THE INFORMER Compliance and Regulatory News
SEPTEMBER 2013 1
THE INFORMER NEWS TO HELP INDUSTRY EXPERTS CREATE A STRATEGIC METHOD TO ACCOMMODATE NEW REGULATORY COMPLIANCE REQUIREMENTS
IN THIS ISSUE 4
CFPB: ARE YOU READY?
INDUSTRY NEWS 5 5 7 7 7 9 9 11
Proposed Risk Retention Rule FHA’s Oversight of Fannie Mae’s 2013 Settlement with Bank of America CFPB issues Final Ruling HUD Proposed Rule FNMA Servicing Notice FHFA Launches National Education Campaign NJ Flood Insurance Premiums Rising Banks Abandon Mortgage Preapprovals
10 Meet Bunk Wurth
A publication of ELM Services, LLC. Follow us on:
Our Company ELM Services, LLC (ELMS) was formed by a group of accomplished, well-respected leaders in the mortgage industry to provide a broad range of solutions to meet your needs. The principals and consultants of ELMS have an average of 20 years of experience in their chosen fields derived from executive positions in several private and public companies including: Goldman Sachs, Fannie Mae, FDIC, GE, First American Corporation, Bank of America, WAMU, Ocwen, and others. ELMS is dedicated to the needs of the mortgage industry, and we pride ourselves on our ability to provide world-class subject matter expertise in the areas of Foreclosure Claims Management, Credit Risk Solutions, Due Diligence and Technology Solutions. By combining a rare blend of experience, competencies and unparalleled service, ELMS has the capability to fully understand your business and the skill set to craft the best results for your firm.
Our Mission At ELMS, our mission is to provide state of the art Single Source Risk Management solutions which in turn allow our clients to maximize profits while minimizing risks.
Our Core Values At ELMS, these are the words we live by: Integrity. Quality. Leadership.
2014 CFPB Changes
The Mortgage Servicing Industry will experience major changes as a result of CFPB rulings beginning January 2014.
Are you Ready?
Effective January 10, 2014
Qualified Mortgage/Ability to Repay Rule Loan Originator Compensation TILA HPML Appraisals ECOA Valuations Escrows 2013 HOEPA Rule Servicing TILA Servicing RESPA
Effective March 18, 2014
Disparate Impact Rule
Do you need assistance with understanding and preparing for these changes? ELMS Services, LLC has knowledgeable staff available to help your company prepare for these industry changes. Contact Elm Services LLC for more information 1-877-303-3567 (ELMS)
INDUSTRY UPDATE Did you know that the Mortgage Bankers Association has a New Brand, New Logo and a New Street Address? Go to www.mba.org & update your records today! 4
INDUSTRY NEWS Agencies Request Comment on Proposed Risk Retention Rule (2013-287)
risk retention reproposal is being issued jointly by the Board of Governors of the Federal Reserve System, the Department of Housing and Urban Development, the Federal Deposit Insurance Corporation, the Federal Housing Finance Agency, the Office of the Comptroller of the Currency, and the Securities and Exchange Commission, in coordination with the Secretary of the Treasury. The original Dodd-Frank proposal generally measured compliance with the risk retention requirements
FHFA Office of Inspector General Evaluation Report: FHA’s Oversight of Fannie Mae’s 2013 Settlement with Bank of America (2013-288)
Office of Inspector General (OIG) reviewed FHFA’s approved $11.6 billion settlement between Fannie Mae and Bank of America. Their findings include that the FHFA should develop a standardized review process for compensatory fee settlements and mortgage servic-
based on the par value of securities issued in a securitization transaction and included a socalled premium capture provision. The agencies are now proposing that risk retention generally be based on fair value measurements without a premium capture provision. The new proposal equates Qualified Residential Mortgage (QRM) to the definition of a Qualified Mortgage (QM), as defined under the rule that the CFPB recently finalized. Securitizations of QRMs are exempt from risk retention. The QM rule does not include underwriting based on credit history, LTV, or down payment. It does include an analysis of the boring rights transfers. In addition, the FHFA should engage policy and supervision staff earlier in the approval process and link checklists to documentation showing the applicable requirements were satisfied. The FHFA has
rower’s ability to repay, with a maximum DTI of 43 percent. In addition, the QM definition prohibits some types of loans and certain loan features, such as interest-only loans, balloon payments, or negatively amortizing loans. QM allows exceptions for rural lenders or small lenders, and allows loans that meet GSE underwriting standards to qualify for QM status, even with DTIs above 43 percent. The agencies are requesting comment on the revised proposed rule by October 30, 2013. Full News Release:
http://www.sec.gov/News/ PressRelease/Detail/ PressReagreed to enact OIG’s recommendations by January 31, 2013. Full News Release: http://
Advertise Your Business with THE INFORMER Get the attention of the Mortgage Servicing Industry at Reasonable Rates! Click here for more information! 5
About Anchor Risk Management, LLC. Anchor Risk Management, LLC. was formed by a group of accomplished, well-respected leaders in the mortgage and technology industry to create a new paradigm in Default Mortgage solutions and Cloudbased Workflow applications. The principals and consultants of Anchor have an average of 20 years of experience in their chosen fields derived from executive positions in several private and public companies including: Goldman Sachs, Fannie Mae, FDIC, GE, First American Corporation, Bank of America, WAMU, Ocwen, and others.
