Appraisals

Appraisals for Higher-Priced Mortgage Loans For higher-priced mortgage loans, or HPML’s, there are new rules on appraisals that will become effective on January 18, 2014.  HPML’s are loans that used to be referred to as subprime mortgage loans. For higher-priced mortgage loans, full interior appraisals are required. This requirement expands consumer protections for HPML’s by adding new appraisal provisions to the Truth in Lending Act. At the time of application, the borrower must be provided with an appraisal notice.  It must state the purpose of the ...

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Protect Your Most Valuable Possession – Your Home

The Consumer Financial Protection Bureau (CFPB), has issued new protections to help homeowners having trouble making mortgage payments or/who are seeking a loan modification. Below is an overview of some of these. Better Communication and Information Once a borrower misses two consecutive monthly mortgage payments, the loan servicer must include information about the defaults in the next monthly mortgage statement. Also, a Loss Mitigation Notice must be sent to the borrower within 15 days of the second missed mortgage payment. The Notice has to include the following:...

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The CFPB is Protecting Nobody By Standardizing Loan Officer Comp….And, Why Every Homeowner Should Care!

The Consumer Financial Protection Bureau is attempting to establish standards for what mortgage loan officers should be paid.  And, I don't mean in a way that will protect consumers in any way, shape or form as their name implies. One example of this is a potential rule that would limit MLO compensation to a set dollar amount as opposed to a percentage of the loan amount.  This will mean that a loan officer would make the same $1,000, $2,000 or $5,000 on every loan regardless of the amount of the loan. So, why should every homeowner care? Well, in addition to the ...

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Do You Hate Receiving Unsolicited credit card, insurance and mortgage calls?

From the Federal Trade Commission's Website: If you decide that you don't want to receive prescreened offers of credit and insurance, you have two choices: You can opt out of receiving them for five years or opt out of receiving them permanently. To opt out for five years: Call toll-free 1-888-5-OPT-OUT (1-888-567-8688) or visit www.optoutprescreen.com. The phone number and website are operated by the major consumer reporting companies. To opt out permanently: You may begin the permanent Opt-Out process online at www.optoutprescreeen.com. To complete your request, ...

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Why Expecting the Federal Government to Fix the Housing Problem is Unrealistic.

When NASA first started sending up astronauts, they quickly discovered that ballpoint pens would not work in zero gravity.  To combat the problem, NASA scientists spent a online casino decade and $12 billion to develop a pen that writes in zero gravity, upside down, underwater, on almost any surface including glass and at temperatures ranging from below freezing to 300 centigrade. The Russians used a pencil.

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What is really wrong with mortgage lending or why is it so hard to close on a mortgage?

[Note, this Blog post is my answer today to an actual client's email regarding a nearly 10 day delay on confirming the client's identity.  In answering it, I detail the real problems in the mortgage industry.  The email trail (with identifying information removed) is attached below for context.] Dear Borrower (“B”): The name of the lender is _______   Here is the Wikepedia link about them.  They are a huge financial institution headquartered in the Midwest with over $100B in deposits.  We have done many loans with them and once they close have not had ...

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HARP 2.0 Refinance Program Another Government Boondoggle Destined for Failure

On Monday, October 24th, to much fanfare, the Federal Housing Finance Agency announced that they were revising the Homeowners Affordable Refinance Program (a/k/a HARP).  In addition to lowering some of the costs of refinancing (which will certainly be appreciated and is helpful but is not an impediment to refinancing in most cases), the major revision was the lifting of the equity cap of 125% for "underwater" homeowners. Previously, HARP provided that a homeowner could refinance if they had up to 25% of negative equity (i.e. a 125% loan to value). Under HARP, which ...

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URGENT-Loan Amounts of $625,500-$729,250 Must Be Refinanced by September 30th for Best Pricing!

Since 2008, Fannie Mae and Freddie Mac have made loans available in amounts over the standard conforming (i.e. non-jumbo) lending loan limit of $417,000.  These loans, which are in amounts of $417,000-$729,250 are known as either High Balance Loans or Jumbo Conforming Loans.  These loans were  designed to fill part of the gap in the lower end of the Jumbo loan market that disappeared in 2008 with the collapse of the secondary  market. However, the original limits of these High Balance loans was only $625,500. There was a "temporary" 1 year increase of the loan ...

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Loan Officer Compensation and Anti-Steering Under Changes to Regulation Z

One of the major concerns under the new Dodd-Frank Law was the payment of commissions to mortgage loan officers.  The issue was that loan officers would often place borrowers into higher interest rate products to make additional compensation for themselves. As such, Dodd-Frank  ordered changes made to Regulation Z to address the ways mortgage companies generally and loan officers specifically were compensated. Attached is a link to the above online course that I presented live on June 28th detailing these changes to Regulation Z.  The course is free and runs for ...

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From the Sublime to the Ridiculous

Phil Hall writes about the new Consumer Financial Protection Bureau which "comes to life" on July 21st (and I concur): "Next week is the premiere of two highly anticipated endeavors: the Hollywood blockbuster 'Captain America: The First Avenger' and the Consumer Financial Protection Bureau (CFPB). One of these is a ridiculously expensive production that traffics in a juvenile fantasy about an over-the-top crime fighterFrom the Sublime to the Ridiculous going to wild extremes in the pursuit of justice. The other is a movie."  

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