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Getting TRID QC Right

To make implementation smoother, quality control teams should be involved in the planning process for TRID> Many companies have underestimated the resources needed and the cost to implement the new TILA-RESPA Integrated Disclosures (TRID) rules. Budgets have been thrown out the window, and management has implemented a “get it done, on time, at any cost” approach. As the implementation...
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You Can’t Manage What You Can’t See

Integrated Disclosure implementation is likely the largest project the mortgage origination teams will go through this year touching every step in the process. (Unless of course you’re going through an origination system change at the same time.) Project management on this scale is a skill. Mortgage managers know how to handle each loan file as a project, but don’t often have the additional...
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The New World of QM

Managing The Change For Originators in the New World of QM Much has been written about the impact of the Qualified Mortgage (QM) and Ability to Repay (ATR) rules from a legal and compliance perspective. Have you noticed whether the stress of this buzz, throughout your company and the industry, is causing originator sales paralysis? In a recent training class of highly experienced originators, a...
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AML training for Mortgage Sales and Operations

The Anti-Money Laundering (AML) and Suspicious Activity Reporting (SAR) section of the Bank Secrecy Act (BSA) will go into effect for lenders on August 13, 2012 and we can get you in compliance with AML/SAR webinar training and procedures for your staff .   The program outline is attached. The agenda sticks to the topics that originators, processors, underwriters and closers need to...
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5 Cents On Combined Job Descriptions

Recently a client asked whether combined job descriptions make sense. In his case the company combine processing, closing and shipping the file to the investor. I have seen many shops, in particular community banks, the combine processing and closing. The challenge for every one of the companies is the delays and problems that start to occur when there is a plan to expand and grow the sales...
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FHA Seller Concession Rules Proposal Issued

The long awaited details of the proposed rule to limit seller concessions is finally back in the federal register. A re-proposal requesting comments was published yesterday, Feb. 23 with a comment period open until March 26th. The new proposal combines a percentage cap with a dollar limitation and works like this (of course it isn’t just a straight forward policy!): The seller is permitted...
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New FHA Total Scorecard Guide Summary

What do I need to know about the new FHA Total Scorecard Guide? Download Copy Of The FHA Total Scorecard Guide 2011 As you may know FHA released a new FHA Total Scorecard Guide (TSG) with some pretty significant changes. Our team sat down and scrubbed the new TSG to identify and relay the changes to you on our blog. The details will most certainly be incorporated into our FHA Practical...
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When Can The Earnest Money Deposit Be Refunded?

October 18th, 2011 by Alice Alvey, CMB Realtors and sellers constantly struggle with trying to identify if a pre-approval letter is worth the paper it is written on. The costs and delays associated with accepting an offer from an unqualified or marginal buyer can be significant. Even a good loan originator can have a problem when buyers change their financial condition during processing or...
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FHA Mortgagee Approval Clarification

Many lenders are still trying to understand the new FHA approval requirements. As an industry, we have ML 09-31, ML 10-03, ML 10-20 (the main mortgagee letter), ML 10-38 and ML 11-25, along with the FHA Handbook 4060.1 rev.2, FHA’s website and FAQ’s as reference documents to determine FHA approval policies. Over the last few months I have been fortunate to conduct training programs at HUD on...
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Michigan Law Requires Licensing Of Individuals Handling Loan Modifications

The Michigan Office Of Financial and Insurance Regulation (OFIR), now an office under the Department of Licensing and Regulatory Affairs (LARA) issued a letter clearly stating that effective July 31, 2011 any employee solely performing loan modification activities as defined by the MLO Licensing Act must be licensed as a Mortgage Loan Originator. This requirement applies to institutions who must...
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Regulation Z High Priced Loan Definition Change Proposal

This proposal will make several big changes to Regulation Z /TILA. You can find the text in the federal register at: 75 FR 58539. The comment period closed 12/23/10 and we are awaiting more information from the Federal Reserve Board on whether all or part of this rule will move forward. Here is a summary of the key parts of the proposal: Rescission: There is a proposed new ‘Notice of...
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Anti Money Laundering (AML) and Suspicious Activity Report (SAR) Proposal For Lenders and Brokers:

Financial Crimes Enforcement Network (Fin CEN) issued a notice of proposed rule(NPR) 12/6/10 to require ‘a loan or finance company’ to comply with Anti-money laundering programs and SAR reporting. (Yes, this would include lenders and brokers). The Secretary has authority to do so under the Bank Secrecy Act. They tried this in 2002 and it was pulled back to conduct studies on the impact...
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Appraiser Independence Rules Effective 4/1/11

October 28, 2010:  The FRB published the first rule for mortgage lenders under Dodd Frank to specify the requirements for the Appraiser Independence rules.  It is an ‘interim final rule’.  They accepted comments until December 27, 2010 but followed with a statement that mandatory compliance is April 1, 2011. Scope per Final Rule: Applies to creditors, appraisal management...
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Qualified Mortgage, Qualified Residential Mortgage And Risk Retention

