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Oregon Amends Provisions of Foreclosure Avoidance Notice

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Oregon amends Foreclosure Avoidance Measure Notice

(Jeff Sorg, OnlineEd – Portland, OR) Oregon has amended the provisions of its Foreclosure Avoidance Notice by providing for the form and content of the notice when a lender determines that a homeowner is not eligible for foreclosure avoidance measures or has not complied with an already agreed upon avoidance measure.

The form [Form 20] requires the lender to include homeowner name, lender name, and the subject property address. The lender will then check an appropriate box on the form indicating either that the homeowner is not eligible for any foreclosure avoidance measure or that the homeowner is not in compliance with the terms of an agreement already reached with the lender. The lender must describe with specificity and in plain language their basis for their determination. The form also notifies the homeowner of the date and location set for the sale of the property, cautions the homeowner to seek legal advice, and provides information about agencies and organizations to assist the homeowner.

View  or download a copy of this form.

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For more information about OnlineEd’s mortgage and real estate broker education visit www.OnlineEd.com. For more information about mortgage-specific learning management systems and products for compliance training, tracking, and management visit  https://www.onlineed.com/inlineed.php or contact Joseph Mikkelson at 1.866.519.9597.

This article was published on February 12, 2014. All information contained in this posting is deemed correct and current as of this date, but is not guaranteed by the author. Due to the fluid nature of the subject matter, regulations, requirements, laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

In Wake of Audits CFPB Issues HMDA Bulletin to Put Banking Industry on Notice

(OnlineEd – Portland, OR) – To date, the CFPB has conducted HMDA (Home Mortgage Disclosure Act) reviews at dozens of mortgage lenders, both bank and nonbank. In the wake of these audits, the Bureau has issued an industry wide bulletin to help banks and nonbanks realize the importance of accurate reporting, effective HMDA compliance management systems and adequate employee training.


cfpb bulletinA copy of the bulletin can be viewed by clicking the Resources tab at www.InlineEd.com and then scrolling down to October 9, 2013 CFPB Bulletin on HMDA Compliance Management.

The Bureau reviews the accuracy of HMDA data and assesses compliance programs as part of its supervision of both banks and nonbanks.

The bulletin also announces the release of the CFPB’s HMDA Resubmission Schedule and Guidelines, which lists the error thresholds that CFPB examination teams will use to determine when institutions should correct and resubmit their HMDA data. The CFPB’s new HMDA Resubmission Schedule and Guidelines apply to HMDA reviews that begin on or after Jan. 18, 2014.

By issuing this bulletin today, the Bureau is putting the industry on notice about the integrity of mortgage information. Specifically, the bulletin:

  • Discusses components of an effective HMDA compliance management system. The bulletin suggests common elements of an effective compliance system, which include employee training, internal audits to test and evaluate information accuracy, and assigning responsibility for timely and accurate reporting of the data.
  •  Details factors the CFPB may consider when evaluating whether to pursue a public enforcement action for HMDA violations. The CFPB may consider various factors when determining whether to pursue a public enforcement action, including: the size of the bank or nonbank’s mortgage lending activity; the error rate; the history of previous HMDA supervisory activity, including the history of any violations; and whether the institution self-identified or self-corrected any errors. These factors, along with those listed in the Dodd-Frank Act, will be considered when determining the appropriate size of any civil penalty that the Bureau seeks.

A copy of the bulletin can be viewed by clicking the Resources tab at www.InlineEd.com and then scrolling down to October 9, 2013 CFPB Bulletinon HMDA Compliance Management.

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For more about OnlineEd and HMDA training visit www.OnlineEd.com or www.InlineEd.com or call Joseph Mikkelson at 1.866.519.9597.  For more about the CFPB, please visit their web site http://www.consumerfinance.gov/

Off-the-Shelf Mortgage Industry Policies and Procedures Templates Provide Affordable Solution

(OnlineEd – Portland, OR) – Mortgage education provider OnlineEd has developed industry standard policies and procedures templates to help mortgage companies comply with the Consumer Financial Protection Bureau (CFPB) requirement for mortgage companies to have written policies and procedures in place and reviewed by all of their employees. Their easy-to-use system allows for subscribers to upload their existing policies and procedures, to edit and personalize OnlineEd’s off-the-shelf templates, and also allows for integration of existing policies with the OnlineEd templates.  The system, which is part of OnlineEd’s cloud-based software service known as InlineEd, also allows managers to push out their policies and procedures through email notification to all employees, and records each employee’s acknowledgement that they read and understood the policies.  The InlineEd system allows for customization of such features as branding with company specific information and a company logo, built-in version control, and compliance reports.