Introducing our Cloud-based Claims Management System! Anchor Risk Management, LLC. Is proud to announce the availability of our Claims Management System . Key features of the system are:
Cloud-based Claims Processing system – eliminates the need for any software or hardware purchase or internal implementation
Configurable Workflow – allows for customization of process to match internal process flows
Role Based Dashboard Configuration lets you decide what functions and maintenance utilities are available for each user
Role-based security model allowing tiered access to all steps within customized workflow
Edit checks and customizable business rules to provide high data accuracy rates Compliance notifications and messaging so processors stay up to date on regulations
The Bureau of Consumer Financial Protection (CFPB) issued a final rule under the Equal Credit Opportunity Act, Real Estate Settlement Procedures Act, and the Truth in Lending Act amending and clarifying its January 2013 mortgage rules.
Topics in the rule include:
Clarifying the scope of activ-
HUD Proposed Rule: Housing Counseling Program: New Certification Requirements
Housing Counseling Program provides, through HUD -approved counseling agencies and state housing finance agencies, including their affiliates and branches, counseling to individuals seeking information about financing, maintaining,
ities prohibited during the 120-day ban on foreclosure referral.
Addressing the process for correcting mistakes that may occur when servicers perform initial completeness evaluations of loss mitigation applications, but later discover the application was incomplete. Facilitating the ability of servicers to offer short-term forbearance plans. Clarifying the definition of a
renting, or owning a home. The Dodd-Frank Wall Street Reform and Consumer Protection Act amended the housing counseling statute to improve the effectiveness of the program by, among other things, requiring that the entities and individual counselors be certified by HUD as competent to provide such services, and prohibiting distribution of grant funds to agencies found in violation of Federal election laws or who have employees found in viola-
Facilitating lending by certain small creditors, including those predominantly operating in rural or underserved areas.
Clarifying application of the prohibition on creditors financing credit insurance premiums.
Slightly revising effective dates of several provisions of the Loan Originator rule.
Full News Release: http:// files.consumerfinance.gov/ tion of Federal election laws, and requiring the reimbursement of grant funds for misuse of funds. This proposed rule would revise HUD's Housing Counseling Program regulations to adopt the new requirements applicable to counseling agencies and individual counselors, and the use of grant funds. Full News Release: https:// www.federalregister.gov/ articles/2013/09/13/2013-
FNMA Servicing Notice: Updates to Allowable Foreclosure Time Frames
Fannie Mae is adjusting the maximum number of allowable days for routine foreclosure proceedings for three states (Nevada, Washington, and New Mexico), effective for foreclosure sales on or after September 1, 2013. Full Foreclosure Timetable: https://www.fanniemae.com/content/guide_exhibit/foreclosuretimeframes-compensatory-fees-allowable-delays.pdf 7
Martin, Leigh, Laws & Fritzlen P.C. Banking and Creditorsâ€™ Rights Litigation Corporate and Business Law Real Estate Transactions
1044 Main Street, Suite 900 Kansas City, MO 64105 Tele: 816.221.1430 Fax: 816.221.1044
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6800 West 64th Street Overland Park, KS 66202 Tele: 913.671.3464 Fax: 816.221.1044
http://www.mllfpc.com/ What was the first law passed by the U.S. Senate in 1779? 8
FHFA Launches National Education Campaign
their current lender or any other mortgage lender offering HARP refinances to review their refinancing Options.
