Committee, it was never considered by the full Senate.

The CMLA flat-out opposed the fee.

The administrative support fee would have generated an estimated $30 million annually.

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Thursday & Friday
January 29 & 30
CAMP Sales & Marketing

 

Universal City, California

CARL WHITE

Carl White explores priorities and focus needed within the mortgage profession. 


Carl looks at “problems” in different ways, finding very meaningful solutions. He will make you a better leader in your mortgage business.

 

 

The 2015 Sales & Marketing Conference showcases the products, companies, and networking that is necessary to succeed in today’s mortgage industry.

Know your options.  Know CAMP.  Only $99.

 


 

 

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Learn step-by-step loan product options, networking and marketing skills.  A full program also includes access to the EXPO and a day of CAMP’s Compliance Workshop.

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555 Universal Hollywood Dr.

Universal City, CA 91608

Phone: (800) 445-8667

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