“Developing and writing policies and procedures is costly and time consuming. It became evident that there was a real need to help mortgage companies sort out CFPB requirements and then come up with an affordable solution, especially for those companies who might not have a full-time compliance officer on staff”, said OnlineEd Chief Operating Officer Jeff Sorg.

InlineEd provides policies and procedures templates, education and compliance management tracking

Three templates are offered, each rigorously reviewed by industry professionals:

The templates can be purchased as a standalone product or bundled with OnlineEd’s InlineEd Learning Management System (LMS), which includes courses designed to meet CFPB core compliance training for employees and mortgage loan originators. InlineEd also provides the solution for being able to demonstrate to the CFPB that the company has a training program in place to educate their employees on consumer risk-reducing issues.

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For more information please visit www.InlineEd.com or contact Joseph Mikkelson at 1.866.519.9597.

This article was published on September 6, 2013. All information contained in this posting is deemed correct and current as of this date, but is not guaranteed by the author. Due to the fluid nature of the subject matter, regulations, requirements, laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

OnlineEd NMLS 8-Hour Approved CE for 2013 Is Now Available

2012 nmls course approval 8- hour 3556(OnlineEd) – Mortgage Loan Originators working in the current market are fully aware how new rules and regulations have an affect on their day-to-day business. Being knowledgeable on updated federal regulations will assist the MLO with making sound, ethical decisions that will positively impact their consumers. This OnlineEd® course will instruct the mortgage loan originator on the importance of keeping up-to-date on new regulations, and will explain the final rules of the Dodd-Frank Wall Street Reform and Consumer Protection Act, such as the Ability-to-Repay rule, the definition of a Qualified Mortgage, and Safe Harbor considerations.

This course will also go over the anti-money laundering regulations as set forth by the Financial Crimes Enforcement Network, or FinCEN. This unit of the Department of the Treasury now requires mortgage companies to have a 4-point program in place to mitigate potential fraud. Two of these points are an Anti-Money Laundering (AML) program and the filing of a Suspicious Activity Reports (SAR) when the loan originator suspects fraudulent loan activity. We will cover how to detect money laundering and common fraud red flags, as well as how to handle suspicious activity and how SARs are to be submitted.

Types of loan options available to consumers, such as the VA Loan, the Federal Housing Administration’s 203(k) and Energy Efficient loans, the Good Neighbor Next Door loan, and the Home Equity Conversion Mortgage, are also discussed.

Finally, this course will go over fair lending regulations and how to avoid discrimination in lending practices.

Here’s how the course breaks down:

This course consists of four primary sections:

  1. The Dodd Frank 2013 Final Rules (3 Hours Federal Law)
  2. Ethics, Fraud, and Anti-Money Laundering (2 Hours Ethics)
  3. Loan Products – VA, 203(k), Energy Efficient, Good Neighbor, and Reverse Mortgages (2 Hours Non-Traditional Mortgage)
  4. Fair Lending in Today’s Market (1 Hour Elective)

Total study time: 8 hours

Module 1: The Dodd Frank 2013 Final Rules

In this module we are going to provide you with an understanding of the recent Final Rules relating to H.R. 4173, the Dodd-Frank Wall Street Reform and Consumer Protection Act. These rules are going to have a major impact on the mortgage industry. The purpose of the Dodd-Frank Act and the rules implemented to enforce the law are design to protect consumers. It is up to all those involved in the mortgage industry to have a working knowledge of the law and regulations in order understand how they impact the daily practice of mortgage brokerage. Not only will this knowledge keep you in compliance, but it will assist in protecting the consumer.

Module 1 Objectives

When you have completed this module, you will be able to:

  1. Identify changes made as a result of the recent Final Rules of the Dodd-Frank Act.
  2. List various Dodd-Frank Final Rule regulatory updates and how they relate to the mortgage industry.
  3. Define the compliance standards in place as a result of some of the recent Final Rules of the Dodd-Frank Act and their implementation by the Consumer Finance Protection Bureau (CFPB).

