Clarification – Risk Base Pricing Disclosures Made Easy (?)

One of my new year’s resolutions is to be very diligent in creating a valuable newsletter every week. My second resolution is to make sure I have it proofed three times before sending. The newsletter article titled “Risk Based Pricing Disclosures Made Easy”sent out on December 30th, 2010 describes the lender’s option to issue a Residential Mortgage Credit Score Disclosure for all loan applications. The article inadvertently makes it seem like this disclosure cannot be given out until the loan is approved. It’s important to clarify that this disclosure is given as a part of the Notice to Home Loan Applicant and can be included in the application disclosure packages. Once the lender decides to issue the disclosure to all borrowers this generic version can be given before the loan is approved. Many companies have chosen to have their credit report providers issue the disclosure. When lenders choose to issue a Risk Based Pricing disclosure on a case by case basis using one of the allowable methods, this RBP disclosure cannot be issued prior to approval. Thanks to those who contacted MU and WT to ask for clarification. As we work through the multiple regulations to roll out in 2011 we will need everyone to be vocal about varying interpretations and challenges. Every loan we save from non compliance can mean thousands of dollars saved. This is a good opportunity to remind everyone that the MMLA hosts a Risk Managers Working Group (RMWG) and newly formed Mortgage Compliance Working Group (MCWG). MMLA members are welcome to join in the monthly discussions to resolve underwriting and regulatory policies. Our mottos: There is safety in numbers! They can’t write all of us up! And the underwriter’s favorite: We are not the only lender requiring this to be documented! The Risk Managers Working Group meeting will be this Friday 1/7/11 at 8:00 am. Contact the MMLA to sign up. Happy New Year Everyone! Sincerely, Alice Alvey