Federal Housing Finance Agen-
Borrowers affected are those that have been making their mortgage payments but owe more on their home than it’s worth.
cy (FHFA) launched a nationwide campaign to inform homeowners about the Home Affordable Refinance Program (HARP). The campaign is designed to encourage homeowners to contact
As part of this campaign, FHFA has launched a new website, www.HARP.gov, and is working
NJ Flood Insurance Premiums Rising
with mortgage companies across the U.S. and HGTV personality and star of "Power Broker" Mike Aubrey to help reach homeowners who may qualify.
Full News Release: http:// www.bloomberg.com/ article/2013-09-23/ av0TUA9Jxw4E.html
reform-act-2012 Watch the video below from the Flood Insurance Forum that explains the history of NFIP and also provides details on the premium changes that will be phased in beginning 2013:
If you are a resident of New Jersey, and you own
a property that is located in a mandatory flood zone, you could soon see an increase of 25% in flood insurance premium's.
In July 2012, Congress passed the Biggert-Waters Flood Insurance Reform Act of 2012. This act called on FEMA (Federal Emergency Management Act), to make changes to the way NFIP is run. The following are key provisions of the legislation: Raise rates to reflect “true flood risk”, Make the program more financially stable, Change how Flood Insurance Rate Map (FIRM) updates impact policyholder For Full Details, along with Q &A about this reform act visit:
THE INFORMER A Publication of ELM Services, LLC. Corporate Offices:
10801 Mastin Boulevard. Suite 600 Overland Park, KS 66210 1-877-303-ELMS
The OATH ACT
Meet Bunk Wurth!
lec (Bunk) Wurth grew up in Orange, California. At 36, Bunk was an excellent and dedicated special education teacher, a strong athlete, a committed friend, and a devoted son and brother.
For more information about the work that Bunk Wurth offers to the world, watch this video from Fox News: http://youtu.be/TYadVuec_Do
Bunk sustained a serious spinal cord injury while playing in a rugby match on February 25, 2006 in Southern California. The C4 and C5 vertebrae were dislocated into his spine, and he immediately lost all movement and sensation from the shoulders down. Initially, Bunk was able to move his shoulders and breathe on his own; however, since the surgical repair to the vertebrae and in the weeks following the injury, bruising elevated up the spine to the C2 level, which is currently rendering him unable to breathe on his own and dependent on a ventilator. Family, friends, and especially Bunk are confident that through his hard work and determination, the unconditional support of his family and friends, a strong faith, sincere prayers and modern medicine, Bunk will recover. Bunk has never faltered in maintaining the clear vision of his full recovery and healing. Visit his website at: Through this ordeal Bunk has proven to be an inspiration to everyone around him. Around the age of 15 or 16, Bunk took an interest in painting the American Flag. The accident and his inability to walk did not discourage him from continuing with this gift that he shares with students at the Speech and Language Development Center in Buena Park, a school for young adults with language and behavioral disorders. Wurth did not let his injury stop him from painting. He currently cannot use his hands to paint, so he paints with a tool designed for him to guide a paintbrush with his mouth.
Banks Abandon Mortgage Preapprovals. What the decline of preapprovals means for homebuyers
preapprovals reassure prospective home owners that the American dream is r e a c h a b l e . According to research provided by Anamaria Aandriotis of Dow Jones to Mortgage Watch , “ Preapprovals accounted for 4% of purchase mortgages
that were originated by these lenders last year, down from 9% in 2007”. Housing experts, however, say the decline in preapprovals is largely due to dwindling competition among mortgage lenders for new clients. “Prior to the recession, lenders used preapprovals as way to attract would-be borrowers. Buyers who had this commitment from a lender were more likely to turn to this company when they were ready to get the actual mortgage, “ says Keith Gumbinger, Vice Presi-
dent at mortgage-info HSH.com.
Based on information provided in this report a more detailed pre-qualification provides a “conditional approval” in the home buying process. This process is more common, although there is no written commitment, it allows the borrower to know where they stand in homeownership. Full News Release: http:// www.marketwatch.com/story/ banks-abandon-mortgagepreapprovals-2013-10-02
Winter is Approaching! What does Farmer’s Almanac say about your region?
THE INFORMER A Publication of ELM Services, LLC. Corporate Offices: 10801 Mastin Boulevard, Suite 600 Overland Park, KS 66210 1-877-303-ELMS www.elmservices.com