The New World of QM

Posted by Krista Sabol on Mar 4, 2014 in Origination, QM/ATR Rule 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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FHA Seller Concession Rules Proposal Issued

Posted by Krista Sabol on Mar 1, 2012 in FHA, IMU Blog, Origination, Processing, Proposed Rules, Rules Watch, Underwriting 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

Posted by Krista Sabol on Jan 9, 2012 in Appraisals, FHA, FHA/VA, IMU Blog, Operations, Origination, Processing, Quality Control / Audit, Underwriting 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?

Posted by Krista Sabol on Nov 15, 2011 in Operations, Origination, Processing, Underwriting 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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Michigan Law Requires Licensing Of Individuals Handling Loan Modifications

Posted by Krista Sabol on Jul 19, 2011 in NMLS SAFE Act, Operations, Origination 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

Posted by Krista Sabol on Feb 15, 2011 in Closing, Operations, Origination, Quality Control / Audit, TILA, Underwriting 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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Appraiser Independence Rules Effective 4/1/11

Posted by Krista Sabol on Feb 15, 2011 in Appraisals, Origination, Processing, Quality Control / Audit 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

Posted by Krista Sabol on Feb 15, 2011 in Dodd Frank Act, Origination, Quality Control / Audit, Underwriting 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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Mortgage U To Conduct FHA Training For HUD

Posted by Krista Sabol on Jan 20, 2011 in Fannie Mae / Freddie Mac, FHA, FHA/VA, Origination, Underwriting 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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Appraiser Coercion or Not?

Posted by Krista Sabol on Jul 2, 2010 in Appraisals, Fraud, Origination, Processing, Underwriting 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

Posted by Krista Sabol on Jul 1, 2010 in Origination, SAFE Act 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?

Posted by Krista Sabol on Jun 29, 2010 in Origination, Processing, Proposed Rules, Quality Control / Audit, TILA, Underwriting 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

Posted by Krista Sabol on Jun 29, 2010 in FHA, Origination, Quality Control / Audit, Underwriting 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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RESPA & Origination: Complaining won’t help

Posted by Krista Sabol on Mar 15, 2010 in Origination, RESPA 2010 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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