Feature Article #1

The Financial Crisis Inquiry Commission is Interviewing the Wrong People

The Financial Crisis Inquiry Commission is currently interviewing bank CEOs in order to examine the cause of the current financial crisis.  So far, it sounds like the bankers are very concerned about their bonuses and are shirking off the cause of the financial crisis as a nothingburger.
We keep hearing the bankers say “We need to pay out big bonuses [...]

mf | January 16th, 2010 | Continued

Feature Article #2

Paramount Equity Consent Order

Paramount Equity has settled their case with the Washington State Department of Financial Institutions. Read the Consent Order here.  The Statement of Charges outlined many, many violations of state and federal law:

Using the term “mortgage bank” in their radio ads. Paramount Equity is not a bank and they are not permitted to use the words [...]

mf | May 15th, 2009 | Continued

Feature Article #3

Fiduciary Duties for Mortgage Brokers and LOs

In October of 2007, Andrea Negroni wrote an article for Mortgage Banking Magazine titled “Mortgage Brokers–What Fiduciary Duties Exist?” Negroni provides a framework for mortgage brokers to begin learning about case law already on the books where courts have imposed fiduciary duties on brokers.
The National Association of Mortgage Brokers has been quite insistent that brokers [...]

mf | June 20th, 2008 | Continued

Feature Article #4

Reverse Mortgage Loan Originations Caught up in New State Law Changes

This memo was sent to me by a member of the National Reverse Mortgage Lenders Association:
Member Alert: NRMLA Trying to Resolve Licensing Issues in Washington State
June 2, 2008
Washington state recently passed legislation (SB 6471) that may impact non-depository lenders, as well as the correspondents, subsidiaries and affiliates of depository lenders who make reverse mortgage loans [...]

mf | June 17th, 2008 | Continued

Feature Article #5

Mortgage Industry Codes of Ethics

Read the Code of Ethics from these three trade organizations.  Don’t worry; it will be a very fast read.

National Association of Mortgage Brokers
National Association of Mortgage Women
For the Mortgage Banker’s Code, follow this link and click on “cannons” from the menu on the left.
What’s missing?
Could some of these phrases be re-worded?  If so how? 
For example from [...]

mf | June 14th, 2008 | Continued

About this Site

The National Association of Mortgage Fiduciaries was formed primarily to educate and guide mortgage lenders into fiduciary status. We recognize that the mortgage lending industry is undergoing dramatic change.  The current global economic crisis which began with the subprime meltdown in 2007 has historic roots in mortgage lending securitization and the eventual relaxation of underwriting [...]

NMLS Approved 20 Hour Pre-Licensing and Exam Prep

Other Recent Articles

To the Students from the 20 Hr Prelicensing Class at Firstam Yakima March 2010

Hi Everyone,
Here’s the follow up Q&As from today
 Here is the updated Credit Suisse chart.
There was a question as to whether or not a church can gift the funds for closing on an FHA loan. Here is a link to the HUD manual….
“An outright gift of the cash investment is acceptable if the donor is…
•the borrower’s relative
•the [...]

4Mar2010 | mf | 1 comment | Continued

To the Students from the Feb 16-18 SAFE Pre-Licensing Class at UoPhx Bellevue

Hi Students;
Day 1 follow up:
Here’s the link to the Neighborhood Watch website where you can check on the status of a company’s FHA delinquencies. Follow the link that says “Early Warnings.”
There was a question about the use of the word “firm” in the WA State law Escrow Registration Act. Here’s the link to the definitions [...]

17Feb2010 | mf | 0 comments | Continued

To the Students from the Jan 19-21, 2010 Pre-Licensing Class

Hi Everyone,
Here’s the follow up from Day 1:
Ken Harney’s column regarding LOs using worksheets to provide a pre-GFE in order to attempt to escape quoting fixed costs on the new GFE.
Link to the Neighborhood Watch website where we can check on the FHA default rate of various companies.  And a related story from the Seattle [...]

