Thursday, September 6, 2012

Less Than 150 Days

That's how long the Consumer Financial Protection Bureau has to issue all of these complicated residential mortgage finance rules in final form:

  • Qualified Mortgage standards.
  • Truth in Lending Act regulations for ability to repay.
  • Mortgage originator standards and compensation prohibitions.
  • Quality control standards for automated valuation models.
  • Servicing standards and disclosure requirements.
  • Combined integrated disclosure forms.
  • High-cost mortgage definition.
  • Appraisal independence.
And then the rush is on to figure out how to enforce the new rules... so much to do, so little time.

New CFPB proposals and where they are likely to trip you up.
  • Those who've had an early look at the CFPB's servicing proposal are concerned that compliance with the CFPB rules could cause servicers to run afoul of other regulations and investor agreements. Will your existing agreements collide with new federal rules?
  • The bureau's proposal for supervising nonbank mortgage lenders has some hidden potholes, including a strict waiver regime that may limit a nonbank's defense to arguments or evidence presented in an initial written response. Will you be prepared to adequately defend yourself when the CFPB comes knocking?
New and changed state regulations and what you have to do to fall in line with them.
  • California has a new Homeowner Bill of Rights that will require all servicers conducting business in the state to follow most of the standards imposed on the top five players by the national servicing settlement. The becomes effective Jan. 1, 2013. How will you retrain your staff to meet the new provisions?
  • Texas changed its disclosure form requirements in mid-June with a July effective date. The state has promised not to hand our violations for using outdated forms until Sept. 1. Are your vendors updating their systems quickly enough?
Litigation and settlements and the lessons to be learned from them.
  • Wells Fargo's $175 million fair lending settlement coincided with its decision to discontinue funding mortgages from independent brokers. Do you have safeguards in place to reduce your liability for acts by third parties?
  • A federal judge has rejected an industry challenge to the Department of Labor's interpretation that loan officers are owed extra pay for overtime. What are your payroll practices?

*Let us know your thoughts and concerns regarding CFPB and what is to come!

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