CAMPs REAL TIME LEGISLATIVE INFORMATION UNDER THE DOME

Thursday, September 18

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

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

Until next week!!!

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

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

Watchdog: FHFA’s implementation was rushed and flawed

CLICK HERE FOR THE FULL REPORT

Ben Lane
September 17, 2014

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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House Approves QM ‘Points and Fees’ Fix

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

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

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

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

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

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

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

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Wednesday, September 17, 2014

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

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

Kathy Love Volunteer of the Year: Rick Bettencourt

NAMB Affiliate Company of the Year: Mortgage Educators and Compliance

NAMB Leadership Award: John Stevens

NAMB Distinguished Industry Service Award: Harry Dinham

A big congratulations and thank you to all the winners.

 

Cha-cha-changes….

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

Register for the webinar:

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

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

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

On the legislative front:

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

Upcoming Chapter Events:

TOMORROW!

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

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

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

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

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

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

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

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

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

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

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

CAMP Statewide Calendar

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

Until next week,

Michelle Velez, President

California Association of Mortgage Professionals

shellvelez@gmail.com  I  thecampsite.org

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Washington is protecting buyers right out of homeownership

BPC Housing Commissioner: Give borrowers a chance to fail

Trey Garrison
September 16, 2014 12:37PM

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

That’s all three, Couch said.

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

The bottom line?

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

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

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

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

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

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

Thank you,

The Consumer Financial Protection Bureau

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Waters Floats Bill to Repair Credit Report Flaws

WASHINGTON — Rep. Maxine Waters, D-Calif., unveiled draft legislation Wednesday aimed at protecting consumers from errors in their credit reports.

The bill would seek to remove information from credit reports that are detrimental to borrowers as a result of their taking out a predatory loan, reduce to three years the period during which adverse information can remain on a credit report and require credit data furnishers to retain records to verify credit reports are accurate and complete, among other provisions.

“Credit reports are no longer just used exclusively by lenders in making a credit decision. More and more, credit reports are used in a variety of ways, from employment decisions, to determining a consumer’s ability to rent a home, buy a car, or purchase insurance,” Waters, the top Democrat on the Financial Services Committee, said in a press release. “A person’s credit report is too important in determining access to a wide array of opportunities for these reports to contain inaccurate and incomplete information.”

Waters’ office cited Federal Trade Commission statistics showing that one in five consumers — or roughly 40 million — has had an error on one of their credit reports, with errors increasing the cost of credit in about 10 million of those cases.

“This proposal addresses many of the flaws with the existing consumer reporting system, by making common-sense changes that enhance consumers’ rights, create more transparency over the consumer reporting and credit scoring process, and increase the accountability of credit reporting agencies, furnishers, and companies that develop credit scoring models and formulas,” she said.

The bill would remove from reports debt that has been paid off or settled, as well as remove adverse information related to delinquent private student loans when a borrower has made consecutive on-time monthly payments.

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Wednesday, September 10, 2014

Happy Wednesday! If you are coming to Sales Mastery, come find me and say Hello! I am flying in later this morning and then going on to NAMB National this weekend. I hope to see you at one or both events!

There is so much to think about that it’s a good thing there is not much happening on the legislative front (at least for the moment). But have you seen the STRATMOR Compensation Connection Survey? It showed that LO compensation was up 13% in 2013. Comp was driven by higher production volumes and that LOs at independent mortgage companies made on average 25% more than bank LOs. If you didn’t get a chance to participate last year, you will have the opportunity to participate this year! By popular request, STRATMOR has reopened all of the original modules for a second round of evaluation but will be closing the survey to participants soon. Be armed with compensation data from 40+ participant companies as you head into budget season. The results will be cumulative from both rounds.  Thank you to Rob Chrisman for the head’s up. If you would like full details, visit the 2014 STRATMOR Compensation Connection Survey website by clicking here.

