Don’t be foolish about the status of the CFPB.

Hi folks.

There are a couple of eccentric mortgage folks out there who publish video blogs that announced today (with great glee) that RESPA is dead. Looked like a comedy skit.

Please do not believe this sensationalism. What is going on right now at the CFPB is a leadership issue, and I think it is resolving itself in the favor of the White House. That means we will likely see a more conservative approach to adding new and aggressive tactics to the present CFPB platform. It does NOT mean the CFPB is without teeth. It does NOT mean everything the CFPB has put in place is going to be dismantled. It does NOT mean RESPA is “dead”.

Do NOT make that mistake.

Video blogs that celebrate the end of regulation are irresponsible and demonstrate why we found ourselves in this regulation situation  in the first place.

If you have questions, just email me. And please folks, stay classy.

confused

 

WARNING – Audit Activity Increasing

Florida, Texas, and Washington are all showing an increased level of mortgage broker and lender audit activity.

The recurring themes are:

  1. Advertising issues
  2. MCR issues
  3. Unlicensed Originators

Most of the business being tagged are in their first two or three years of existence.

Some are older, established businesses.

You need to be aware.

If you have received one of these audit letters, please contact us for assistance.

Respectfully,

 

Nelson A. Locke, Esq.

Compliance Services USA

(800) 656-4584

 

CFPB revises HMDA changes on October 17th…………

Things have changed again with HMDA, good for brokers and smaller lenders.

On Oct. 16, 2017, the CFPB published a new chart, the Reportable HMDA Data: A regulatory and reporting overview reference chart  (“Reporting Reference Chart”). The changes relate to raising the reporting threshold volume numbers on open ended credit to where most brokers and small lenders may find themselves exempt.

HMDA 010118 Flow Chart

I need to clarify a HMDA comment I made in an earlier blog. A broker does not have to report to HMDA a credit decision made regarding a pre-qual. But the broker does have to comply with ECOA and send the consumer an adverse action notice. Some pre-quals never get to a lender – thus the duty falls on the broker who decides not to pursue the loan. “Six items or not.” You can never go wrong sending an Adverse Action Notice. Its a best business practice.

Let us hear from you.

Nelson A. Locke, Esq.

Compliance Services USA

http://www.expertlenderservices.com

(800) 656-4584

 

 

What is the Uniform Closing Dataset and do I have to file this effective September 25th, 2017?

https://www.fanniemae.com/singlefamily/uniform-closing-dataset

The Uniform Closing Dataset Protocol (UCD) is a component of the Uniform Mortgage Data Program® (UMDP®), an ongoing effort by Fannie Mae and Freddie Mac at the direction of our regulator, the Federal Housing Finance Agency, to provide a common industry dataset to support the Consumer Financial Protection Bureau’s (CFPB) Closing Disclosure.

You as the Broker may be required to file this information. Some Lenders are asking for evidence you filed it as a pre-closing condition while others are doing it for you. You need to be aware of what it is and how to do it, in case you become responsible for the actual submission.

I suggest you contact the lenders that you broker Fannie and Freddie loans with and see what they choose to do. Further, this may affect VA and USDA. I’m not clear on that yet.

Here is a Industry Cheat Sheet for your use. This may help you. https://www.fanniemae.com/content/fact_sheet/ucd-fact-sheet.pdf

As always, contact us via email with any questions, but not until AFTER you have read these links please. The answer may be there.

Nelson A. Locke, Esq.

Compliance Services USA

(800) 656-4584

 

 

 

 

To advise your clients of the recent Equifax NPI mega-breach……

Here is a letter format you can use as either an email or a printed letter. It might be a good idea to include a copy of this with new loan applications for the next 180 days or so. It might even be a good idea to link your website to the below press release, you could do this on your IMPORTANT DISCLOSURE page.

EQUIFAX CYBERSECURITY INCIDENT

Dear Client,

Equifax announced recently that they had experienced a “cybersecurity incident potentially impacting approximately 143 million US customers.” Because your recent mortgage transaction with us may have involved a credit pull from Equifax, we felt you should read the attached Equifax press release.

https://investor.equifax.com/news-and-events/news/2017/09-07-2017-213000628

Equifax states it has established a dedicated website which can be accessed at this link www.equifaxsecurity2017.com to help consumers determine if their information has been potentially impacted and to sign up for credit file monitoring and identity theft protection.

