Apr. 4: Notes on TRID, APR, the size of doc packages, HOA & super lien defense; updates from lenders & agencies

Many companies believe that TRID is well in hand ahead of August 1. Just like Y2K, or LO comp, or QM, the guesses are that there is so much preparation that the date come and goes and the industry takes it in stride. But there is worry about the LO who only closes a couple loans a quarter, or the Realtor who does a couple transactions a year.


Dorinda Smith, SVP of Correspondent Production at SunTrust Mortgage writes, “What is good for our borrowers is good for SunTrust. We believe the new disclosures, new timing requirements and other changes with RESPA/TILA not only improve the transparency in getting a mortgage, they empower borrowers in the homeownership process. With that in mind, SunTrust is engaged and actively discussing the changes with its business partners: realtors and title agents, as well as correspondent clients. SunTrust loan officers are sharing information about RESPA/TILA with realtor groups across the Southeast. In March, we held the first of a series of teleconferences with the American Bankers Association and we have events planned for our non ABA bank and mortgage company clients as well.” Go Dorinda!


Others are focused on the nuts and bolts, like APR. This from a broker in Nevada: “In my opinion the APR is basically worthless. There are certain items that are required to be included in the APR.  Lenders don’t necessarily add all required costs in the APR.  The object is to have a low APR but the consumer has no idea what is included in a specific APR. The current GFE form is also worthless. It is very easy to manipulate the GFE #s. The best way for the consumer to compare rates and fees is a simple line item breakdown. The GFE worksheet, which by the way is the old GFE form, listed all the costs and the consumer can compare costs line by line. The interest rate is the rate. There is always a cost – the issue is, how do you pay for it. Some consumers want the lowest rate and are willing, and able, to pay their costs out of pocket.  Other consumers don’t have the ability to pay and therefore will opt for a higher rate with YSP credit to offset out of pocket cost.


“My job is to provide solid information so my client can make an informed decision as to what works best for them. Does the consumer get this from a bank LO? No. Does the consumer get this service from an on-line lender? No. The bank offers one deal, and that is geared for the most profit to the bank. Same with a mortgage banker. They have big buildings and fancy offices to support, along with large staffs. Me, I don’t have all that.  My pricing is lower, because I don’t have to make as much, and don’t try to. The consumer can get all the quotes they want to get.  Bottom line: I will always be better priced than anyone else. Also, I provide exceptional, person service. I even provide a copy of the rate sheet, and explain how the system works.  I recommend they call several other local lenders. I doubt any bank or mortgage bank would ever consider doing that. And I’ve never had anyone come back and say I was not the best.”


Another wrote: “Do you have comments from lowly originators, like myself, that complain about lender loan docs? Each lender has different forms.  You would think the forms would all be the same.  The note and deed of trust are the only documents that must have state specific verbiage.  All the other stuff is either fed regs or agency requirements.  A few state specific forms.  The docs should be the same.


“My last doc package was signed this week and was 194 pages. It is absurd. In today’s world, where most loans are administered through the internet, who is going to ‘explain’ anything to the borrower? How do you explain anything through the ‘net’?  With e-signing, the borrower barely sees a form, let alone read it. I do, always will, meet with my clients, and explain the entire loan application/disclosure package. They say I am obsolete.  Well, I would like to know how complicated issues like the APR and the ‘Total Interest Percentage’ will be explained – more pages of useless verbiage that no one reads. Then the borrower is allowed to cry foul 3 years down the road.”


Kevin Ziolkowski (Managing Director, Advisory Services Group of Black Knight Financial Services) wrote in saying, “I wanted to share with you an industry solution that we have in place for investors and servicers to protect them from potential HOA and ‘super lien’ losses. Please check out the Press Release issued earlier this year.”


I know it’s a Saturday, but let’s continue playing catch up on what changes lenders, government agencies, and investors have made in the last several weeks to see if there are any trends to note. As always, readers are advised to read the full bulletin for details. In no particular order…


About a month ago CalHFA announced a streamlined subordination process for all CalHFA junior loans: Existing homeowners will now have the opportunity to refinance their first mortgage loans, in order to take advantage of low interest rates and recently reduced FHA mortgage insurance premiums, without being forced to pay off their existing CalHFA junior loans(s) or having to declare a hardship. See CalHFA Program Bulletin 2015-01 for the announcement and the new Subordination Process Requirements for details and instructions.


Effective with registrations and/or locks on or after March 4, 2015, ditech will offer FHA Non-Credit Qualifying without Appraisal Streamline Refinance product.


Fannie Mae and Freddie Mac (the GSEs) published Appendix I: UCD Delivery Specification to further support your implementation of the Uniform Closing Dataset (UCD). The UCD is a common industry dataset that supports the Consumer Financial Protection Bureau’s (CFPB) Closing Disclosure and in the future will be required by the GSEs for all loans they acquire.


The Federal Housing Administration (FHA) announced a new effective date for its HECM Financial Assessment and Property Charge Funding requirements published in Mortgagee Letters 2014-21 and 2014-22. These policies will now be effective for FHA case numbers assigned on and after April 27, 2015.


Insights from Flagstar include in regard to omission of any liability on a loan, make sure there is documentation to support the omission of the omitted liability. Providing this necessary documentation up front will avoid the loan being unnecessarily conditioned and help to expedite the underwriting process. Regarding Auto lease payments, no matter how many months are remaining on the lease, this debt must always be considered on a loan due to the fact that terminated lease agreements typically lead to either a new lease agreement, the buyout of an existing lease or the purchase of a new vehicle. Therefore Flagstar requires that lease payments be included as a recurring monthly debt obligation regardless of the number of months remaining on the lease.