Have you seen the changes to FHA? FHA recently published a final rule to be effective on FHA loans closing on or after January 21, 2015. The new rule revises FHA’s regulations to prohibit a lender/servicer from charging the borrower interest to the end of the month in which the mortgage is being paid off. It now allows them to charge interest only to the date the loan is paid off and prohibits charging interest beyond that date. This change is in response to the Ability-to-Repay and Qualified Mortgage regulations (ATR/QM Rule). The ATR/QM Rule defines “prepayment penalty” in closed-end transactions as “a charge imposed for paying all or part of the transaction’s principal before the date on which the principal is due.” The ATR/QM Rule specifically excludes a post-payment interest charge currently allowed by FHA regulations as a prepayment penalty for FHA loans closed before January 21, 2015. For FHA loans closed on or after January 21, 2015, a post-payment interest charge will be considered a prepayment penalty by the ATR/QM Rule, thus making it necessary for FHA to amend its regulations.

Additionally, FHA is also making adjustments to their ARM program. In a separate final rule, FHA made two changes to their ARM program. These changes are consistent with industry practices already required by the CFPB for conventional mortgages. The new policies will become effective for FHA-insured ARMs consummated on or after January 10, 2015. These changes will require lenders to base an interest rate adjustment that results in a corresponding change to the borrower’s monthly payment on the most recent index value available 45 days before the date of the rate adjustment (commonly referred to as a “look-back period”). The CFPB is currently providing a 30-day look-back periods for FHA ARM loans, but the exception is scheduled to expire in January 2015. This new rule will require lenders to comply with the disclosure and notification requirements of the CFPB’s TILA Servicing Rule, including at least a 60-day (but no more than 120-day) advance notice to the borrower of an adjustment to their monthly payment. Previously, FHA required a 25-day advance notice.

Upcoming Chapter Events:

TOMORROW!

Are you committing Loan Fraud? You may be and just don’t know it. Join Central Valley CAMP on Thursday, September 11, 2014 at Fort Washington Country Club, 10272 N Mill Brook,  Fresno, CA 93730. Contact Nick Barayuga at 559-349-9091 for more information.

Do you know everything you need to know about the flood insurance changes? If not, join Silicon Valley CAMP on Friday, September 12, 2014 Three Flames Restaurant, Banquet Room, 1547 Meridian Ave, San Jose, CA 95125. Register online at www.siliconvalleycamp.com.

Be a Pro on the Probate Process, learn everything you need to know about completing a probate transaction! Join San Gabriel Valley CAMP on Tuesday, September 16, 2014 at C&S California Capital, 644 S Barranca Avenue, Covina, CA RSVP today at campsgb@gmail.com.

 

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

TODAY!

San Francisco Peninsula Chapter on Wednesday, September 10, 2014 at the SAMCAR Training Room, 850 Woodside Way, San Mateo, CA. Contact Donna Aldrich at donna@donnaaldrich.com for more details.
North Bay Chapter on Tuesday, September 16, 2014 at Luchessi Park – Petaluma Community Center, 320 N McDowell Blvd, Petaluma. Contact Rick Reith at rick@amex.net for more details

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

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

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

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

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

CAMP Statewide Calendar

If you would like me to include upcoming events

please send me an email.

Until next week,

Michelle Velez, President

California Association of Mortgage Professionals

shellvelez@gmail.com  I  thecampsite.org

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Cash Sales Share Is the Lowest Since the Start of the Financial Crisis

Cash sales made up 33 percent of total home sales in June 2014, the lowest share since September 2008 (considered the unofficial start of the financial crisis), and down from 36.3 percent in June 2013. While the cash sales share also fell month over month from the 34.4 percent reported in May 2014,  cash sales share comparisons should be made on a year-over-year basis due to the seasonal nature of the housing market. The share has fallen year over year  each month since January 2013. Prior to the housing crisis, the cash sales share of total home sales averaged approximately 25 percent. The peak occurred in January 2011, when cash transactions made up 46.2 percent of total home sales.

