Login

JOIN MAMP TO ENSURE A STRONG MORTGAGE INDUSTRY IN MAINE


Welcome to our MAMP Blog

Here we will share articles of interest. All members are encouraged to post their own articles, share and comment on others.

<< First  < Prev   1   2   3   4   Next >  Last >> 
  • December 06, 2016 12:10 PM | Anonymous

    Below is the Lender Notice 2016-15. Should you have any questions, please contact your assigned Homeownership Officer.





  • October 26, 2016 1:46 PM | Anonymous

      About Us | Services | EmployersJob Seekers | Contact Us

    October 26, 2016
    Will new HMDA rule uncover steering issues that you might resolve NOW?
    So we'll deal with the new HMDA changes when they come, not before, right? Right! But be careful that the HMDA changes don't uncover existing fair lending concerns currently hidden from regulatory scrutiny ... concerns that we'd be better off identifying and correcting beforehand. 

    What am I talking about? Well an example is with steering and HELOCs/HELs vs. cash out refis.

    Steering Allegations: Violations of Existing Fair Lending Rules
    So historically there have been allegations of discrimination in who gets a HELOC as opposed to a full cash-out refinance. This comes in if minority applicants are more likely (than non-minority applicants) to receive a cash out refinance in cases where a HELOC or HEL was a more affordable and sensible option than a completely new loan. For example, if you have a good rate on a first mortgage already and want a modest amount of cash for vehicle repair or home renovation.

    So a problem would exist where, statistically, an African American customer of Bank ABC is more likely to be upsold on a full refinance (than a non-minority applicant) when a cheaper, quicker, HELOC would have been a better option for the particular circumstances. 

    Significance of HMDA Changes
    So the scenario described above already violates the existing fair lending rules in place, if the regulator happened to notice them. That last part is the key. Currently, HMDA data doesn't give regulators any information on HELOCs and very little data on pricing. The importance of the new HMDA changes is that HELOCs are now reportable and we have to report a full suite of pricing information (and no longer on HPMLs only).  This is a huge change in terms of what regulators can do at their computer desk before they ever even come on-site to dig through physical files. They'll be able to see a potentially discriminatory HELOC v. Mortgage trend with the click of a button, rather than having to dig through hundreds of physical loan files to try and gather that information. 

    So while the fair lending rules are the same, the simple fact that we have to report data on HELOCs for the first time will open doors that have remained unopened previously. 

    the fair lending rule is the same today as it will be post-HMDA changes, as of Spring 2019 the regulators will have an incredible amount of more abiility to identify and then dig into these issues.  There are several reasons for that, but most importantly here is the simple fact that we have to report data on HELOCs for the first time. 

    Note that the steering described above would also be problematic under the TILA anti-steering rule in 12 CFR 1026.36. 



    Bonus! Takeaways from Richard Cordray's MBA speech. 
    An interesting person to see speak in person. Walked onto the stage, read his speech, and walked off. No questions, no jokes, no fanfare. Came across as humble but hardened. Certainly looked exhausted. 

    Here are some things I picked up from listening to him:
    • CFPB will continue "good faith efforts" enforcement with TRID
    • Most lenders appear to have had favorable examination results with TRID
    • Companies have fared less well in the areas of servicing compliance and redlining.  
    • Fair lending appears top-of-mind for CFPB with Director commenting that "communities of color" have been slower to rebound from industry collapse
    • While stressing fair-minded approach and empathy for regulatory change, also showed some spine with strong, direct comments such as to point out that (I'm paraphrasing here), 'no industry whose irresponsible practices crippled the world economy could expect to escape without additional regulations in the aftermath.'
    • CFPB believes that new regulations will benefit responsible lenders as much as it will benefit consumers
    • CFPB "respectfully disagrees" with PHH Ruling and stated that the decision is not final. Which very well may be true.  From his comments, it does not appear they're modifying their practices with respect to RESPA interpretations. 

    Overall pretty interesting, I thought.  Read the full transcript of his remarks here.


    In Other News
    • Lot's of news this week, including Wells Fargo employees guzzling hand sanitizer
    • Of course we had the very sad, thought-provoking news that 51 year old David Stevens has cancer
    • Hey speaking of HMDA, how are we ever going to comply with the new collection requirements? Well the first start is understanding the new 1003, found here on Fannie's website, including the dynamic portions of the form (meaning you can't simply print off one application on physical paper to learn) and especially the addendums
    • I know we've all been working with the CFPB's guidance on vendor management, Bulletin 2012-03, but watch out for a brand new CFPB update on this issue - should be publicly available today. 