Module 2: Ethics, Fraud, and Anti-Money Laundering

In this module we will review ethics and fraud in mortgage lending and how they affect the mortgage industry. We will provide a detailed explanation of the compliance requirements of Anti-money Laundering (AML), Suspicious Activity Reporting (SAR), and the Bank Secrecy Act (BSA). This module is designed to review requirements and meet the training requirements of the Bank Secrecy Act (BSA) 31 CF 1010 and 1029.

Module 2 Objectives

When you have completed this module, you will be able to:

  1. Identify the compliance requirements of the Bank Secrecy Act, Anti-money Laundering and Suspicious Activity Reports
  2. List the various red flags to potential money laundering or fraud
  3. Define what is required to submit a Preliminary Suspicious Activity Report, a SARs and various other requirements under the Bank Secrecy Act.

Module 3: Loan Products – VA, 203(k), Energy Efficient, Good Neighbor, and Reverse Mortgages

This module will provide you with a better understanding of the VA Guarantee Loan product and other FHA loan options, and how these important products offer great financing option for qualified borrowers. This section is not meant to be a comprehensive program explaining all of the guidelines in place for these FHA programs; it is to provide you a general understanding of some of the FHA programs available.

Module 3 Objectives

When you have completed this module, you will be able to:

  1. Identify standard program requirements of various VA and FHA programs.
  2. Recognize the advantages of the VA Home Loan, Standard and the Streamlined 203(k), Energy Efficient Mortgage, Good Neighbor Next Door, and the HECM programs.
  3. Describe the basics of the VA Home Loan, Standard and Streamlined 203(k), Energy Efficient Mortgage, Good Neighbor Next Door, and HECM programs.

Module 4: Fair Lending in Today’s Market

This final module will cover the various requirements in place to remain in compliance with fair lending laws and protect consumers, your company, and yourself from discrimination in lending. It is our job to adhere to these laws and to seek protection for all consumers from unfair lending practices.

Module 4 Objectives

When you have completed this module, you will be able to:

  1. Identify discriminatory practices in the mortgage industry.
  2. List classes that are protected from discrimination.
  3. Define what is required to provide fair lending and understand the importance of fair lending in the mortgage industry.

To enroll in this 8-hour NMLS continuing education course for mortgage license renewal or for more information about OnlineEd, please visit www.OnlineEd.com.

OnlineEd® is NMLS Approved Provider No. 1400327

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For more information about education provided  by OnlineEd®, please visit www.OnlineEd.com. For more information about CFPB compliance and training, please visit www.InlineEd.com

This article was published on September 4, 2013. All information contained in this posting is deemed correct and current as of this date, but is not guaranteed by the author. Due to the fluid nature of the subject matter, regulations, requirements, laws, prices and all other information may or may not be correct in the future and if cited, should be verified.

CFPB Report Finds Many Nonbanks Lack Robust Compliance Systems

(CFPB – WASHINGTON, D.C.) — Today the Consumer Financial Protection Bureau (CFPB) issued a report detailing mortgage servicing problems at banks and nonbanks. The report also found that many nonbanks lack robust systems for ensuring they are following federal laws.

“Our examinations of banks and nonbanks allow us to correct problems before more consumers are affected,” said CFPB Director Richard Cordray. “Today’s report highlights both the mortgage servicing problems throughout the industry and the challenges of making sure that nonbanks are following federal law. Fixing both is a priority for us.”

The Supervisory Highlights report is available at: http://files.consumerfinance.gov/f/201308_cfpb_supervisory-highlights_august.pdf

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), the CFPB supervises depository institutions and credit unions with total assets of more than $10 billion, and their affiliates. The Bureau also has authority to supervise nonbanks regardless of size in certain specific markets: payday lenders; private education lenders; and mortgage companies including originators, brokers, and servicers. For other nonbank markets for consumer financial products or services, the CFPB has the authority to supervise “larger participants.” As directed by Dodd-Frank, the Bureau must define such larger participants by rule. To date, the Bureau has issued rules for the debt collection and credit reporting markets.

Today’s report is part of a series of supervision reports that the CFPB issues regularly. It highlights examination work completed between November 2012 and June 2013.