Ginnie Mae has added “Ginnie Mae Launches New Issuer Performance Measurement Tool: New Initiative Provides Enhanced Issuer Management Capabilities. Click the link to view its press release.


In late February LDWholesale announced that the LTV/FICO Loan Level Price Adjustments will be updated for all Conforming Fixed, LPMI Fixed and High Balance Fixed loan. Changes are reflected on page 3 of the Rate sheet and took affect after 2/20. For details, click HERE. Also, its Condo Desk is offering a Condo Limited Review Job Aide as a tool to help clarify requirements for Conventional Condo transactions.

Mountain West Financial (MWF) is offering the following Tax Return Transcript guidance.  This document is available on the Intranet under Resources/Forms, or by clicking here.

NewLeaf Wholesale updated its VA matrix to reflect the Validity Period announced by VA for New and Proposed Construction loans in VA Circular 26-14-28.


Customers can utilize a Community Second Mortgage or a Down Payment Assistance Program with ditech. MyCommunityMortgage and Fannie Mae Conforming allow a 105% CLTV when using Community Seconds and Down Payment Assistance Programs (DPAs). The Community Second option combines a first mortgage that Fannie Mae purchases with a subordinate mortgage. The subordinate mortgage may be funded by a state, county, or local housing agency, a nonprofit organization, or an employer; it may be used to finance the down payment and/or closing costs. A review of all of the documents applicable to the Community Seconds program, including the legal documents (such as the promissory note and the security instrument), the program description, and any other pertinent documents is required.


As of March 5, 2015, Flagstar activated the HFI versions of the following 4 products: Fannie Mae 15 Year Fixed (166027), Freddie Mac 15 Year Fixed (166029), Fannie Mae High Balance 30 Year Fixed (166041) and Freddie Mac Super Conforming 30 Year Fixed (166042). In addition, all customers (excluding Delegated) will be required to retrieve their 4506-T results through Flagstar’s preferred vendor: Rapid Reporting, via the Flagstar Bank Network (FSBN).


Lenders are reminded that although Form 582/LRI must be completed for certification only once a year, users of the Form 582/Lender Record Information (LRI) application should log in every 90 days to ensure their user credentials remain active and avoid being locked out. Fannie Mae requires a password reset every 90 days for all technology applications. Failure to reset your password could also result in being locked out. Key changes in staffing, principal purpose, activities, or facilities should be reported to Fannie Mae throughout the year in Form 582, not only at the time your annual certification is due. For more information on this process, refer to the Form 582 page.


Freddie Mac issued a reminder, stating March was the last month it will email the Selling Representation and Warranty Relief Date Report to Seller/Servicers. The report will reflect portfolio information as of February 2015. Interested parties can easily pull this report at any time from Freddie Mac Loan Coverage Advisor (LCVA). If you already have access to LCVA, just follow these quick steps to generate the report. If you do not have access to LCVA, request your LCVA administrator to add you as an authorized user. Contact 800-FREDDIE to inquire about your LCVA administrator. If your company has not yet signed up for access, complete this form and Freddie will work through your administrator to email your User ID as soon as possible.


Kinecta Federal Credit Union announced Piggy Back Heloc enhancements as of March 3rd. Rate/term refinance is allowed. Maximum loan amount has been increased from $250,000 to $350,000 on purchase and refinance loans. Loans in the pipeline and new loan applications can take advantage of this revised guidance. Matrices were updated to reflect these enhancements and other miscellaneous clarifications.

LHFS Wholesale has updated its Non-Borrowing Spouse Information Disclosure for Reverse Mortgages.


Enough for a weekend!



You lovers of the English language might enjoy this.

There is a two-letter word that perhaps has more meanings than any other two-letter word, and that is ‘UP. It’s easy to understand UP, meaning toward the sky or at the top of the list, but when we awaken in the morning, why do we wake UP?

At a meeting, why does a topic come UP?

Why do we speak UP and why are the officers UP for election and why is it UP to the secretary to write UP a report?

We call UP our friends.

And we use it to brighten UP a room, polish UP the silver; we warm UP the leftovers and clean UP the kitchen.

We lock UP the house and some guys fix UP the old car.

At other times the little word has real special meaning.

People stir UP trouble, line UP for tickets, work UP an appetite, and think UP excuses.

To be dressed is one thing, but to be dressed UP is special.

A drain must be opened UP because it is stopped UP.

We open UP a store in the morning but we close it UP at night.

We seem to be pretty mixed UP about UP!

To be knowledgeable about the proper uses of UP look the word UP in the dictionary.

In a desk-sized dictionary, it takes UP almost 1/4th of the page and can add UP to about thirty definitions.

If you are UP to it, you might try building UP a list of the many ways UP is used.

It will take UP a lot of your time, but if you don’t give UP, you may wind UP with a hundred or more.

When it threatens to rain, we say it is clouding UP.

When the sun comes out we say it is clearing UP.

When it rains, it wets the earth and often messes things UP.

When it doesn’t rain for a while, things dry UP.

One could go on and on, but I’ll wrap it UP, for now my time is UP, so…….it is time to shut UP!

Now it’s UP to you what you do with this email.





(Copyright 2015 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.)

Rob Chrisman