credit repair and mortgage lenders continued from page 59
By Melanie A. Feliciano Esq. The Federal Housing Finance Agency (FHFA) announced that, except for 18 counties in which high-cost area loan limits have increased, the 2014 maximum conforming loan limits for first-lien and second-lien loans will remain unchanged from the maximum conforming loan limits for 2013. For more detailed information about conventional conforming loan limits for 2014, please refer to Fannie Mae’s Lender Letter LL-2013-09 [link to https://www.fanniemae.com/content/announcement/ll1309.pdf] and Fannie Mae’s Web site here [link to https://www.fanniemae.com/singlefamily/loan-limits]. Effect on certain high-cost tests Anytime there is a change in the conforming loan limits, the following state high-cost tests can be impacted: California, the District of Columbia, Georgia, Indiana, Maine, New Mexico, New York, North Carolina, Tennessee, Texas and South Carolina. Specifically, the rules governing the applicability of these states’ high-cost tests are determined in part by reference to the then-current conforming loan limits. Note that for both North Carolina and Tennessee, the Fannie Mae conforming loan limits will have no impact on their respective high costs tests.1 Except for the addition of Dutchess and Orange Counties to New York’s high-cost area conforming loan limit of $625,500, the applicable loan limits in 2014 for one-unit properties in the states and counties listed below will remain at $417,000, unless noted below: California
$463,450: Alpine $474,950: El Dorado, Placer, Sacramento & Yolo $477,250: Nevada $483,000: Monterey $520,950: Sonoma $529,000: Mono $546,250: San Diego $561,200: San Luis Obispo $592,250: Napa $598,000: Ventura $625,500: Alameda, Contra Costa, Los Angeles, Marin, Orange, San Benito, San Francisco, San Mateo, Santa Barbara, Santa Clara & Santa Cruz
District of Columbia
$625,500
Georgia
Greene County: Conforming jumbo loan limit is $515,200
New York
$625,500: Bronx, Dutchess, Kings, Nassau, New York, Orange, Putnam, Queens, Richmond, Rockland, Suffolk & Westchester
Footnote 1—The North Carolina High-Cost Home Loan Law applies to a loan if, among other things, the principal amount (or the maximum credit limit in the case of an open-end loan) of the loan does not exceed the lesser of $300,000, or the Fannie Mae conforming loan limit for a single-family dwelling. The Tennessee Home Loan Protection Act applies to a loan if, among other things, the principal amount of the loan does not exceed the lesser of $350,000, or the Fannie Mae conforming loan limit for a single-family dwelling.
Melanie A. Feliciano Esq. is DocMagic Inc.’s chief legal officer and currently serves as editor-in-chief of DocMagic’s electronic compliance newsletter, The Compliance Wizard. She received her JD from the Georgetown University Law Center, and is licensed in California and Texas. She may be reached by phone at (800) 649-1362 or e-mail melanie@docmagic.com.
Terry W. Clemans is executive director of the National Consumer Reporting Association (NCRA). He may be reached by phone at (630) 539-1525 or e-mail tclemans@ncrainc.org. SPONSORED EDITORIAL
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n Oklahoma Mortgage Professional Magazine n FEBRUARY 2014
of what credit repair firms charge and include a new report, a new score and the report is reissued into the automated underwriting system of the lender’s choice. Another major distinction in this is also that the consumer is prohibited from being charged for credit rescores. Mortgage originators should know that their contracts to purchase credit reports, in the section about rescoring, will contain language that clearly prohibits consumers from being charged—either directly or indirectly—for rescoring fees. Please note that in all the FTC and state AG notices about scam credit repair firms, there are no listings about credit rescoring in them. For the past 12 years, I have worked closely with several attorneys at the FTC and with the Consumer Financial Protection Bureau (CFPB) since its creation, and none have ever suggested that credit rescoring is remotely like credit repair. While the credit reporting system is not perfect and errors do occur, those errors are most often quickly corrected through legitimate means. Despite some uninformed claims, credit report accuracy is not subjective. The debt is either paid or it’s not paid, and the payment was either on time or it was late. The research can be done to document the real story and attempts to fool the lender to try to distort actual payment history are scams and there is no subjectivity to that. The reason that there are different accounts reported to the three national credit bureaus is due to FCRA not requiring creditors to report to the credit bureaus at all as reporting is completely voluntary. If a creditor chooses to report, they report to the bureau or bureaus of their choice. The differences in the creditors and the data they provide each bureau are from that voluntary nature of our system, but the data accuracy is certainly not subject in Federal law. One of the industry’s biggest problems, one that holds back the level of data accuracy is the very existence of credit repair companies. Preying on desperate consumers who are looking for a quick fix and disputing known accurate data in hopes that the creditor has made a mistake in their documentation, is manipulation of the system. Do yourself a favor and don’t refer consumers to entities that every U.S. AG office warns their citizens about. Your reputation, a loan buyback, and potentially, your entire career, will be at risk.
NationalMortgageProfessional.com
problems associated with credit repair. In addition, manipulating a consumer’s true credit risk, credit repair costs the banking industry millions of dollars in wasted resources from the constant re-verification of accurate data repeatedly being disputed by credit repair firms. Technicalities are not needed to correct a legitimate error, they are only needed to try to distort factual information and are why the credit repair industry has the reputation it does. Finding similarities in the comparison to credit repair to credit rescoring provided by mortgage credit reporting companies can only be done by someone who has no idea what each program actually is. Mortgage credit reporting companies are much more than just customers of the credit bureaus, they are consumer reporting agencies under the Fair Credit Reporting Act (FCRA) with most of the exact same obligations to the consumer and lender as the national credit bureaus. They do much more than simply provide credit data in an easy-to-read format, and many of the differences have been documented in my previous articles on this subject. Another one of the incorrect claims about credit repair is that these agencies are competition to credit rescoring. This is completely false as the credit reporting industry is required by the FCRA to correct all errors for FREE and the industry does this countless times on a daily basis. If there is an error on a credit report, the industry corrects those for free, regardless of the source of the error. If the error is on a trade line created by the mortgage credit reporting agency (a manually verified rental, or non-traditional account added to the report), then the mortgage credit reporting agency will correct that data and provide a new report with the updated information to the mortgage lender, free of charge. If the error is from information provided from one of the national credit bureaus, the mortgage credit reporting agency will pass the consumer dispute onto the national credit bureau with the error on behalf of the consumer at no charge. If the mortgage originator requires changes to the credit report on an expedited basis—with the credit report updated at the national level so a new credit score can be calculated and then reissued into an automated underwriting system rather than waiting for free consumer disputes to take effect (this could take up to 45 days)—then rescoring fees will apply. But that is at the choice of the mortgage originator. The charges for that expedited service are also a fraction of the cost
No Changes to 2014 Conventional Loan Limits