Mortgage Servicing Problems

Since the CFPB launched its supervision program, it has focused much of its work on mortgage servicing. Mortgage servicers are responsible for collecting payments from mortgage borrowers on behalf of loan owners. They also typically handle customer service, escrow accounts, collections, loan modifications, and foreclosures. In supervising both bank and nonbank servicers, CFPB examiners have uncovered problems that can be harmful to consumers. These include:

 

  • Sloppy account transfers: The rights to manage a loan are frequently bought and sold among servicers. With these transfers among institutions, the CFPB discovered several risks that can cause consumers to miss payments, delay important processes, or affect the good standing of a mortgage borrower’s loan. For example, examiners found:

o   Disorganized and unlabeled paperwork, including important loss mitigation documents;

o   Failures by mortgage servicers to tell consumers when the servicing of the loan is transferred to another company; and

o   A lack of protocols related to the handling of key documents, such as trial modification agreements.

  •  Poor payment processing: Servicers are responsible for processing loan payments and handling tax and insurance payments through escrow accounts. If they do not perform their duties correctly, it can result in extra costs and hassles for the consumer. In its exams, the CFPB found:

o   Inadequate notice to borrowers of a change in address to send payments, resulting in late payments;

o   Excessive delays in handling the cancellation of private mortgage insurance payments, resulting in late fees; and

o   Property taxes being paid later than expected, resulting in borrowers’ inability to claim a tax deduction for the year they planned.

  • Loss mitigation mistakes: Servicers are also responsible for helping qualified struggling borrowers with alternative plans for repayments, if such plans are available. So when servicers fall short of their responsibilities, consumers can be sent to foreclosure unnecessarily. CFPB examiners discovered several problems, including:

o   Inconsistent communications with borrowers, giving them conflicting instructions for loss mitigation processes;

o   Inconsistent loss mitigation underwriting, waiving certain fees and interest charges for some borrowers but not others;

o   Long application review periods, making the loss mitigation process especially hard on consumers whose accounts are also dual-tracked for foreclosure;

o   Incomplete loan files, making it challenging for consumers to find out about their loan modification applications when they call the servicer for help;

o   Poor procedures for requesting missing or incomplete information from consumers, making it difficult for consumers to provide the correct documentation; and

o   Deceptive communications to borrowers about the status of loan modification applications, leading some consumers to faster foreclosure.

 In all cases where the CFPB found mortgage servicing problems, examiners alerted the company to its concerns, specified necessary remedial measures, and, when appropriate, opened CFPB investigations for potential enforcement actions. CFPB’s corrective measures included making sure that important papers were filed appropriately, that servicers improved their policies and procedures governing the handling of loans in loss mitigation, and that consumers were treated according to the law.

The CFPB has also directed servicers to engage in specific corrective actions appropriate to the circumstances, such as: reviewing loss mitigation decisions and related fees or charges to borrowers to determine whether any reimbursement was appropriate; conducting periodic testing to monitor areas of concern; and providing reports to the CFPB on their progress completing the corrective actions.

Many Nonbanks Lack Compliance Management Systems

what you need to know The CFPB expects the companies it supervises – regardless of size – to have fully developed compliance management systems to ensure all federal consumer financial protection laws are followed. A good system ensures that employees know about their responsibilities, creates structures for reviewing operations, and takes corrective actions when needed. A good system also lessens consumer risks and reduces the potential for violations.

Prior to the CFPB’s existence, many supervised nonbanks had not been subject to federal or even state examinations. Perhaps because of this, CFPB examiners found that many nonbanks are more likely to lack robust compliance management systems. The Bureau found that many nonbank institutions are:

  • Missing a comprehensive consumer compliance program: The CFPB found that often individual branches of a business were looking out for relevant federal laws without an overarching system in place at the company. This creates a lack of consistency in following the laws across products and across locations. The result can be erratic treatment of consumer problems. It can also mean that root causes of regulatory violations go undetected.                                                            
  • Lacking formal policies and procedures: Not having formal, written documents that both detail consumer compliance responsibilities and instruct employees on the appropriate methods for executing these responsibilities can lead to inconsistencies, sloppy recordkeeping, and ultimately, consumer harm because nobody at the institution is clearly responsible to make sure laws are being followed.
  •  Forgoing independent consumer compliance audits: Independent audits are a good way for a company to routinely conduct quality-control checks on its operations. A compliance audit program provides a board of directors or its designated committees with information about whether policies and standards are being implemented. Without such a program, it is difficult to recognize any significant deficiencies in an institution’s compliance management system.