                                                      ________________

    Was a pleasure for me to attend the MBA's national conference in Boston. One of the events that caught my attention was the presentation by twin astronaut brothers Mark and Scott Kelly. Read about them here. They spoke about compartmentalizing - focusing on those things that they can control and ignoring other distractions.  Now, whether you're trying to connect a spaceship despite hanging onto the side of the ship at 17,500 miles per hour for the first time, or trying to run a successful mortgage banking shop while predicting economic trends and implementing regulatory reform, their point was to focus on those things you can control and be successful in those areas. 

                                                      _________________

    "When you look at this round ball, and everybody's down there, it doesn't seem all that big. You get a really good appreciation for the fact that this planet is an island, floating in the blackness of space. We really don't want to mess it up." 

    ~ Mark Kelly
    ____________

    Thanks so much for reading our weekly newsletters.  We're not always going to be perfect, but because we always do our best and try not to overpromise, we hope that we're always going to be trustworthy.  Your calls and e-mails are very helpful - please keep contributing.

      **These are our opinions. We're not authorized, or willing, to express those 
          of others.**  

     

    This article was prepared by Ben Giumarra with the support of other experts at SCA. Ben is a specialist in lending and regulatory compliance.

    SCA has consultants like Ben available to provide as-needed consulting support and advisory services. Specialties include risk management, quality control, system implementations and conversions, secondary markets, financial analysis, and other areas related to mortgage banking. 

    Hourly, retainer, and project-based options available. 

    Quick Links

  • October 24, 2016 1:49 PM | Anonymous



    Click HERE to view the MaineHousing September 2016 Newsletter
  • October 19, 2016 1:45 PM | Anonymous

      About Us | Services | EmployersJob Seekers | Contact Us

    October 19, 2016
    How long do you have (per regulation) to respond to mortgage borrowers? 
    Responding to mortgage borrowers is always good customer service but sometimes it is also required by regulation. This is especially true post-closing with the servicing department.

    Getting sidetracked ... 
    During origination, keeping a borrower informed is a key driver of customer satisfaction. To back that up you can point to the JD Power Mortgage Origination results. You can also point to common sense. Example - I bought a pair of shoes online recently. I got an e-mail confirming payment. Another e-mail explaining that it might take 1-2 days to ship. Another when it shipped. And a final e-mail telling me that it had been delivered. That's 4 e-mails in 5 days for a pair of shoes! Yet some lenders struggle to provide regular updates to a borrower regarding a mortgage loan that may take several weeks or more to close? Seems crazy to me. 

    Back to today's topic ... 
    Aaanyway. Back to today's topic. Responding to mortgage borrowers is also important post-closing (in servicing). 


    Story Behind the Regulations
    Look at what happened in 2008 (this from the perspective of the people who wrote the regulations) to understand the rules:

    The housing industry collapsed and quiet servicing/collection departments were quickly flooded with borrowers who wanted help paying their mortgages. What are my options? What should I do? Can I tell you what's happening and see if you can help me?  So a servicing staff with a 500:1 loan:employee ratio, which operated fine before, suddenly was drastically understaffed. Many departments couldn't hire enough people fast enough.

    So calls didn't get answered. People had difficulty getting good advice. They weren't informed of loss mitigation options that were actually available. They spent an hour on Monday telling their story to Tracy from loan servicing only to call back on Tuesday and have to start over again with Jim-- getting nowhere. 

    And so then they wrote the Dodd-Frank Act. And then the CFPB wrote new servicing regulations to help borrowers in similar situations. Some of these rules put new requirements for responding to borrowers, let's go through them:

    Payoff Information
    Federal regulations, as of 2014, now require servicers to respond to a written request for payoff statement within a "reasonable time" but no later than seven business days. TILA 1026.36(c). 

    But! Don't be tricked. Massachusetts regulations go one step further and require a response within five days. 209 CMR 18.21.

    So when you receive such a written request, you'll need to provide an accurate statement of the total outstanding balance required to pay off the loan, and you'll need to do it quickly!

