New Loan Origination and Mortgage Servicing Rules

  • Pdf File 1,413.54KByte

5/15/2014

New Loan Origination and Mortgage Servicing Rules

2014 Personal Finance Seminar for Professionals University of Maryland Extension

? National Fair Housing Alliance 2014

Presenter:

Diane Cipollone, Esq. Director of Training National Fair Housing Alliance dcipollone@ 410-693-0943 (mobile)

? National Fair Housing Alliance 2014

2

1

5/15/2014

Part I Loan Origination Ability to Repay and Qualified Mortgages

Part II Mortgage Servicing Rules for Borrowers in Default

? National Fair Housing Alliance 2014

3

2010 Dodd-Frank Wall Street Reform and

Consumer Protection Act

? The Dodd-Frank Act established the Consumer Financial Protection Bureau (CFPB)

? Transferred regulatory, supervisory and enforcement authority to CFPB for numerous consumer financial protection and mortgage related laws including

o Equal Credit Opportunity Act (ECOA) o Home Mortgage Disclosure Act (HMDA) o Fair Debt Collections Practices Act (FDCPA) o Truth-in-Lending Act (TILA) o Real Estate Settlement Procedures Act (RESPA)

? U.S. Department of Justice also has authority to enforce ECOA ? HUD and U.S. Department of Justice retain authority to enforce the federal

Fair Housing Act

? National Fair Housing Alliance 2014

4

2

5/15/2014

Consumer Financial Protection Bureau

? Congress gave the CFPB authority over large banks, private student lenders, mortgage companies, and certain other businesses that offer credit

? Mandated creation of Office of Fair Lending and Equal Credit Opportunity within the CFPB o Office of Fair Lending is responsible for ensuring fair, equitable, and nondiscriminatory access to credit o Office of Fair Lending works with CFPB Office of Supervision and Office of Enforcement to ensure compliance with ECOA and HMDA o CFPB will refer Fair Housing Act violations to Department of Justice

? National Fair Housing Alliance 2014

5

Consumer Financial Protection Bureau

? Issues Bulletins ? Guidance for the Industry

? Conducts fair lending and compliance reviews at financial institutions across the country

? Brings enforcement actions ? not limited to fair lending

? Submit a complaint on-line if you think you have been discriminated against or have any other type of complaint regarding a lender, mortgage servicer or any other consumer financial transaction

?

? National Fair Housing Alliance 2014

6

3

5/15/2014

Mortgage Reform

and Anti-Predatory Lending Act

? Part I of this presentation covers the new CFPB Rules in Regulation Z - implementing the TILA amendments regarding loan origination aspects of these reforms

? New Regulation Z Rules are effective in connection with loan applications received on or after January 10, 2014

? Part II covers the mortgage servicing reforms under TILA (Regulation Z) and RESPA (Regulation X)

o Emphasis on Servicer's obligations to assist borrowers in default or in imminent default

? National Fair Housing Alliance 2014

7

Mortgage Reform

and Anti-Predatory Lending Act

? Mortgage Reform Act passed to assure that consumers are offered and receive residential mortgage loans on terms that reasonably reflect their ability to repay the loans and that are understandable, and not unfair, deceptive or abusive

? Reforms in response to predatory and deceptive practices that led to foreclosure crisis, such as qualifying borrower for loan approval based on:

o Low introductory teaser rates for adjustable rate mortgages (ARMs)

o Deceptively low monthly payments with balloon mortgages, interest only payments (IO), and payment option ARMs that result in negative amortization

? National Fair Housing Alliance 2014

8

4

5/15/2014

Mortgage Reform and Anti-Predatory Lending Act

? Reforms in response to predatory and deceptive practices such as qualifying borrower for loan approval based on:

o Failing to consider taxes and insurance in monthly mortgage obligation

o Stated Income ? "No documentation loans"

o Borrower's equity in property

? Reforms in response to unfair practices such as:

o Excessive points, fees and higher than required interest rates

o Excessive prepayment penalties

o Mandatory Arbitration Clauses

? National Fair Housing Alliance 2014

9

Question I

Prohibitions

? Which of the following are now prohibited?

o Loans that do not escrow for taxes and insurance o Adjustable Rate Mortgages (ARMs) o Interest Only Mortgages (IO) o Mortgages with Balloon Payments o "Stated Income Loans" also known as "No Documentation

Loans" o Subprime Loans o 40 year Loans o Payment Option ARMs o Prepayment Penalties o Loans with Points and Fees Exceeding 3% of the Loan Amount o Loans with Negative Amortization

? National Fair Housing Alliance 2014

10

5

................
................

Online Preview   Download

To fulfill the demand for quickly locating and searching documents.

It is intelligent file search solution for home and business.