CFPB Releases TILA-RESPA Disclosure Guide

The Consumer Financial Protection Bureau released a guide to completing TILA-RESPA integrated mortgage disclosure forms.  The guide complements the recently released Small Entity Compliance Guide and highlights common situations that may arise when completing the forms. The TILA-RESPA disclosure changes take effect August 2015.  Find the guide on the CFPB’s website, at www.consumerfinance.gov

Fee or Free??

The Independent Community Banker Association September magazine publication had a great article titled “Fee or Free?”  Trent Fleming, a bank consultant stated “Community banks have given away so much for so long they’ve spoiled customers.”

Appraisal Management Companies have State Standards

This summer federal regulators issued for comment a plan that would establish standards for states to license and supervise appraisal management companies.  This plan was no surprise as most states were moving towards compliance with the Dodd-Frank Act which requires states to license AMC’s.  Of the 37 states that currently license AMC’s there does not seem to be any need for changing their requirements as all are within the guidelines of the regulatory plan. 

It is hoped that this will stimulate the remaining 13 states to set up their own licensing/oversight programs.  The new plan gives the states three years to set up the oversight program required by the Interim Final Rule of the Federal Reserve. 

Concerns Regarding Declining Mortgage Applications

Freddie Mac reported a few weeks ago that 30-year fixed-rate mortgages fell to their lowest point in 2014. Even with these (surprisingly) low mortgage interest rates, the Mortgage Bankers Association (MBA) reported last week that purchase mortgage applications were at a six month low. They also reported that while purchase mortgage applications were nominally up (1.4%) from the previous week, total applications (including refinance) for government mortgages declined by 5.9% with VA applications falling 8% and FHA applications down 5%.

GETTING BACK TO BANKING

Less time spent on appraisal mortgage compliance means more time with your customers

Worry list: CFPB compliance; USPAP/Appraisal Standard compliance; Inter Agency compliance; firewall between loan production staff and real estate appraiser; Fannie/Freddie cram downs; customary and reasonable fees; RESPA compliance; documented quality control/appraisal review; vendor maintenance; HELOC evaluations; and commercial appraisal order management/review.

From the Wall Street Journal

Dodd-Frank-mandated rules on providing more information on the quality of the mortgages and other loans that back securities are expected to be finalized Wednesday. The Securities and Exchange Commission's rules on asset-backed securities will require banks to provide data to investors like borrowers' credit scores and debt levels. The idea is to help investors rely less on credit ratings.

Times Are Changing (have I said that before?)

Up until this year Fannie/Freddie reviewed a very small fraction of the loans it funded every year.  An incredible amount of bad appraisals slipped through the door, with the resulting huge financial losses to both those GSE’s.  Well, that has changed. 

NEWS REPORTS THIS WEEK

Housing Rebound? The Wall Street Journal commented on a new release from the National Association of Realtors, which stated that single-family housing prices rose 4.4% in the 12 month-period that ended in the second quarter; the slowest annual pace since 2012.  Basically the Journal said good news for buyers, bad news for underwater homeowners. 

The Financial Times found in a study that the income gap between the richest and poorest U.S. metro areas has widened to its largest-ever margin, also slowing any type of housing recovery. 

PENDULUM SWINGING!

Yes, it looks like the pendulum is swinging again, this time with changes that may allow more loan applicants to qualify for their mortgages.  A recent Consumer Financial Protection Bureau study found that some consumer’s credit ratings were being unfairly penalized for paid and unpaid medical debts.  As a result of this study, FICO, the most used credit-scoring system, announced they were changing some of their criteria.  This should allow some borrowers scores to change significantly over this next year. A borrower whose only major issue is an unpaid medical bill could see their score improve by 25 points. It will be a long process and will take time, so those borrowers should be patient before moving towards a purchase of a home. 

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SAMCO Appraisal Management Company is a nationwide appraisal management service for community banks. We provide regulatory compliance and save our clients actual dollars at the end of the day.

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