    Error Resolution & Information Requests
    Here's another relatively new set of timing requirements (not completely new, but expands on pre-existing Qualified Written Request requirements):

    When a servicer receives a written letter asking either (a) to fix an error or (b) provide information about the loan, the servicer must follow these timing requirements:

    Notice of Error
    • 5 days to send written acknowledgement of consumer's notice
    • 30 days to correct the error or determine that no error occurred and send written notification
    Request for Information (other than payoff, see above)
    • 5 days to send written acknowledgement of consumer's notice
    • 10 days to respond with requested information if the consumer asked for the identify  of and/or contact information of the current owner/assignee of the mortgage loan
    • 30 days to provide any other type of information requested (or determine it is unavailable and provide written explanation). 

    BONUS NOTES

    1. Process Quickly to Save Paperwork
    If you can respond to the borrower within 5 days (whether fixing an error or providing information), you can skip the 5-day acknowledgment. This is a small incentive to process these requests quickly. 

    2. Extension Available
    Also, you can extend the time from 30 to 45 days if you send a different written notice within 30 days that tells the consumer you need more time to respond, including the reasons why. 

    3. Deal with "Kitchen Sink" Requests
    Sometimes you'll get a letter from a disgruntled consumer that has decided to work with some out-of-state financial assistance company. That means you'll receive a long-winded letter reciting every possible regulation applicable and alleging violations of everything. This letter won't be adjusted to the particular loan and is just a fishing expedition

    Be careful ignoring a request like this. But also be careful not to let your team get bogged down with it. 

     A servicer does not need to respond to an "improper" request for information, which includes a request that:

    • Is duplicative
    • Requests confidential, proprietary, or privileged information
    • Ask for irrelevant information
    • Is overbroad or unduly burdensome
    • Is untimely 
    A similar test applies for the Notice of Error requirements. 

    (There are detailed definitions of all of these, if you're going to ignore one of them, just be careful to follow the rules.) 


    In Other News
    • Know any beginner or novice secondary market department personnel? SCA is running a training for Mass. Bankers Assoc. on Secondary Market Basics.  I'm trying to attach the brochure here with more details- if that doesn't work e-mail me at BenGiumarra@scapartnering.com or Ben Craigie at BCraigie@massbankers.org for more information. The training is from 9:00 to 3:00 on October 25 in Marlborough and we'll work hard to have some fun. 
    • You know the CFPB is coming for payday lenders. Didn't mean too much to me and maybe not you. That's why I was surprised to find this counterattack so interesting. This is a research paper explaining why the payday industry is good for consumers and why the CFPB's efforts in this area are bad. Did you know the CFPB rule will put 15,000 payday lenders out of business? That it will reduce their revenue by 75%?
    • I don't tell Dad Jokes very often. But when I do, he laughs ...



    Seems crazy to me that the mortgage industry is "going grey," when the only thing I've ever experienced is selfless support from industry veterans. I can't imagine other industry newcomers wouldn't find a similar welcome wagon. Whenever I reach out for advice, I do so with trepidation, worried about taking time from someone's busy schedule. But to my surprise I've almost always found people willing to drop everything to help. Whether I'm calling to ask if mortgage is really spelled with a "t", or whether I want to understand why construction loans are packaged in separate phases, or why you would use different indexes with ARM loans, it seems someone more experience than me enjoys sharing that advice. Maybe at some point this will change, but I think I'm going to have many years ahead of feeling helplessly indebted to a great number of people. How can everyone be so busy but also so willing to help you with something completely unrelated to themselves?

                                                      _________________

    "I've had tons of odd jobs, but I think that I would probably be a fireman because you get to see the results of your job. You get there and there is a house on fire. You leave and there's not a fire anymore."

    ~ Luke Perry
    ____________

    Thanks so much for reading our weekly newsletters.  We're not always going to be perfect, but because we always do our best and try not to overpromise, we hope that we're always going to be trustworthy.  Your calls and e-mails are very helpful - please keep contributing.

      **These are our opinions. We're not authorized, or willing, to express those 
          of others.**  

     

    This article was prepared by Ben Giumarra with the support of other experts at SCA. Ben is a specialist in lending and regulatory compliance.

    SCA has consultants like Ben available to provide as-needed consulting support and advisory services. Specialties include risk management, quality control, system implementations and conversions, secondary markets, financial analysis, and other areas related to mortgage banking. 

    Hourly, retainer, and project-based options available. 

    Quick Links

<< First  < Prev   1   2   3   4   Next >  Last >> 
Powered by Wild Apricot Membership Software