Under Title XIV of the Dodd Frank Act federal regulators must establish minimum underwriting standards for residential mortgage loans by 4/15/11 (excluding reverse mortgages and bridge loans of up to one year). This referred to as the Qualified Mortgage standard (QM). The requirements will define how a lender will support the consumer has a reasonable ability to repay the obligation. The QM...
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Underwriting FHA in 2011

The current shortage of underwriters has made FHA Direct Endorsed (DE) underwriters a hot commodity as lenders continually seek for underwriters with a CHUMS ID #. Why are DE underwriters so sought after in today’s mortgage market? Here are some of the key reason that the CHUMS ID # has become good as gold: 1) The underwriter has prior FHA experience 2) Only DE underwriters can review...
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Mortgage U To Conduct FHA Training For HUD

Indecomm-Mortgage U is proud to announce that we have been selected by Campus MBA, the education division of the Mortgage Bankers Association to conduct FHA training for a team of employees from the Department of Housing and Urban Development. The training will cover an overview of FHA residential, senior housing and hospital programs including renovation lending, reverse mortgages as well as...
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97th MBA Convention, Atlanta Panel of Industry Experts

The 97th Annual MBA Convention is here. We are looking forward to the panel of prestigious experts on the mortgage industry assembled by Solidify for October 26, 2010 in Atlanta. The expert panel includes Pete Taglia, CPA, CMB, Vice President of FTN Financial Capital Assets Corporation whose expertise is loan sale and securitization strategies, asset backed securities and portfolio analysis...
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How Many Loans by Processors?

Alice Alvey President, CMB  Indecomm-Mortgage U, Inc. I have been on a mission asking every customer ‘how many active loans can your processors handle in their pipeline?” As you can probably guess I receive a lot of questions in return trying to qualify the definition of pipeline, processor and if the processor is working overtime. One person asked me if the processor is...
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Processors are a Bridge

A processor’s role has changed dramatically from the first widespread use of computers in the ‘80’s to the paperless task management systems of today. The automated systems moved the industry into thinking processing was an entry level administrative task. It is not uncommon to hear processors say ‘it doesn’t matter what documentation I think I need, the underwriter is going to change...
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FHA Fine Print Reduces Allowable Lender Contributions

FHA published a proposal on July 15th announcing changes to important underwriting requirements. Lenders and brokers must be aware of a problem in the fine print and respond to FHA immediately! FHA is not only changing the maximum seller contribution from 6% down to 3% they have changed the definition of ‘interested third party’ in a footnote at the bottom of page 41220. FHA’s 4155.1...
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Appraiser Coercion or Not?

Everyone in the mortgage industry, including borrowers are all too familiar with the challenge of trying to determine whether the comparables provided by the appraiser are adequate. Typically the underwriter is concerned that the value is inflated and the borrower and loan officer are concerned that the value is too low. The ‘tip toe’ around the home valuation code of conduct and requesting...
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Land Contracts

Realtors and builders are realizing that their new state licensing laws may include a provision to require a license when you sell a non-owner occupied property on a land contract. Many people have never used or heard of land contracts. They were popular in the late 70’s, early 80’s and prior when mortgage’s didn’t have a due on sale clause. Under a land contract, the seller retains...
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Regulation Z ARM Changes – Still?

Regulation Z had a proposed rule with a comment period that expired 12/31/09. This proposal received over 3300 comments primarily focused on the section that would prohibit loan originator compensation based on the terms of the loan. Now that the financial regulatory reform bill has included the ‘prohibition on steering’ and restriction of loan originator compensation, we’ll be watching...
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FHA’S New Lender Approval World

FHA ML 10-20 outlined the provisions for HUD’s reform of the lender approval process. Effective May 20th 2011 most lenders must possess a net worth of at least $1m (20% must be liquid assets). The only exception is for small lenders as defined by the Small Business Administration: o mortgage & non mortgage brokers with $7million or less in gross receipts; o Banks, Savings institutions...
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Faxes, eSign and Disclosures for FHA

Yes it still says in the FHA Handbook (4155.1 1.3e) “include in the loan file a certification stating that original documents were examined” and a lender should include a document that makes this certification. The guide also states that lenders may use fax documents as long as the fax header of the document supports an acceptable source. As we move faster and faster into using more...
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RESPA & Origination: Complaining won’t help

I received an email today from a loan originator complaining about the new GFE as if it had just been rolled out in March! The ranting consisted of the usual complaints with the form – ‘why doesn’t it show the seller credit?!’… ‘this is not clearly showing the funds needed to close’… ‘why do I have to show block 1 so large in order to get block A to reflect the right...
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The Red Flags Rule: Deadline Extended

The Red Flags Rule has been extended three times. Lenders are required to have a written policy in place no later than December 31,2010. Don’t expect an extension again! (Well maybe) Attached is a sample red flags policy that is available at the FTC website. For those of you at a small to midsized community bank or credit union, lender or broker, you may find that this template is the best...
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FFIEC Fraud Report February 2010

The FFIEC has updated its fraud report to include more information about short sale and foreclosure fraud. This publication illustrates the various types of mortgage fraud, example scenarios and the red flags lenders should be aware of in order to properly detect fraud in advance of a loan closing.
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