The CFPB is committed to helping industry establish good compliance systems and today’s report also offers guidance in how to do so. In general, both banks and nonbanks have committed to improving their compliance management systems in the future.

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  • OnlineEd is a provider of mortgage and real estate continuing and pre-license education and developer of the InlineEd compliance and learning management tracking system for the mortgage industry.
  •  The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit consumerfinance.gov.
  • This article was published on August 21, 2013.  All information contained in this posting was current as of this date.  Due to the fluid nature of the subject matter, regulations, requirements, laws, prices and all other information may or may not be correct in the future and if cited, should be verified by the author before use.

CFPB Takes Action Against Castle & Cooke for Paying Employees to Steer Consumers into Expensive Mortgages

(CFPB – WASHINGTON, D.C.) — The Consumer Financial Protection Bureau (CFPB) today filed a complaint in federal district court against a Utah-based mortgage company, Castle & Cooke Mortgage LLC, and two of its officers for illegally giving bonuses to loan officers who steered consumers into mortgages with higher interest rates. The Bureau is seeking an end to this unlawful practice, restitution for those consumers who were upcharged, and civil money penalties.

“Today we are taking action against the type of practices that precipitated the financial crisis,” said CFPB Director Richard Cordray. “Consumers should be able to get a mortgage without worrying about how the financial incentives of their loan officers may cause them to pay higher rates than they actually qualify for.”

Castle & Cooke is a mortgage company that originated approximately $1.3 billion in loans in 2012. The company does business in approximately 22 states and maintains approximately 45 branches across the country.

The CFPB alleges that Castle & Cooke, through the actions taken by its president, Matthew A. Pineda, and senior vice-president of capital markets, Buck L. Hawkins, violated the Federal Reserve Board’s Loan Originator Compensation Rule that had a mandatory compliance date of April 6, 2011. That rule banned compensation based on loan terms such as the interest rate of the loan.

The CFPB alleges that the company violated the rule with its quarterly bonus program, which paid more than 150 Castle & Cooke loan officers greater bonus compensation when they persuaded consumers to take on more expensive loans. The average quarterly bonus ranged from $6,100 to $8,700. By contrast, those loan officers who did not charge consumers higher interest rates did not receive quarterly bonuses. The CFPB estimates that more than 1,100 illegal quarterly bonuses were paid and that tens of thousands of customers may have been upsold since April 2011. By tying bonuses to the interest rate of the loans in this manner, the CFPB alleges that Castle & Cooke was in direct violation of the law.

The CFPB also believes Castle & Cooke violated laws that require companies to retain their compliance records for a certain period of time. Creditors are required to retain evidence of compliance with the rule. The complaint alleges that Castle & Cooke did not record what portion of each loan officer’s quarterly bonus was attributable to a particular loan and did not reference its quarterly bonus program in each loan originator’s compensation agreement, in violation of federal consumer financial law.

The CFPB’s complaint seeks to:

  • End unlawful compensation practices: The complaint seeks to prohibit Castle & Cooke from continuing its practice of incentivizing loan officers to upcharge consumers by distributing quarterly bonuses based on the interest rates of loans sold.
  • Ensure that Castle & Cooke retain records of compensation: The complaint seeks to ensure that Castle & Cooke complies with federal law that requires creditors to retain evidence of compliance.
  • Secure restitution for consumers: The CFPB is looking to secure restitution for consumers of Castle & Cooke who may have been upsold.
  • Obtain civil money penalties: The CFPB is looking to obtain civil money penalties for each bonus paid out. The Dodd-Frank Wall Street Reform and Consumer Protection Act allows civil penalty amounts to be determined under a three-tiered framework: up to $5,000 for any violation; up to $25,000 for reckless violations; and up to $1,000,000 for knowing violations.

This case was referred to the CFPB by investigators with the Utah Department of Commerce, Division of Real Estate. The complaint was filed in the United States District Court for the District of Utah, where the company is located and where the individual defendants reside.