20Jan2010 | mf | 2 comments | Continued

New National LO Exam Pass Rate 69%

The pass rate of the new national LO exam is 69%.  Between July 30, 2009 and November 30, 2009:
10,421 national exams were taken and 7,219 passed the exam. The report PDF is available here.
This means the new national exam is too easy, like I surmised back in June.  Or is it?
What would be more helpful to [...]

27Dec2009 | mf | 20 comments | Continued

Z3 Case Studies

Pedro and Kip are ready to buy a home.  Kip is a Veteran and they want to use her VA Eligibility Certificate to finance a home.  Pedro just finished college and has a degree in theater.  He is new on the job and works in customer service in a white collar industry.  Kip has worked [...]

24Nov2009 | mf | 17 comments | Continued

Z2: Case Studies

Vashon and Riley want to re-enter the housing market as investors. (They currently own their own single family homes.) They have attended several investment seminars put on by local real estate agents and have decided to begin buying homes at the foreclosure auctions or buying REOs from the banks.  They both have $50,000. to invest [...]

24Nov2009 | mf | 18 comments | Continued

Z1: Case Studies

Steve and Scott want to buy a small, 4 unit investment property. They will each live in a unit and they will rent out the other two units.  Steve is a Veteran. The home is located in a USDA approved area.  They have saved 10% for a downpayment. Which loan program would your group recommend [...]

24Nov2009 | mf | 18 comments | Continued

VA Loans

VA guaranteed home loans benefit veterans because they do not need to make a down payment and there is no upper limit or required cap on the income of the borrower.  Without a down payment as security against foreclosure, lenders receive a certificate of guaranty from VA.  In essence, as gratitude for honorable military service, [...]

24Nov2009 | mf | 15 comments | Continued

Hard/Private Money

A hard money loan is a specific type of asset-based loan financing through which a borrower receives funds secured by the value of a parcel of real estate. Hard money loans are typically issued at much higher interest rates than a traditional mortgage loan. Hard money is similar to a bridge loan, which usually has [...]

24Nov2009 | mf | 20 comments | Continued

USDA Loans

USDA Rural Development Loan home page
USDA Mortgage Loan Origination Handbook
USDA ActiveRain channel
USDA Fact Sheet
USDA Guaranteed

Section 502 loans are primarily used to help low-income individuals or households purchase homes in rural areas. Funds can be used to build, repair, renovate or relocate a home, or to purchase and prepare sites, including providing water and sewage facilities.
Eligibility: [...]

24Nov2009 | mf | 17 comments | Continued

How to Think About Ethics

What do you remember from your last Ethics class?
When I ask this question, the room falls silent.  Then maybe a lone person might shout, “honesty.”  Someone else might say “The Golden Rule.”  It’s easier to talk about ethics in smaller groups rather than one large group so when the classroom is divided up into smaller [...]

24Nov2009 | mf | 25 comments | Continued

Case Study: NAACP v. Novastar

Novastar and its mortgage broker Bell South Mortgage (Bell) conspired to maintain a policy of denying all loans secured by row houses in Baltimore and discouraged the referral of such business. Over a period of time, HUD sent shoppers to Bell/Novastar who were repeatedly treated differently based on protected characteristics of race, color, racial composition, [...]

24Nov2009 | mf | 26 comments | Continued

Case Study: Carnell v. KMC

Carnell, a self-employed 64 year old single man with no dependents, applied to KMC Mortgage Co. (KMC) to refinance a first and second mortgage and get cash to buy tools for his small business. Besides what he earned as a general handyman, he received Supplemental Security Income (SSI) for a disability. At application he talked [...]

24Nov2009 | mf | 25 comments | Continued

Are Loan Originators Professionals?

When I ask the question “Are loan originators professionals?” to a group of loan originator students in ethics classes, almost everyone says “yes.”  Anyone can do their job in a professional manner (adjective,) but not everyone is a Professional (noun.) Is your barista at Starbucks or the person who bags your groceries a professional? If [...]