Sincerely,

Your Name, NMLS Number, Address, and Phone.

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Thanks for reading.

Nelson A. Locke, Esq.

http://www.expertlenderservices.com

 

 

Quit guessing when you make a job offer or hire a new MLO.

nl@lockelaw.us

Hi folks,

I get a lot of requests from clients who are hiring new MLO or other staff and are unsure of what they need to do to have a good solid hiring package.

So I created one for you. It is about 50 pages long and includes everything from an offer letter all the way to a copy of the generic HR manual. All you should do is pick the pages you need and put them to use.

If you would like this,please click below and send a request. It is FREE to current clients and $250 to non-clients.

Our Compliance Program includes all your Manuals, Annual Training, electronic media audits, Safe Act and DF Certification, and our exclusive Audit Protection Plan. Our annual fee works out to about 150 bucks a month. All inclusive. We accept credit cards. When the regulator sends the audit letter – you are NOT alone.

To send a contact request for this package, click here. nl@lockelaw.us

If you received a file named MLO Hiring Package already, it had two missing pages. I have already re-sent MLO Hiring Packaged FIXED to you. If you have the old one, just destroy it.

CLICK HERE to view our Web Site.

Compliance Services USA
(800) 656-4584

Discussion of the October 2017 RESPA TILA changes …….

Comments on changes to the 2017 RESPA TILA Rule HERE. 201707_cfpb_Executive-summary-of-2017-TILA-RESPA-rule1

This is a poorly named Rule Change. Compliance is optional from October 2017 to October 2018. Compliance will become mandatory for applications received on or after October 1st 2018. Many are under the impression these changes must be implemented this October. Not so. You can implement changes according to any plan you create before October 2018, but you must have all changes in place October 2018.

Here are the key points and please remember, these are mandatory in October 2018.
1. Choice to use a CD versus an LE when checking tolerances and good faith. This is the creditors choice, not the broker.
2. Servicers will be required to provide consumer disclosures regarding partial payment policy and notice of the closing of an escrow account that was subject to RESPA.
3. You must treat cooperatives as if they were real property and provide the required RESPA TILA disclosures, regardless of how your state classifies cooperatives. Some presently call them personal property and claim they are exempt from these disclosures.
4. Now, Loans to Trusts are subject to all disclosures. Trusts will be treated as if the credit extended to natural (not artificial) persons. This is curious and should be sending a message to those of you who bundle 1 to 4 family units into new LLCs and claim exemption from RESPA-TILA. Small commercial is on the radar for RESPA TILA.
5. There are clarifications regarding construction loans. If there are going to be two phases, you must provide two GFE within three days of receiving the application for the particular phase. If only one transaction, then only one disclosure. There are many clarifications regarding how to allocate costs – see page 5 of the report attached above.
6. Simultaneous closings of a purchase money first and second – allows you to disclose the loans combined. I always recommended this. The law says your client has to understand the big picture. Have you ever seen a client try to add together two sets of GFE or LE or CD?
7. Tolerances now say if overstated, still ok. If understated more than $100, not OK.
8. If you fail to allow a consumer to shop for settlement services, there is ZERO tolerance.
9. Loan Estimate guidance is on pages 7 and 8.
10. Written list of Providers – see page 10 bottom. If you don’t use the special layout for the disclosure, you might lose the safe harbor.
11. SHARING DISCLOSURES – you can do it. Just be sure to correct so that what you send to the seller, for example, is what applies to the seller and NOT the buyer. And vice versa. You can leave the information you want to protect – off the form by providing it as blanks.

Respectfully,

Nelson A. Locke, Esq.
Mortgage Industry Compliance Expert
Attorney and Expert Witness
7800 Preston Road – Suite 118
Plano, TX 75024
Office (800) 656-4584
Cell (305) 951-2785
http://www.lockelaw.us
http://expertlenderservices.com