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Nov
04
2010

MCA Monthly Compliance Update – November 2010

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MCA Monthly Update

November 2010

In This Issue
Webinar Q & A
HUD/FHA Update
Fannie Mae Update
Freddie Mac Update
VA Update
Our Services

Lending Manuals

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Welcome to the MCA Monthly Compliance Update. To help you stay compliant and up-to-date, our newsletters contain compliance tips and updates. We hope that you find the content informative and useful. As always, your feedback is appreciated.


Join our free monthly webinar “Reviewing Red Flags of Fraud.”


We have posted the slides from last month’s webinar on our website. You can find slides from every webinar on our website under the News & Resources tab.


Webinar

Review common mortgage fraud issues and the FTC’s Red Flags Rule enforced 12/31/10.


Join our free webinar on Thursday, November 18 at 12:00 p.m. MST.



Reserve your webinar seat now at:


Register Now




The December 31st enforcement date is fast approaching for the Federal Trade Commission’s Red Flags Rule. Join us for a free webinar on November 18, where we will have a review of common mortgage fraud issues, as well as valuable information and a Q&A session about the FTC’s Red Flags Rule. (It should be noted that the extension of the enforcement deadline to December 31, 2010 does not affect other federal agencies’ enforcement of the original November 1, 2008 deadline.) We hosted a webinar in May about the red flags of fraud, and this month’s webinar will update the information and discuss any new developments.



This free webinar is open to everyone, and we encourage you to submit your questions during registration or to info@mortgagecomplianceadvisors.com.

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For real time compliance news, you can now follow us on


Webinar Questions and Answers


We want to thank everyone who attended our webinar: “Managing the Year of Change.” As promised, we have posted the slides and answers to the questions asked.



We have included the first three questions below. *Please visit our website to read all 7 questions and answers.


Question 1 – You have stated that MDIA defines an application the same way as a GFE. So, you are saying that if we do not disclose a GFE because we do not have all of the pieces, then we do not have to issue the TIL either?

  • Answer – Yes. This is correct. TILA/MDIA shares RESPA’s definition of an application. If you do not have what is defined as an application then you are not required to disclose a TIL statement. This can be found in 12 CFR 226.19 for the Truth in Lending Act.


Question 2 - The Dodd 1 yr GFE and TIL combined implemented from what effective date?

  • Answer – The effective date is 1 year after transfer. That would be July 22, 2011. However, there is already a working copy going around, and I would expect it to be implemented well before this date.


Question 3 – I had a question related to the LO compensation that we discussed in webinar today. Changing LO compensation is a fairly easy regulation to comply with. It requires a change to the existing mind set, but logistically, it is not difficult. The requirement is to pay the LO based on total volume as a percentage or flat fee per until or some other method that doesn’t result in steering the borrower to an undesirable product.


Ok, so I’m with the regulators so far. Then, here is where I get lost. The regulation also says that companies that broker loans are also subject to the regulations. Ok, so now a brokerage firm or even a lender when acting as a broker also can not be paid differently for different pricing tiers or loan programs? So, effectively investors have to stop by brokerage firms how they are currently paying them. It is not simply paying the loan officer appropriately, but you also have to change the way you pay the firm. The interesting part is that secondary market transactions are exempt, so investors can still pay lenders but not brokers in spread premiums that change with loan program. So, it appears that the regulation much like RESPA is trying to put brokers at a competitive disadvantage. Am I understanding this correctly?

  • Answer – Yes, according to the rule, an originator is a loan originator and a broker company. Therefore, a broker company cannot be compensated based on the terms of the loan.

HUD/FHA Update

ML 2010-35: Borrower Certification for FHA Refinance of Borrowers in Negative Equity Positions


- Announces that mortgagees must obtain signed certification form from borrower if underwater borrower is refinancing. View the entire letter


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- Eliminates requirements that sum of all liens not exceed geographical max mortgage limit for both purchase and refinance transactions. View the entire letter


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To view all HUD Mortgagee Letters for the year, visit HUD’s website.


Fannie Mae Update

*To view an announcement, visit https://www.efanniemae.com/sf/guides/index.jsp.
Click “2010” on the right, under “Announcements and Lender Letters.” You will then have access to all 2010 announcements.


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- Announces Appraiser Independence Requirements, which replace HVCC. Effective immediately.  Announcement on eFannieMae.com


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- Announces misc. servicing policy changes, including:

  • Retirement of Payment Reduction Plan
  • Clarification of mandatory pre-filing mediation policy for mortgage loans in Florida
  • Waiver of escrow deposit accounts
  • Flood insurance requirements
  • Submissions of underwriting and servicing review files


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- Provides guidance to servicers for interactions with Hardest Hit Fund Unemployment and Reinstatement Programs.  Announcement on eFannieMae.com


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To view all Fannie Mae Announcements and Letters for the year, visit


Freddie Mac Update

*To view an announcement, visit http://www.freddiemac.com/sell/guide/. The bulletins and industry letters are on the right.


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- Announces Appraiser Independence Requirements, which replace HVCC
- Makes changes to requirements regarding:

  • Property eligibility
  • Credit
  • Eligibility requirements for Freddie Mac counterparties
  • Operational
  • Mortgage insurance


Bulletin on FreddieMac.com


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- Announces that Freddie Mac will accept insurance from State Farm Florida Insurance Company…  Bulletin on FreddieMac.com


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Provides guidance to servicers for interactions with Hardest Hit Fund Unemployment and Reinstatement Programs. Bulletin on FreddieMac.com


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-  Announces that servicers may not refer any new Freddie Mac foreclosure or bankruptcy cases to Law Offices of David J. Stern, P.A. in Florida. Bulletin on FreddieMac.com


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To view Recent Freddie Mac Bulletins/Industry Letters, visit Freddie Mac’s website.

VA Update


- Announces enactment of Veterans’ Benefits Act of 2010

  • Changes to funding fee exemption status
  • Creation of Specially Adapted Housing (SAH) assistive technology grant program


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To view VA Circular/News for 2010, visit the VA website.


Feel free to call us with any questions at 877-226-3216 or reply to this email.

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