Phone: 213.431.6424

HMDA as well as the CFBP Regulation "C' effective January 1, 2018

The new changes will more than double the number of reportable HMDA data fields that institutions must collect, edit and submit. In analyzing the new fields that were added to the HMDA requirement, we have identified 14 fields that presently exist within RATA Comply HMDA/CRA and 39 fields that will need to be created. The new fields to be added are for automated underwriting, expanded race and ethnicity as well as general loan and property data points.

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The HMDA Rule modifies the types of transactions that are covered under Regulation C. In general, the HMDA Rule adopts a dwelling-secured standard for transactional coverage.

Beginning on January 1, 2018, covered loans under the HMDA Rule generally will include:

o Closed-end mortgage loans and open-end lines of credit secured by a dwelling;

o Home improvement loans secured by a dwelling; and

o Business-purpose loans that are secured by a dwelling if used for home improvement, home purchase, or refinancing.

The HMDA Rule also changes the scope of covered preapproval requests. Currently, the collection, recording, and reporting of preapproval requests that are approved but not accepted is optional under Regulation C. Beginning January 1, 2018, covered institutions are required to collect, record, and report information for approved but not accepted preapproval requests for home purchase loans.

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(TILA RESPA Integrated Disclosures)

TRID has changed the Mortgage Lending Industry.  The lender, not the title company, will now be responsible for the Closing Disclosure. Prior to TRID, the title company would prepare the HUD-1 after going back and forth with the lender on fees. When they were done, they would then send it to the lender for a final blessing – but the lender still did not own it.  It’s a big change for lenders and a big change for title companies.

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The change in regulation brings more responsibility and burden on the lender.

Internal and External Loan Servicing

Servicers must comply with various laws to the extent that the law applies to the particular servicer and its activities:

The Real Estate Settlement Procedures Act (RESPA) and its implementing regulation, Regulation X, impose requirements for servicing transfers, written consumer information requests, resolution of notices of error, force-placed insurance, early intervention and continuity of contact for delinquent borrowers, loss mitigation procedures, general servicing policies and procedures, and escrow account maintenance.

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 The Truth in Lending Act (TILA) and its implementing regulation, Regulation Z, impose requirements on servicers regarding periodic billing statements, crediting of payments, imposition of late fee and delinquency charges, provision of payoff statements with respect to closed-end consumer credit transactions secured by a principal dwelling, and disclosures regarding rate changes for adjustable rate mortgages. For open-end mortgages, Regulation Z provisions related to payment crediting and error resolution apply to the extent that the servicer is a creditor. Additionally, TILA and Regulation Z generally impose requirements on loan owners for loan ownership transfers.

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 The Electronic Funds Transfer Act (EFTA) and its implementing regulation, Regulation E, impose requirements if servicers within the scope of coverage obtain electronic payments from borrowers.

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 The Fair Debt Collection Practices Act (FDCPA) governs collection activities conducted by third-party collection agencies, as well as servicer collection activities if the servicer acquired the loan when it was already in default.

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 The Homeowners Protection Act (HPA) limits private mortgage insurance that can be assessed on consumer accounts.

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 The Fair Credit Reporting Act (FCRA) requires servicers that furnish information to consumer reporting agencies to ensure the accuracy of data placed in the consumer reporting system. The FCRA also limits certain information sharing between company affiliates.  The Gramm-Leach-Bliley Act (GLBA) requires servicers within the scope of coverage to provide privacy notices and limit information sharing in particular ways.

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 The Equal Credit Opportunity Act (ECOA) and its implementing regulation, Regulation B, apply to those servicers that are creditors, such as those who participate in a credit decision about whether to approve a mortgage loan modification. The statute makes it unlawful to discriminate against any borrower with respect to any aspect of a credit transaction:

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o On the basis of race, color, religion, national origin, sex or marital status, or age (provided the applicant has the capacity to contract);

o Because all or part of the applicant’s income derives from any public assistance program; or

o Because the applicant has in good faith exercised any right under the Consumer Credit Protection Act. 

• Americans with Disabilities Act  

• Community Reinvestment Act (CRA)  

• Debt Collection/Fair Debt Collection Practices Act (FDCPA)

• Fair Credit Reporting Act (FCRA) 

• Fair Lending

• Home Mortgage Disclosure Act (HMDA)  

• Military Lending Act

• Service members Civil Relief Act (SCRA) 

• Unfair, Deceptive or Abusive Acts and Practices (UDAAP)

Asset Laundering Loan Review

One of the products that pose the highest level of risk to money laundering and reputational risk is Real Estate! Yet it is the most under-looked and unprepared financial industry today in regards to Anti-Money Laundering and detection of suspicious activity.

In November 2015, the most recent month for which data is available, 17 percent of the 82,595 all-cash purchases of single family homes and condos went to buyers with an “LLC” in the name, according to the housing data company RealtyTrac, indicating they were purchased by companies. Altogether, a third of home purchases in the United States since 2011 were all-cash.

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Meanwhile, there were about $104 billion in transactions involving foreign investors in the U.S. real estate market between April 2014 and March 2015. More than half the buyers in those deals were from China, Canada, India, Mexico, and the United Kingdom, and the majority of transactions involving overseas buyers were in cash, according to the FBI’s money laundering intelligence unit.