A copy of the complaint filed today can be found at: http://files.consumerfinance.gov/f/201307_cfpb_complaint_Castle-and-Cooke-Complaint.pdf

 

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 To learn more about InlineEd Compliance and Education Management System for the mortgage industry, visit www.InlineEd.com. For more about OnlineEd, visit www.OnlineEd.com

The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit www.consumerfinance.gov.

CFPB Finalizes April Clarifications to Mortgage Rules

Rule Will Improve Consumer Protections in Qualified Mortgages and Mortgage Servicing

(CFPB, WASHINGTON, D.C.) — Today, the Consumer Financial Protection Bureau (CFPB) finalized corrections, clarifications, and amendments to its Ability-to-Repay and mortgage servicing rules. Today’s clarifications were first proposed in April 2013 and reflect the Bureau’s commitment to facilitating implementation in order to better protect consumers.

“We know that effective implementation helps our rules deliver their intended value to consumers,” said CFPB Director Richard Cordray. “We are listening closely to feedback on our rules, and today’s clarifications show our willingness to make appropriate adjustments to achieve that goal.”

The CFPB finalized several mortgage rules in January 2013. Of those, today’s rule focuses on the Ability-to-Repay and Servicing rules. The Ability-to-Repay rule protects consumers from irresponsible mortgage lending by requiring that lenders make a reasonable, good-faith determination that prospective borrowers have the ability to repay their loans. The mortgage servicing rules establish strong protections for homeowners as they repay their loans, and especially for those facing foreclosure.

Among other things, today’s final rule:

  • Clarifies how to determine a consumer’s debt-to-income (DTI) ratio: Under the Ability-to-Repay rule, a lender may make a Qualified Mortgage (QM), a loan for which certain features are prohibited and fees that can be charged are limited. The main type of Qualified Mortgage requires that a consumer’s monthly debt payments, including the mortgage, will not be more than 43 percent of the consumer’s monthly income. Today’s rule clarifies and amends how several factors can be used to calculate a consumer’s DTI ratio. Such factors include a consumer’s employment record and income, business credit reports and other documents relating to self-employed consumers, Social Security income, and non-employment related income such as from a trust or rental property.
  • Explains that CFPB’s RESPA rule does not preempt the field of servicing regulation by states: The preamble to the Bureau’s final mortgage servicing rules made clear that CFPB authority on servicing, from the Real Estate Settlement Procedures Act (RESPA), does not preempt the field of possible mortgage servicing regulation by states. In today’s final rule, the Bureau is adding a comment to expressly state this point and explain how RESPA preemption works.
  • Establishes which mortgage loans to consider in determining small servicer status: The servicing rules issued in January included an exemption from some requirements for small servicers. Today’s changes clarify which mortgage loans will be considered in determining whether a servicer qualifies as small. For example, loans serviced on a charitable basis will not be considered in making that determination.
  • Clarifies the eligibility standard of the temporary QM provision: Under the Ability-to-Repay rule, a loan can be a Qualified Mortgage if it is eligible for purchase, guarantee, or insurance by government sponsored enterprises (GSEs) or by certain federal agencies, provided the loan does not contain certain risky loan features and meets certain limitations on points and fees. Today’s rule clarifies the standards that a loan must meet if the creditor is underwriting it based on GSE or agency guidelines. For example, where a loan is eligible for GSE or agency purchase, guarantee, or insurance, creditors do not need to satisfy the types of procedural and technical requirements that are completely unrelated to the consumer’s ability to repay.

The CFPB is committed to facilitating the mortgage industry’s compliance with the new consumer protections. Throughout 2013, the CFPB has been working for a smooth transition to compliance with the rules. It has issued other clarifications and updates to the rules to help with implementation. The CFPB has published plain-language guides and plans to educate the public about their protections under the new rules. The Bureau plans to publish additional interim examination procedures. The CFPB will also soon publish its first round of exam procedures for the Ability-to-Repay and mortgage servicing rules.

The Bureau recently published a new Regulatory Implementation web page, which consolidates all of the new 2013 mortgage rules and related implementation materials. The Regulatory Implementation web page can be found here:http://www.consumerfinance.gov/regulatory-implementation

A copy of today’s final rule can be found at: http://files.consumerfinance.gov/f/201307_cfpb_final-rule_titlexiv.pdf

 

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For more information about OnlineEd and continuing education for mortgage license renewal, please visit their website. For more information about OnlineEd’s CFPB compliance and education management systems, please visit the InlineEd website.

