The Calm Before the Storm By Laurie Spira
APRIL 2012
HAWAII MORTGAGE PROFESSIONAL MAGAZINE
NationalMortgageProfessional.com
32
The Dodd-Frank Wall Street Reform and Consumer Protection Act (the Act) was signed into law on July 21, 2010. More than 800 pages long, the Act requires a rulemaking process that could take as long as five years and could result in as many as 250 rules from 20 different regulatory agencies. Mortgage lending professionals are especially interested in the progress being made on implementing the requirements of Title IX, which addresses credit risk retention for asset-backed securities; Title X, which establishes the Consumer Financial Protection Bureau (CFPB); and Title XIV, the Mortgage Reform and Anti-Predatory Lending Act. Although some of the Dodd-Frank Act requirements have been implemented in the almost two years since the Act was signed, the most significant impact is likely to be felt in the next 18 months. By July 21, 2012, the CFPB is required to propose rules and model disclosures that combine the disclosures required under the Truth-in-Lending Act (TILA) and Sections IV and V of the Real Estate Settlement Procedures Act (RESPA) into a single, integrated disclosure. Consumers and the industry (including the members of DocMagic’s Compliance Department) have been actively involved in reviewing prototype disclosures through the CFPB’s “Know Before You Owe” project, which put draft disclosures online to obtain public input. The CFPB has also conducted consumer testing and is currently engaged in a Small Business Regulatory Enforcement Fairness Act (SBREFA) panel process, which will examine the impact of the proposed disclosure changes on small businesses. The prototype disclosures and the SBREFA documents suggest that the proposed rule and model disclosures will be a significant departure from the current TILA and RESPA disclosures. In addition to the requirement to combine the current TILA and RESPA disclosures, Title XIV of the Act amends TILA and RESPA to require new disclosures that must be provided in the Loan Estimate or Settlement disclosures. Title XIV also adds other new disclosure requirements that aren’t specifically included in the Loan Estimate or Settlement Disclosures. Title XIV provides that these regulations or amendments to the consumer law must be final by Jan. 21, 2013, with an effective date not later than Jan. 21, 2014. Although the CFPB has stated a belief that final regulations implementing these Title XIV disclosures simultaneously with the final TILA-RESPA rule would improve the overall effectiveness of the disclosures, it may not be possible to issue a final TILA-RESPA rule by Jan. 21, 2013. Accordingly, the CFPB is considering a proposal to use its authority to exempt lenders from the Title XIV disclosure requirements temporarily until the TILA-RESPA disclosure rule takes effect. Until the TILA-RESPA rule is proposed, though, the industry cannot know exactly what to be prepared for, and what the effective date is likely to be. Until final regulations are implemented, during this calm before the storm, those persons in operations, compliance and risk management can prepare for what might be, based on what we all know today. For example, the business of planning systems and policy updates may begin now. In addition, for those with proprietary systems, new data points that may need to be collected to complete the TILA-RESPA disclosures based on previously published prototypes could be identified. Whatever preparations you can start today will better protect you from the storm of regulations that lie ahead. Laurie Spira is chief compliance officer with Torrance, Calif.-based DocMagic Inc. She may be reached by phone at (800) 649-1362, ext. 6446 or e-mail laurie@docmagic.com.
Sponsored Editorial
360 Mortgage Group Adds Closing Doc Functionality to Its Broker Network 360 Mortgage Group has announced the release of Broker Docs, a closing document clearing functionality now available online to all 360 Mortgage Group brokers. This new feature to 360 Mortgage Group’s suite of proprietary online origination tools is expected to shorten closing time by at least 50 percent. Developed by 360 Mortgage Group Chief Operating Officer Andrew WeissMalik, Broker Docs automatically and instantaneously delivers closing instructions to a closing agent whenever a broker submits a documentation order request and a “Clear to Close” has been issued within the file. This allows closing agents to work on a file prior having a 360 Mortgage Group closer review it, thereby reducing the time required to close a file. “Instead of having to wait on our staff to process a doc order request and deliver closing instructions to the closing agent, now the originator stays in control of the delivery of closing instructions,” WeissMalik said. “As far as we can tell, no other wholesale lender is offering this kind of tool to its brokers.” The development of Broker Docs is the latest in a series of proprietary tools 360 Mortgage Group has developed to empower its brokers to complete as much of the origination process as possible. Previous advancements include the development of FHA Connection, which allows 360 brokers to pull case numbers directly from FHA’s portal, and an online chat tool that instantly connects brokers to a 360 account executive. “360 Mortgage Group does not hire anyone it can’t explicitly trust to deliver zerodefect, salable loans,” WeissMalik said. “We have built our technology platform with an eye towards putting as much control as possible in the hands of our brokers, and our miniscule default rate demonstrates that trust has not been misplaced.”
mented Fannie Mae’s HARP 2.0 program requirements with Unlimited LTV/CLTV. UWM was one of the first lenders to implement the government’s adjustments to HARP 2.0 when it went into effect Dec. 1, 2011, and now they have effectively implemented the expansion of HARP 2.0 into their Easiest Application System Ever (EASE) broker portal. “With the heavy volume of HARP 2.0 submissions that we are receiving, UWM has not faltered in providing superior customer service, communication and consistency,” said Mat Ishbia, president at UWM. “Our swift implementation of HARP 2.0 is proof that UWM’s exceptional staff can meet and exceed broker expectations in all areas of operations and with every product offering. At UWM, we want to make it as easy as possible to do business with us; investing in resources to quickly implement HARP 2.0 for our brokers was atop the priority list. This high level of service and speed to market holds true to our companywide mantra of ‘Lending Made Easy.’” In addition to HARP 2.0, UWM recently rolled out The Big & Easy, a true jumbo loan up to $2.5 million, as well as the ability to help their brokers become bankers by issuing a correspondent line. To round out their spectrum of product offerings, USDA will be available in April 2012.
Rates in Motion Gets Web Makeover
Rates in Motion, a free daily video blog that serves as an educational resource for consumers shopping for mortgages, announced that it has renovated its Web site. “The improvements align with Rates in Motion’s philosophy to be consumerfriendly,” said Rates in Motion owner, host and mortgage expert, Mike Cox. “The Web site presents sometimes technical information in a more easy-tounderstand format. Getting a mortgage United Wholesale can be very complicated and someMortgage Unveils HARP times very frustrating so we wanted to 2.0 Unlimited LTV/CLTV improve upon the experience.” Implementation With DU Cox said the enhancements are United Wholesale Mortgage (UWM) has designed to make it more convenient announced that it has for consumers to: Subscribe to the daily successfully imple- blog easier; subscribe to comments on