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 refinance transactions.  Here’s a link to the updated settlement costs booklet.

There was a question regarding TILA’s madate that the broker/lender be sure the borrower can repay the loan. Go to this page and scroll down to prohibited acts:

“(4)  Repayment ability.  Extend credit subject to § 226.32 to a consumer based on the value of the consumer’s collateral without regard to the consumer’s repayment ability as of consummation, including the consumer’s current and reasonably expected income, employment, assets other than the collateral, current obligations, and mortgage-related obligations.”

There was a question about the Equal Credit Opportunity Act as to whether the following is in ECOA:

“(6) For purposes of this subsection, the term “adverse action” means a denial or revocation of credit, a change in the terms of an existing credit arrangement, or a refusal to grant credit in substantially the amount or on substantially the terms requested.”

To read the statute click here and scroll down to Prohibited Discrimination; Reasons for Adverse action.  Go to 701.(d) 6 to read the above sentence.

Also from ECOA there was a question to pls confirm as to how long a creditor must retain the files after adverse action: 25 months as noted on the quiz is correct.  Pls google the phrase “adverse action forms must be retained for 25 months” and you’ll have over 10 pages of possible references.

There was a question regarding the Fair Credit Reporting Act and the consumer being prohibited from seeing the scoring method.  Here you go (link opens PDF.)

See Section 609(a)(1)(B)

and (f)(5)(A)
“the consumer reporting agency shall provide the consumer with the name and address and website forcontacting the person or entity who developed the score or developed the methodology of the score.”

CRAs can refer people to FICO but cannot give the consumer FICO’s algorythm.  They talk about the credit score model again in (f)(7) but notice they are not referring to the methodology.  A subtle but important difference.

One student was not sure that the “authorized user” changes were already in effect regarding ppl letting others use their tradelines to bump up your credit score.  Here you go.

On to the SAFE Act. Go here.  Download Title V of PL 110-289. Questions regarding processors and underwriters are on page 7.  Confirmation that there are only 3 takes before the 6 month waiting period kicks in can be found on page 10.

I did find that email from DFI I referenced earlier and I was wrong about one of the deadlines. If an LO who holds an existing licensed does not complete 20 hours of WA DFI approved education by May 31st, they definitely have to take the 20 hour class and I thought it had to take place right away…instead they’ll have until Dec 31st to take that 20 hour course (plus a 2 hr course on Wa St law.)  In that email, I was hoping I’d find the answer to the great question about producing MBs (who hold an existing MB and also an LO license.) The question is whether MBs need to make sure they take 9 hours of CE sometime between now and the end of 2010.  I am very sure I’ve asked this question before of DFI and I thought I had the answer saved in my email archives but it’s not there….perhaps DFI never got back to me last month, which is why I’m not seeing the answer in my head (wow, listen to how I’m talking. I really do store memories in pictures.)  So I’ve sent a second email to my favorite guy at DFI asking for an answer. I’ll let you know when he responds and I’ll probably put it inside one of my regular monthly email updates for everyone.

That’s all I have on my list of Q&As! Thanks for a fun class today and keep studying!