24Nov2009 | mf | 23 comments | Continued

HVCC

Alright, here’s your chance to talk about the effects HVCC is having on you and your clients.  Technically, HVCC is not a federal law but the result of a joint agreement between Fannie Mae, Freddie Mac, the Federal Housing Finance Agency, and the New York State Attorney General. More on HVCC basics here.  Yet this has [...]

24Nov2009 | mf | 22 comments | Continued

FERA

From MGuire Woods:
“On May 20, 2009, President Obama signed into law the Fraud Enforcement and Recovery Act of 2009 (FERA). The new law is intended to expand the federal government’s capability to prosecute mortgage fraud, securities and commodities fraud, and other frauds related to federal assistance and relief programs, such as the Troubled Assets Relief [...]

24Nov2009 | mf | 24 comments | Continued

SAFE Act

From the NMLS:  “Title V of P.L. 110-289, the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (“SAFE Act”), was passed on July 30, 2008.  The new federal law gave states one year to pass legislation requiring the licensure of mortgage loan originators according to national standards and the participation of state agencies [...]

24Nov2009 | mf | 14 comments | Continued

RESPA Changes

RESPA Amendments Summary, 2009
Please note, the author of this blog post is Gordon Schlicke with edits and additions by Jillayne Schlicke
Copyright 2009
1. Effective Dates:
Mandatory use of the revised HUD-1 and 1A is effective the earlier of January 1, 2010, or whenever the revised GFE is first used for the loan transaction.  Any settlement service provider [...]

24Nov2009 | mf | 27 comments | Continued

TILA-MDIA

Truth-in-Lending Amendments
Regulation Z, Subpart C, Closed End Credit, Section 226.17,
General Disclosure Requirements
Effective July 30, 2009 
Please note, the author of this blog post is Gordon W. Schlicke
 
Sec 226.2
General Business Day Definition.  With regard to the timing of mandatory disclosures, the definition of a general business day is: “A day on which the creditor’s offices are open to [...]

24Nov2009 | mf | 22 comments | Continued

To The Students From the Nov 12, 2009 Comprehensive Class

Hi Everyone,
Here’s the follow up Q&As from our class last week:
Here’s the Neighborhood Watch website where you can see the WA State (well, actually all 50 states) list of the lenders and brokers with the highest default rates on FHA loans.
More concerning news on FHA’s capitalization problems. We should all be prepared for, and be an [...]

19Nov2009 | mf | 0 comments | Continued

To the Wa Financial Group Students

Hi Everyone,
Thanks for a thoroughly enjoyable class today and all your kind words in the evals.  Here’s the follow up:
Q: Where can I find out what interest rate the Fed will use so I can figure out if I have a high cost loan?
Here’s some insight from a great article by Blank Rome:
“…the measuring stick is the “average prime [...]

12Nov2009 | mf | 0 comments | Continued

To My Very Fun Students from the Nov 10, 2009 8 Hour LO Comprehensive Class

Hi Guys,
Here’s the follow up from today.
There’s a “general business day” definition which we use when sending out our EARLY disclosures and there’s a “precise business day” definition which we will use when counting the days after we’ve had to re-disclose prior to signing. See page 8 of this MBAA PDF.
Q: Where can I find [...]

11Nov2009 | mf | 0 comments | Continued

To the Students from the Oct 20, 2009 LO Comprehensive Course at Metro MGI Everett

Hi Everyone,
Thanks for coming to class. Here’s the follow up:
There’s a “general business day” definition which we use when sending out our EARLY disclosures and there’s a “precise business day” definition which we will use when counting the days after we’ve had to re-disclose prior to signing. See page 8 of this MBAA PDF.   Wells [...]

25Oct2009 | mf | 1 comment | Continued

To the Students from the Oct 5 WAMP 8 Hour LO Comprehensive Class

Hi Everyone,
Here’s the follow up from class.
Q: Do we have to resubmit our fingerprints?
A: Yes all LOs will be submitting a new set of fingerprints to the NMLS.
Q: Does a designated broker have to retake the LO exam?
A: Yes.
The name of the Northwest Multiple Listing Service Form that George referred to in class is NMLS [...]

23Oct2009 | mf | 0 comments | Continued
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