Figure 1 shows the historical trend in the cash sales share by sale type. Real estate owned (REO) sales had the largest cash sales share in June at 55.3 percent, followed by re-sales (32.5 percent), short sales (31.8 percent) and newly constructed homes (16.2 percent). While the percentage of REO sales that were cash transactions remained high, REO transactions made up only 7.2 percent of total sales in June and, therefore, did not have a large influence on the overall cash sales share. In January 2011, when the cash sales share was at its peak, REO sales made up 24 percent of total sales.

cash sales share by state for June 2014

Figure 2 shows the cash sales share by state for June 2014. Florida had the largest share of any state at 50.9 percent, followed by Alabama (48.1 percent), New York (44.6 percent), Kentucky (40.1 percent) and Nevada (40 percent). Of the nation’s largest 100 Core Based Statistical Areas (CBSAs)[1] measured by population, Cape Coral-Fort Myers, Fla. had the highest  share of cash sales at 61.2 percent, followed by West Palm Beach-Boca Raton-Delray Beach, Fla. (60.6 percent), North Port-Sarasota-Bradenton, Fla. (59.8 percent), Miami-Miami Beach-Kendall, Fla. (58.7 percent) and Fort Lauderdale-Pompano Beach-Deerfield Beach, Fla. 58.5 percent). Washington-Arlington-Alexandria, D.C.-Va.-Md had the lowest cash sales share at 15.6 percent.

[1] The cash sales share for CBSAs listed in this report was calculated using cumulative sales from the past three months.

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Monday, September 8

We are in the final stretch for NAMB National and it starts this week. With all of the waiting and all of the anticipation, I am really looking forward to a great conference. Please, when you get to NAMB National, try to make it to all of the speaker sessions and the exhibit booths. I think that you will be very satisfied with this show.
We have found a problem with the NAMB+ Web site (www.NAMBPlus.com) for the log-in information. So, we are changing to the following procedure: Your User Name will now be your NAMB Membership Number (123567) [you can click here to obtain your member number if you don’t have it available] , and your Password is the first initial of your first name capitalized followed by your last name with the first initial of your last name capitalized (example: DFrommeyer) like it is on your account. This should correct the problem.

I would like to thank Valerie and Dave from the Florida Association of Mortgage Professionals (FAMP) for a great time this past week. They had 104 booths, yes 104 exhibits, and they had a fantastic conference. FAMP has done an excellent job of growing their membership and their conference. If you are a state and looking for some pointers, send Valerie Saunders an e-mail (valsaun@gmail.com) and she might share some of her secrets.
We had meeting with the Consumer Financial Protection Bureau (CFPB) on Wednesday in Washington, D.C. We continue to request that the CFPB to remove the lenders compensation from the three percent rule like they did for the bankers and the banks. They are actually asking for more information from us. A lot of what they are saying is that they are not looking at those entities the same as they are looking at the brokers, because they cannot control the after sale pricing and cannot assess the money earned because it is after the sale. Our Government Affairs Committee will be sending out a questionnaire for information, and all I can do is ask you to please complete it and send it to us with good data. Remember, the CFPB is a data-driven organization. Look for it soon.
And don’t forget, the CFPB will be at NAMB National on Monday afternoon. Please make sure that you come to get the most up to date information from them. I don’t think you will be disappointed.
As I write my final Monday Morning Messenger as NAMB president, I am reminded that we have really evolved over the past three years. We have made this a stronger association, and it is because of you, the member. I hope in the last three years, we have helped you and represented you in the most professional manner we can. And this is sure to continue. The new NAMB Board coming in is a great group of people who will carry the torch for you in every way, shape and form. As I move to the seat on the Board as Immediate Past President, I am still your greatest supporter and believer.
On Friday, there was a press release issued and I hope you all saw it. It announced that the NAMB Board of Directors has elected me to the position of NAMB CEO. This basically means that I will still represent NAMB at certain conferences, in Government Affairs meetings and will be the outward face of the association. It is an honor to do this, and I will still write my column, the Monday Morning Messenger. I may move it to every other week, but that will happen probably next month.
I thank you from the bottom of my heart for the past three years. It has truly been an honor and pleasure to serve you. In Vegas, please do not be a stranger. I would like to thank each and every one of you personally. I love you all.
And one final note … I was talking with someone in Florida and he pointed out to me that I keep saying that we have “more than 5,300” members. As I was politely corrected, NAMB has 5,300 dues-paying members, but it represents all 113,000 originators in America. How true. We do represent both paying and non-paying members!

Until next week!!!

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

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