Mortgage Compliance

Compliance Banking has become a mandatory criterion for the 21st Century Lending Institution.  Imposition of consumer safeguards under Dodd / Frank and CFPB have placed an additional standard of regulatory mandates on the lending community in order to safeguard consumers.   Likewise the effects of the Patriot Act and Anti Money Laundering legislation have imposed another layer of review on Lending Institutions.

We have a seasoned staff that can review your policies and procedures, determine whether you are compliant with these Compliance guidelines and quickly and effectively confirm and/ or amend your guidelines in order to achieve 100% compliance with regulatory mandates.

Let our Subject Matter Experts help your institution navigate the current regulatory environment and regulatory expectations.

“Quality means doing it right when no one is looking.” – Henry Ford

Audits and reviews include:

HMDA

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.

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.

 

 

TRID

(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.

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

Loan Servicing Reviews

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.

 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.

 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.

 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.

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

 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.

 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:

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. 

Anti Money Laundering

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.

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.

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Oct 04, 2017

Amendments to the 2016 Amendments to the 2013 Mortgage Servicing Rules Under the Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lending Act (Regulation Z)

Interim Final Rule

The CFPB issued an interim final rule amending a provision in Regulation X that it issued in 2016 relating to the timing for mortgage servicers to provide modified written early intervention notices to borrowers who have invoked their cease communication rights under the Fair Debt Collection Practices Act.

Sep 20, 2017

Amendments to Equal Credit Opportunity Act (Regulation B) Ethnicity and Race Information Collection  

Final Rule

The Bureau of Consumer Financial Protection is issuing a final rule that amends Regulation B to permit creditors additional flexibility in complying with Regulation B in order to facilitate compliance with Regulation C, adds certain model forms and removes others from Regulation B, and makes various other amendments to Regulation B and its commentary to facilitate the collection and retention of information about the ethnicity, sex, and race of certain mortgage applicants.

Jul 07, 2017

Amendments to Federal Mortgage Disclosure Requirements under the Truth in Lending Act (Regulation Z)

Final Rule

The Bureau is making various amendments to federal mortgage disclosure requirements under the Real Estate Settlement Procedures Act and the Truth in Lending Act that are implemented in Regulation Z. 

Jun 27, 2017

Amendments to the 2013 Mortgage Rules Under the Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lending Act (Regulation Z); Correction

Final Rule

The Bureau is making several technical corrections to a final rule it issued on Aug. 4, 2016 amending certain of the Bureau’s mortgage servicing regulations under Regulation X (implementing the Real Estate Settlement Procedures Act) and Regulation Z (implementing the Truth In Lending Act) (2016 Final Rule).

Dec 21, 2016

Truth in Lending Act (Regulation Z) Adjustment to Asset-Size Exemption Threshold

Final Rule

The Bureau is amending the official commentary that interprets the requirements of the Bureau’s Regulation Z (Truth in Lending) to reflect a change in the asset-size threshold for certain creditors to qualify for an exemption to the requirement to establish an escrow account for a higher-priced mortgage loan based on the annual percentage change in the average of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the 12-month period ending in November.

Dec 21, 2016

Home Mortgage Disclosure (Regulation C) Adjustment to Asset-Size Exemption Threshold

Final Rule

The CFPB is issuing a final rule amending the official commentary that interprets the requirements of the Bureau's Regulation C (Home Mortgage Disclosure) to reflect the asset-size exemption threshold for banks, savings associations, and credit unions based on the annual percentage change in the average of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W)..

Nov 30, 2016

Appraisals for Higher-Priced Mortgage Loans Exemption Threshold Adjustments

Final Rule

The Agencies' rules exempted, among other loan types, transactions of $25,000 or less, and required that this loan amount be adjusted annually based on any annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

Nov 30, 2016

Truth in Lending (Regulation Z) Threshold Adjustments

Final Rule

The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) amended TILA by requiring that the dollar threshold for exempt consumer credit transactions be adjusted annually by the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

Nov 27, 2015

Appraisals for Higher-Priced Mortgage Loans

Final Rule

The revisions to Regulation Z implement a new provision requiring appraisals for “higher-risk mortgages” that was added to TILA by the Dodd-Frank Act. For mortgages with an annual percentage rate that exceeds the average prime offer rate by a specified percentage, the final rule requires creditors to obtain an appraisal or appraisals meeting certain specified standards, provide applicants with a notification regarding the use of the appraisals, and give applicants a copy of the written appraisals used.

Jun 09, 2015

Minimum Requirements for Appraisal Management Companies

Final Rule

The final rule also implements the minimum requirements in the Dodd-Frank Act for AMCs that are subsidiaries owned and controlled by an insured depository institution and regulated by a Federal financial institutions regulatory agency (Federally regulated AMCs).

Apr 15, 2015

High-Cost Mortgage and Homeownership Counseling Amendments to the Truth in Lending Act (Regulation Z) and Homeownership Counseling Amendments to the Real Estate Settlement Procedures Act (Regulation X)

Final Rule

The final rule amends Regulation Z (Truth in Lending) by expanding the types of mortgage loans that are subject to the protections of the Home Ownership and Equity Protections Act of 1994 (HOEPA), revising and expanding the tests for coverage under HOEPA, and imposing additional restrictions on mortgages that are covered by HOEPA, including a pre-loan counseling requirement.

Nov 03, 2014

Mortgage Servicing Rules Under the Real Estate Settlement Procedures Act (Regulation X)

Final Rule

The CFPB is amending Regulation X, which implements the Real Estate Settlement Procedures Act of 1974, and implementing a commentary that sets forth an official interpretation to the regulation. The CFPB is also amending Regulation Z, which implements the Truth in Lending Act and the official interpretation to the regulation, which interprets the requirements of Regulation Z. These final rules implement provisions of the Dodd-Frank Act regarding mortgage loan servicing.

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