We have updated our Quality Control Data Validation checklist to conform to the organization of the redesigned URLA, which was required for use after 4/1/2021.  Best Practice - Send for Signature, Not in Blank The new Uniform Residential Loan Application (1003) form is required for SUBMISSION to Fannie Mae. It is NOT useful as a form to be sent to an applicant to collect information. In fact, there are areas in the form which explicitly state "TO BE COMPLETED BY LENDER" which belies the actual intent of the form.  Send this document to your customer for completion at your own peri ..read more

We have seen an uptick of inquiries from our customers who engage with several national wholesalers. At the root of the inquiry is the reviewer asking the customer to locate items in the QC Plan. To forestall this we wanted to show you what a standard response looks like. More than this, though, is an understanding of the terms. Our plans are all delivered in Word format. This means you can easily search them for a particular phrase. The problem is that the reviewers aren't using standard QC nomenclature. Key phrases include:  Independence - does the plan show that reviewers are not invo ..read more

QM - What Changed? Abandon Appendix Q  Rate Threshold Determination for QM Status: 2.25% Seasoned QM for performing loans > 36 months 4 month either/or GSE status patch - use either old or new guidelines What didn't change Compensation limits Loan type constraints Transaction exemptions Qualifying rate At the core of the Qualified Mortgage (QM) rules is the issue of the borrower's ability to repay. One of the most significant effects of the Trump Administration's housing policy efforts was shepherding the GSEs (Fannie Mae and Freddie Mac) out of the business of providing governme ..read more

Vague Company Licensing Requirements can Cause Confusion With the surge in the mortgage demand, we see many new companies throwing their hat in the ring to become a licensed provider. For the uninitiated, prepare to spend some time gathering and uploading documents. For new and experienced alike, some of the requirements, and the vague way the Nationwide Mortgage Licensing System describes them in their requirement templates, can cause confusion. We get many of these calls every day. Here we provide a primer on answering the less obvious requests: Provide a Copy of Your Business Plan... A b ..read more

Regulators requesting "supervisory plans" may be on a fishing expedition Before you purchase a "supervisory plan" we need to agree that regulators do not define the term clearly. At issue; many states that require supervisory plans have figured out that companies will try to avoid accountability for employee actions by saying "the employee did it, not us." The regulator wants to eliminate this excuse, so requires you to tell the employee specifically what his or her job entails. The "Written Supervisory Plan" requirement is a bit of a red herring. There isn't a particular guideline defin ..read more

Mortgage Lenders Targeted for ADA Website Compliance Even without a real complainant, the petitioner succeeds in obtaining a judgment You may have your loan-level compliance nailed; it's the rest of your operation that puts you at risk. A recent demand letter a client received shows an excellent example of this. The law firm wanted a $25,000 settlement. ADA website compliance legal actions have risen over 300% from 2018 to 2019. Compliance blogs are abuzz with these actions. Because the mortgage industry offers Federally related financing, we represent an ideal target, too. With the threat o ..read more

It should surprise no one that NCCOB - the nation's FIRST state regulator to initiate anti-predatory lending laws, and one of the first to initiate robust pre-licensing training, AND was a leader in pre-Dodd-Frank regulation - has now taken the flag as one of the most detail-oriented examiners.  Expect an initial examination within the first 12 months of licensing. Existing licensees who have never been examined should expect one, and this normally coincides with a complaint or other inconsistency. For those licensed in the state, NCCOB (North Carolina Commissioner of Banks) has clearly ..read more

As we roll into tax season, we return again and again to the topic of originator compensation; it remains the most ambiguous topic in compliance. Varying comp, broker company compensation, borrower-paid or lender-paid, all represent areas of confusion. But nothing confounds more, with multiple layers of regulations, than whether you can pay a loan originator as a contractor by 1099. Conflicting Interests Ironically, originators WANT this, while other industries experience the opposite with employees decrying the "gig economy" and its loss of employment benefits. But mortgage brokers want to ..read more

This update addresses some of the issues we discovered in the past 30 days. Privacy policies and marketing - The reason you MUST have a toll free company number An 800 number provides customers with a direct, toll-free line to communicate with company representatives. The Gramm-Leach-Bliley (GLB) Act states that customers must have an opportunity to do what is called "opting out" of information sharing. Customers have the absolute right to call and direct that their personal information not be shared with non-affiliated third parties. Having an 800 number fulfills the requirements of the GLB A ..read more

We continue to update our products as we get feedback from our customers. We list the recent updates here, some of which relate to our review of materials from our Compliance VP CMS product. You will notice three themes for this series of updates: Advertising on the Radar Prompted by a Washington state review this past spring, advertising for particular products have come on to the Federal government's radar. The CFPB has stated its renewed interest in protecting veterans, and so has Veterans Affairs. Specifically, the question surrounds whether the way companies advertise certain programs c ..read more