Sep. 13: Notes on social media, using credit reports, CFPB updates; payday lenders; lender & vendor updates

Rob Chrisman

Rob Chrisman began his career in mortgage banking – primarily capital markets – 31 years ago in 1985 with First California Mortgage, assisting in Secondary Marketing until 1988, when he joined Tuttle & Co., a leading mortgage pipeline risk management firm. He was an account manager and partner at Tuttle & Co. until 1996, when he moved to Scotland with his family for 9 months. Read more...

What’s in a name? Plenty. J.D. Meadows passed along this website stating that all English names spring from seven basic sources.

 

Here’s a story on social media that turned some heads, especially in HR departments around the nation: “NLRB continues aggressive crackdown on social media policies”.

 

“Upon reviewing and updating our Post-Closing Quality Control Plan, we noticed that it says we must obtain Residential Mortgage Credit Reports (RMCRs) when auditing our files. Is this correct or can we use Tri-merge Credit Reports?” Darned if I know – but the answer is out there (and yes, I stole that question from Lenders Compliance Group). “Yes, you may obtain Tri-merge Credit Reports instead of RMCRs as part of your Post-Closing Quality Control Program.” The link provides the requirements per HUD, Freddie Mac, Fannie Mae and VA.

 

Brad K. opines, “Here’s a novel idea, maybe the homeownership rate hasn’t ticked up so much because people realize it is very costly to own a home. The liability of the mortgage and the upkeep of the home might not be worth it at this point. Another negative towards homeownership is the inability to move quickly for a new job or dating partner. I feel like people (new and old generations) prefer more mobility and less constraints today than a year ago. The pendulum is still swinging back from the financial woes, but I do not think people are fully convinced yet in the economy’s growth let along stability. I think they prefer not to be locked into commitments at the moment. When going on a deeper tangent, let’s also think about how many people are finding online jobs or dating partners which would also require more mobility.  Credit guidelines can only go so far. People have to want to be homeowners – that is the issue we are facing today. For decades the mantra has been to become a homeowner for pride, investment, ability to customize, etc. However, I think the new mantra is mobility and being a renter no longer carries the negative stigma it carried only a few years ago. I’m a homeowner and I so wished I had a landlord who took care of my broken water heater which flooded my basement, Hurricane Sandy damage, lawn maintenance, etc.”

 

Ginger Bell, an Education Specialist (www.go2training.com | www.go2comply.com) contributes, “Did you know that the CFPB has more than one place on their website to register for updates? One registration is for consumers and the others are for industry professionals. The registration link for industry professionals is a little hard to find so we wanted to provide it to our industry partners so you can be sure to be registered for the most recent updates on regulatory changes from the CFPB. I recently spoke on a panel with a representative from the CFPB and discovered that there are only 25,000 industry professionals registered to receive regulatory updates from the CFPB. This is a very low number and one that the CFPB would like to increase so that they can help to keep the industry informed. If you have not already registered for the CFPB regulatory updates you can do so below. The link you want to register on is under Regulation Implementation. This registration will provide you with updates from the CFPB on Regulatory Implementations. Click on the link to register (example is for the TILA/RESPA page).

 

Speaking of the CFPB, for several years there supposedly have been more payday and auto title loan stores in the U.S. than all the McDonald’s and Burger Kings combined. Today, following the ugly recession and slow recovery, the number of people resorting to finding a loan outside the traditional banking system has increased. To regulators in particular, payday lending is an odd business model which appears to have the central objective of lending to people who need short term cash but then most likely won’t be able keep up with the payments or pay it back on time. Every step of the way the borrower pays fees—late fees, renewal fees and interest rates can reach 300%. It’s not the same everywhere in the U.S. though, and in fact, 11 states have outlawed such practices or have strict usury laws limiting interest rates. This approach has mostly driven such operators out of those states.

 

Further, according to research by California State University at Northridge, there are vast differences in per capita penetration by payday lenders among the states that still allow it. For example, NM tops the list at almost 42 per 100,000 in population; closely followed by MS, SD and AL. A number of states had made efforts to regulate specific areas of this kind of lending but as a result, the payday lenders were calling themselves by other names, such as “Auto Title” or “Installment Lenders.” This evolving language has made policing even the most egregious predatory lenders seem like playing whack-a-mole. Plus, it makes gathering accurate data difficult.

 

Today, the CFPB has federal authority to oversee all consumer lenders and set nationwide standards of behavior, so this is changing. As the cleanup begins, the CFPB has released a report that non-banks are exhibiting “systemic flaws in their compliance management systems,” especially in dealing with collection and resolving consumer disputes. In addition, the CFPB reported that they have forced more than $70mm to be returned to consumers in recent months. The findings of the CFPB around payday lenders found many had illegally threatened lawsuits, harassed borrowers by phone at work and hired third parties to carry out similar illegal collection tactics. Debt collectors were also using similar practices and calling people as frequently as 10x a day. Finally, CFPB analysis found a number of firms to not have an adequate regulatory compliance program. One firm was even found to not have any company-wide compliance oversight at all.

 

When one drives by the brightly colored store-fronts with blinking neon signs advertising check cashing and “free” loans, it’s a bit of a stretch to imagine a meeting of the compliance committee in the back room. But, somewhere between the Wild West and the highly regulated banking industry there must be some rules, so many are glad the CFPB is looking into enforcing what laws there are and hopefully increasing oversight. Bankers and mortgage bankers understand the balance between regulation and just doing business. It is part of the fabric of our industry, so

Most welcome more oversight on the predatory practices of some of these lenders.