The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit www.consumerfinance.gov.

CFPB Releases Exam Procedures for New Mortgage Rules

(CFPB – WASHINGTON, D.C.) — On June 4, 2013, The Consumer Financial Protection Bureau (CFPB) published the first update to its exam procedures for the new mortgage regulations it issued in January 2013. The exam procedures offer financial institutions and mortgage companies valuable guidance on what the CFPB will be looking for as the rules become effective. The new regulations include those on appraisals, escrow accounts, and compensation and qualifications for loan originators.

“The CFPB recognizes that the easier we make it for financial institutions and mortgage companies to follow the new regulations, the better off consumers will be,” said CFPB Director Richard Cordray. “By releasing details of what our examiners will be looking for well in advance of the effective date of most of the rules, we are giving industry more time to adjust.” Consumer Financial Protection Bureau logo

In January, the CFPB issued numerous new regulations reforming the mortgage market, many of which were directed by the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. The rules cover many stages of a consumer’s mortgage experience, from shopping for a loan to paying it off. Most of the CFPB’s new rules go into effect in January 2014.

Today’s release of exam procedures will help financial institutions and mortgage companies understand how they will be examined for CFPB rules that:

  • Set qualification and screening standards for loan originators: A loan originator must be ethical and knowledgeable. They will need to: meet character, fitness, and financial responsibility requirements; pass criminal background checks; and complete appropriate training.
  • Prohibit steering incentives: Compensation for a loan originator generally cannot vary with the loan terms. A broker or loan officer cannot get paid more if the consumer takes a loan with a higher interest rate, a prepayment penalty, or higher fees.
  • Prohibit “dual compensation:” A loan originator cannot get paid by both the consumer and another person such as the creditor.
  • Protect borrowers of higher-priced mortgage loans: The required duration of an escrow account on higher-priced mortgage loans extends from a minimum of one year to a minimum of five years.
  • Prohibit the waiver of consumer rights: It is prohibited to bar consumers in their mortgage or home equity loan or related agreements from bringing a claim in court in connection with any alleged violation of federal law.
  • Prohibit mandatory arbitration: Mandatory arbitration of disputes related to mortgage loans is generally prohibited for mortgage and home equity loans.
  • Require lenders provide appraisal reports and valuations: Mortgage lenders will need to provide applicants with free copies of all appraisals and other written valuations developed in connection with certain mortgage loan applications.
  • Prohibit single premium credit insurance: Creditors will be prohibited from financing certain credit insurance premiums in connection with certain mortgage loans.

The CFPB is sharing with industry what it will be looking for in its examinations under the new rules by updating the applicable sections of the exam procedure manuals for two laws – the Truth in Lending Act (TILA) and the Equal Credit Opportunity Act (ECOA). These documents are intended for use by CFPB examiners and the financial institutions and mortgage companies subject to the new regulations. They are the first round of updates for what will likely be multiple updates.

The CFPB is committed to the mortgage industry’s compliance with the new consumer protections. Throughout 2013, the CFPB has been working for a smooth transition. It has published plain-language guides. It plans to educate the public about their protections under the new rules. And it plans to publish additional interim examination procedures. Within the next several months, the CFPB will publish its first round of exam procedures for the Ability-to-Repay and mortgage servicing rules.

The CFPB is coordinating with other federal government regulators that also conduct examinations of mortgage companies and financial institutions to ensure all regulators have a shared understanding of the CFPB’s new rules. This multi-agency effort includes the interagency development of exam procedures. For example, the TILA procedures released today are based on the approved Federal Financial Institutions Examination Council procedures. This interagency effort helps promote a consistent regulatory experience for industry.

OnlineEd SM LogoThe Interim TILA Examination Procedures can be found at: http://files.consumerfinance.gov/f/201306_cfpb_laws-and-regulations_tila-combined-june-2013.pdf

OnlineEd SM LogoThe Interim ECOA Examination Procedures can be found at: http://files.consumerfinance.gov/f/201306_cfpb_laws-and-regulations_ecoa-combined-june-2013.pdf

 

Once these and other exam procedures have been updated with the new mortgage rule requirements, the CFPB will incorporate all amended sections, including the TILA and ECOA sections, into its general supervision and examination manual.

