Category: Federal Law
Federal Reserve Board Rules on LO Compensation Prohibitions Aim to End Predatory Lending
Under the final Federal Reserve Board’s loan originator (LO) compensation rule, effective April 1, 2011, an LO may not receive compensation based on the interest rate or loan terms. This will prevent LOs from increasing their own compensation by raising the consumers’ rate. LOs can continue to receive compensation based on a percentage of the [...]
View PostLO Compensation Limits Coming in 2011!
In order to understand all the whining taking place by loan originators (LOs) about compensation limits under the Dodd Frank Wall Street Reform Act as well as the Federal Reserve Board that go into effect in 2011, it’s important to lay down some background for consumers. During the predatory lending days (which I like to fantasize [...]
View PostDodd-Frank Wall St Reform Act Will Limit Loan Originator Compensation
The Merkley Amendment to the Wall Street Financial Reform legislation limits loan originator compensation to no more than 3 percent of the loan amount. If you want to debate the Merkley amendment, please visit this thread or this thread. From the Mortgage Banker’s Association, here is a summary of how loan originator compensation would be limited under [...]
View PostTo the Students from the May 21, 2010 Exam Prep Course in Renton, WA
Hi Everyone, Here’s the follow up Q&As from today’s class. Although here HUD references that the Special Booklet regarding settlement costs should be provided for purchase money loans, here on this page (#27) HUD says the booklet is to be given out 3 days from the date of the application and doesn’t include or exclude [...]
View PostMerkley-Klobuchar Amendment Creates Level Playing Field
The Senate has passed an amendment to the Wall Street Reform bill that would ban loan originators from accepting compensation based on placing a consumer in a higher interest rate loan or a loan with less favorable terms. The amendment also requires lenders to underwrite loans to assure a homeowner’s ability to repay the loan. [...]
View PostMortgage Lead Generation Firms Continue to Violate Federal and State Laws
So here we go again. Now that mortgage rates are headed up, the deceptive lead generation ads are crawling back onto the web. Here’s a great example from a Google ad: FHA Refinance 4.0% Fixed $160,000 FHA mortgage for $633/mo. No SSN req. Calculate payments now! MortgageRefinance.LendGo.com When clicking through, the lendgo.com lead generation site asks [...]
View PostNew 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 [...]
View PostHVCC
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 [...]
View PostFERA
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 [...]
View PostSAFE 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 [...]
View PostRESPA 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. [...]
View PostTILA-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 [...]
View PostLO Education Requirements under the SAFE Act
2009 is a transition year for course providers. The National Mortgage Licensing System (NMLS) folks in WA DC will eventually take over licensing, testing, and education as per the SAFE Mortgage Licensing Act. Course providers approved by WA State DFI will still be offering courses during the fall of 2009. However, it is very important [...]
View PostA Critical Analysis of the New Good Faith Estimate
With this blog post I’d like to introduce a new contributing author on the NAMF blog. Bradley Allen, CFP, of Coast Capital Management has been at the forefront of the fiduciary movement for mortgage brokers and loan originators in Washington State. His comments and ideas articulate a future vision of the mortgage brokerage industry where higher [...]
View PostNational Loan Originator Licensing coming….For ALL LOs
Tucked inside the Foreclosure Rescue Bill signed by the President yesterday is a provision calling for all loan originators to be licensed. Bankers, brokers, consumer loan lenders, and credit unions; it doesn’t matter where you work. If you’re an LO you must pass a competency test that will be developed by the National Conference of [...]
View PostNational Loan Originator Licensing
The “Federal Housing Finance and Regulatory Reform Act of 2008? is here. Read the PDF if you’re feeling ambitious or here is the summary of the Dodd amendment. There’s a section inside Senator Dodd’s amendment that will give us national loan originator licensing. On page 34, the definition of a loan originator is as follows: LOAN ORIGINATOR A) IN [...]
View PostInteresting insight on defaults of downpayment assistance program loans from the recent FHA training
I attended an FHA training this week sponsored by the Washington Mortgage Lenders Association. There were about 100 people in the training. A large percentage of the audience was not from the greater Seattle area. People had come from as far away as eastern Washington, Idaho, Montana, Oregon, California, New Mexico, and even Guam. Most [...]
View PostFederal Housing Finance Regulatory Reform Act of 2008
The new bill from Senator Dodd is out. Here’s the PDF and here is the Dodd amendment. The original bill is 387 pages long and contains provisions for national loan originator licensing, puts a limit on golden parachutes, establishes a “federal housing finance agency,” and a big bucketfull of other changes including helping out the affordable housing [...]
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