 

Let’s continue playing catch up with some relatively recent vendor, lender, agency, and investor news – the changes just never stop.

 

Essent Guaranty, Inc., announced it is now offering lenders access to Essent MI for delegated and non-delegated loans as well as rate quotes through an interface with D+H’s MortgagebotLOS™. “The result is that our mutual customers will gain greater efficiency by having direct access to select Essent MI, without requiring them to leave the platform,” said Scott Hansen, senior vice president of marketing, D+H. “We are pleased to provide another productivity enhancement for banks and credit unions that are focused on maximizing operational efficiency.”

 

New Leaf Wholesale VA & FHA guidelines have been enhanced to allow Manufactured Housing as an eligible property type.

 

Congrats to Axia Home Loans, an agency direct lender headquartered in Bellevue, Washington (with more than forty retail branches across thirteen Western states) who has received issuer status from Ginnie Mae.

 

Optimal Blue has integrated with Arch MI. Arch MI customers who use Optimal Blue’s eligibility and pricing services will now have real-time access to Arch MI’s competitive pricing and Rate Quote workflow within Optimal Blue.

 

M&T Bank Correspondent will include opportunities for a HAP to be eligible in its VA product offering. A new SONYMA Plus disclosure has been created as an application disclosure acknowledging the borrowers understanding the DPAL parameters and confirming acceptance of a DPAL. Eligible Visa classification has been updated to include E-3 as an eligible Visa for Non-Permanent Resident Aliens.

 

Citibank updated State Geographic Adjusters – New State Geographic Adjuster values are effective with new rate locks and Mandatory Commitments established on or after August 25, 2014. All states (including DC) are listed on Page 3 of the Rate Sheet with adjusters for Conforming Agency, Agency Jumbo, and Government products.

 

Freddie Mac issued an industry letter to remind lenders that mortgages with Property Assessed Clean Energy (PACE) and PACE-like obligations that provide for first-lien priority are not eligible for sale to Freddie Mac. The only exception is a Freddie Mac Relief Refinance MortgageSM – Open Access subject to the eligibility requirements.

 

Fannie Mae published an announcement reminding Lenders of the Fannie Mae policy prohibiting first-lien PACE loans on properties securing single-family mortgage loans. In this announcement Fannie Mae is updating the project insurance requirements for PUDs, condos, and co-ops. Preview version of the 2014 Servicing Guide is outlined in the servicing notice discussing changes and updates for easier navigation.

 

Impac Mortgage Wholesale is now offering AltQM Investor which includes 5/1 Hybrid Arm, Interest Only available, credit score to 680, max LTV 75% and max cash out $350,000.

 

Equifax Inc. announced that Credit*Hi-Lite(TM), its tri-merge consumer credit report, is now integrated with D+H’s LaserPro(R), the industry’s leading compliant lending and documentation solution providing real-time credit information of prospective borrowers. Fifth Third Correspondent has posted information regarding all Fannie Mae products -Agency Policy Expansion: significant derogatory credit event requirements, property inspection waiver requirements, and Fannie Mae policy change regarding Desktop Underwriter (DU) Version 9.1 Update. Fifth Third’s Conforming and Portfolio products requirements for investment properties without rental income have been updated with clarification information as well.

 

Updates to USDA program have been posted by Flagstar Wholesale including the new annual fee will be effective for all RD Conditional Commitments issued on or after October 1, 2014 and new rural area eligibility maps will take effect on October 1, 2014 for purchase transactions under the GRH program.

 

LDW Wholesale what’s New announcement includes VA full doc, FHA full doc and FHA streamline down to 580 FICO and shorter term durations on DURP and LPOA.

 

Citibank has updated and removed various credit overlays. The complete updated listing includes removal of paying down installment or revolving debt to qualify to a term of 10 months or less for purposes of qualifying is no longer prohibited. In addition, an overview of its most recent bulletin has been posted.

 

First Community Mortgage Wholesale has complied and housed all existing lock bulletins and documents into one document housed on the knowledge center under resources/processing & origination directory; information regarding its new policy is posted for viewing.

 

US Bank posted a correction bulletin regarding FHA reserve requirement when a borrower is vacating the primary residence and converting it to an investment property. US Bank has also posted information referencing pre audit underwriting notice alert added to iDocs.

 

Fannie Mae’s recent announced changes that allow shorter waiting periods involving mortgage debt charge-off accounts and mortgage debt discharged through a bankruptcy; United Guaranty will continue to treat these events the same as a foreclosure, requiring seven years’ seasoning. The next update of United Guaranty’s Underwriting Requirements Guide and underwriting reference materials will be amended, as applicable, to clarify that these types of mortgage debt events follow the foreclosure seasoning requirement.

 

 

A blonde was driving home after a game & got caught in a really bad hailstorm. Her car was covered with dents, so the next day she took it to a repair shop. The shop owner saw that she was a blonde, so he decided to have some fun. He told her to go home, blow into the tail pipe really hard & all the dents would pop out. So, the blonde went home, got down on her hands & knees & started blowing into her tailpipe. Nothing happened. So she blew a little harder & still nothing happened. Her blonde roommate saw her & asked, “What are you doing?”

The first blonde told her how the repairman had instructed her to blow into the tail pipe in order to get all the dents to pop out. The roommate rolled her eyes & said, “Uh, like hello! You need to roll up the windows first.”
 

Rob

 

(Copyright 2014 Chrisman LLC. All rights reserved. Occasional paid job listings do appear. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of Rob Chrisman.)