It’s full employment time for residential mortgage compliance professionals.The Mortgage Disclosure Improvement Act (MDIA) has taken effect, changing the way borrowers get their TIL disclosures and forcing brokers to work more-closely with lenders to get a TIL disclosure in the borrower’s hands shortly after application. Additional changes to the Truth in Lending Act take place October 1, 2009, as do changes to the Home Mortgage Disclosure Act. The Home Valuation Code of Conduct continues to vex appraisers, real estate agents, brokers and borrowers. The mainstream news media is noticing issues created by the Code, including low appraisals, inexperienced appraisers and difficulty in transferring appraisals from one lender to another. But, so far, it doesn’t appear that the Code is in danger. Major changes to the Real Estate Settlement Procedures Act go into effect January 1, 2009. These changes dramatically alter the Good Faith Estimate and the HUD-1. Although many in Congress want HUD to delay the changes and work more-closely with the Federal Reserve Board to create a single disclosure, HUD is sticking to its guns. Recently it issued responses to industry questions about the changes. Many in the industry were puzzled by the responses; most seemed to simply restate HUD’s previously-released explanations. In late July, the Federal Reserve Board proposed major changes to the Truth in Lending Act. The changes would apply to both closed-end mortgage loans and HELOCs and would require borrowers be provided more information than they now get about their loan. The proposal also limits the ability of lenders to pay yield spread premiums to brokers. Many see the proposal as the Fed’s response to stinging congressional criticism that the Board didn’t do enough to protect mortgage consumers during the boom years. The Obama administration continues to push for a Consumer Financial Protection Agency. The agency would take over many of the duties of existing federal agencies regarding the regulation of mortgage loans. It is a controversial proposal and faces an uncertain future in the House and Senate. At the state level, the Model Examination Guidelines, written by the Conference of State Bank Supervisors, are being adopted nationwide. All of this is on top of the SAFE Act - the federal law that requires all loan originators working for non-depositories be licensed and all loan originators working for banks and credit unions be registered. For the first time, consumers will be able to see the disciplinary record of a loan originator before they decide to do business with them. |