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The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit consumerfinance.gov. For more information about OnlineEd® please visit www.onlineed.com. For more information about the OnlineEd®  mortgage industry compliance management and education solution, InlineEd,  please visit www.inlineed.com.

8 New Mortgage Regulation Deadlines Coming Out of the CFPB

OnlineEd Mortgage Compliance Management System

OnlineEd

(OnlineEd – Portland, OR) – The Consumer Financial Protection Bureau (“CFPB”) gave 12 months (and sometimes less) from the “issue date” to implement the majority of these new requirements.  Because the CFPB considers the “issue date” as the date of publication on the CFPB’s website – rather than publication in the Federal Register,  your company will have less time to comply with the final rules.

Below lists the recent regulations along with a link to the regulation page on the CFPB website and the effective date.

June 1, 2013 – Escrow Requirements for Higher-Priced Mortgage Loans

June 1, 2013 – Prohibition on Mandatory Arbitration and Financing of Credit Insurance Premiums (from MLO Compensation Regulation)

January 10, 2014 – Qualified Mortgage and Ability-to-Repay Requirements

January 10, 2014 – Mortgage Servicing Requirements – Reg Z (TILA) and Reg X (RESPA)

January 10, 2014 – Loan Originator Compensation and Training, Certification and Identifier Disclosure

January 10, 2014 – High-Cost/HOEPA Mortgage Loans and Homeownership Counseling Disclosures

January 18, 2014  – Disclosure and Delivery of Free Copies of Appraisals – Regulation B

January 18, 2014 – Appraisals for Higher-Priced Mortgage Loans

Make sure your company is keeping tabs on when these regulations go into effect and has a plan in place to ensure complete compliance in the event of an audit.

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If you would like information about OnlineEd’s® Compliance Management System, InlineEd, developed for the mortgage industry, please visit www.InlineEd.com or telephone (866) 519-9597.

If you have questions or would like to learn more about OnlineEd®, please visit www.OnlineEd.com.

This article was published on May 15, 2013.  All information contained in this posting is correct and current as of this date.  Due to the fluid nature of the subject matter, regulations, requirements, laws, prices and all other information may or may not be correct in the future and if cited, should be verified before use by the user.

OnlineEd Compliance Management and Training System for Mortgage Lenders

OnlineEd

(OnlineEd, InlineEd) – The InlineEd system is an easy to use compliance management system developed for the mortgage industry to help it comply with Anti-Money Laundering,  Suspicious Activities Reports, Bank Secrecy Act, and continuing education or education for new employees. InlineEd, which is developed and operated by OnlineEd, is specifically for residential mortgage loan originators and lenders. It can help your company to:

● Train company personnel;
● Track and retain training records;
● Manage policies and procedures documents; and
● Make policies and procedures available to employees.

InlineEd Features 

Compliance Engine – This central system lets you define what training employees need to take and produce reports on who has completed the training. The flexible system allows you create requirements that must be met in certain time frames; either once (like new-employee training)
or at regular intervals (like continuing education). You can easily assign training to entire departments of your company in just a few clicks..
Policies & Procedures – You can upload your policy and procedures documents in any format and make them available to employees. Our simple file upload is online, cloud-based, versioncontrolled, author-controlled, and has redundant backups for security. It’s also indexed so that
you can search for key terms.
Learning Management System – InlineEd features OnlineEd’s seasoned learning management system. Designed to meet a variety of regulator agency requirements, it can handle any configuration of written material, video, audio, quizzes, polls, questions, and bulletin-board style discussions.
● Course Development Services – We understand you don’t want to spend your valuable time learning how to use software just to get your company training online. That’s why we do it for you! We can take your material and transform it into an online course or you can simply use the
courses we already have developed to meet important industry standards.

About OnlineEd®

OnlineEd, Inc. has been offering online vocational training since 1998. Years of developing and maintaining online learning management software for the mortgage and real estate markets has given us an edge in developing compliance training and tracking products designed specifically for the mortgage industry. We fully understand the nature of the mortgage industry is change and remain committed to maintaining and updating the system with new and exciting features. We are also interested in your input. If you have special needs or feature requests, we are happy to
work with you to make InlineEd your company’s compliance management system.

To learn more about InlineEd, please visit www.InlineEd.com or give OnlineEd a call at 866.519.9597. To learn more about OnlineEd, please visit www.OnlineEd.com.