“New Foundations for Community-based Energy Efficiency: Plans , Programs, and Transformational Changes to Housing” Sponsored by HUD-FHA. This conference is highly recommended for local governmental agencies, public housing authorities, affordable housing sponsors, community housing development organizations, lenders, builders & real estate professionals who want to learn about the transformational changes at Federal, State, and local levels to Housing & Communities through Energy Efficiency programs and mortgage products. Registration required, no fee.

June 17, 2009 8:30AM—4:30 PM;  Chapman University College,  Orange, CA

Register at: http://www.hud.gov/event_registration/index.cfm

On April 30,2009, the FTC delayed the date for you to have your Red Flags Rule Policy in place until August 1, 2009.

The rule requires mortgage brokers to develop and implement a written Identity Theft Prevention Program to detect, prevent, and mitigate identity theft in connection with certain financial accounts.  Also required is identity theft detection training for employees including processors, loan officers, and sales managers.  The guidelines accompanying the final rule are designed to assist financial institutions and creditors in formulating and maintaining a Program that satisfies the requirements of the new rule.

There are a number of options for you to choose from for help with Red Flags Rule compliance.  As a member of AAMB and NAMB you can use the red link below for a discounted sample Red Flag Rule Policy,  Also, some of the Credit Reporting Agencies have samples for your use.  At any rate, don't put it off any longer.  Get your Red Flags Rule Policy in place soon.

NAMB Summary – Red Flag Rule

1) Develop a written program to detect and respond to potential ID theft.
Red Flag Rule detection programs should be appropriate to your company.  They can be complex customized solutions or simplistic templates, but must be complete in scope and adhered to by your company.  Detection of identity theft can be accomplished through 3rd-party solutions.
2) Train employees on detection.
You must train employees who are in a position to detect ID theft.  This may be processors, Loan Officers, Sales Managers, and more, depending on your operation.  Your plan will address this.
3) Update and review your program annually.
The written program must be approved by your leadership annually.

The Obama Administration announced new guidelines on Tuesday, April 28, for its foreclosure prevention program to deal with borrowers who have subordinate lien mortgages and home equity lines of credit.

The revised plan requires a mortgage servicer that modifies a first lien mortgage to modify the second lien mortgage at the same time. Under the plan the government will either share in the cost of reducing the second mortgage interest rate for five years, or pay the second mortgage holder to forgive the debt.

A mortgage servicer that modifies a second mortgage will receive an upfront payment of $500 and $250 each year for up to three years following a successful modification. The plan also provides that a borrower who stays current on modified loan payments for multiple loans would receive $250 per year for up to five years to assist the borrower in paying the balance of the first lien mortgage. Additional details of the plan are available on www.makinghomeaffordable.gov .

The Fannie Mae/Freddie Mac Home Valuation Code of Conduct (“Code”) becomes effective on May 1, 2009. All lenders, correspondent lenders, and servicers selling loans to Fannie Mae/Freddie Mac will be required to adhere to the Code.
The Code of Conduct establishes:

by Josh Brodesky - Arizona Daily Star - April 8, 2009

The number of Pima County homeowners facing foreclosure surged in the first quarter, as banks issued foreclosure notices to more than 3,000 properties.

With 3,054 trustee sale notices issued in the first three months of the year, Pima County is on pace to easily surpass the 8,956 such notices issued in 2008.

Trustee sales notices are filed after property owners have been in default for at least three months. Although such notices don't necessarily result in foreclosure, they are a good indicator of distressed properties.

Although the surge in foreclosure notices is jarring, University of Arizona economist Marshall Vest said he thought it signals a potential bottom point.

"I think we are seeing the very worst of the numbers," he said. "It's not just the foreclosures, but many other measures of the economy as well. The economy was in free fall for the fourth quarter and that has continued in the first quarter. I think the economy is in the early stages of forming the bottom, and we will see that, I think, in the months ahead."

While Vest said he didn't anticipate the economy would improve right away, he saw key indicators such as consumer confidence and consumer spending leveling. Unemployment, a lagging indicator, will continue to rise to roughly 10 percent and so foreclosure notices will continue at this pace for the short term, he said.

The unemployment rate recently hit 8.5 percent nationally and was most recently recorded at 7.4 percent and rising statewide.

"It certainly parallels the loss of jobs," Vest said. "You lose a job, you may not be able to pay that mortgage, and employment is declining at a fairly rapid rate."

Job losses have become an increasingly frequent reason why homeowners have fallen into foreclosures, said Cheri Horbacz, program manager for Don't Borrow Trouble, a non-profit that directs Pima County homeowners to various resources for help.

"The majority of the calls have made a shift from a loan-based foreclosure to employment-based foreclosure where people are being laid off or facing a reduction in hours or having to take pay cuts," Horbacz said.

These cases are often harder to work out modifications with lenders simply because there is no income stream to pay off a loan.

"It may make it harder to have a workout plan where their only source of income is unemployment," Horbacz said. "Servicers are looking for solutions, but it has to be a solution that makes sense, and they can't really justify any payment plan if there is no income."

Horbacz said it wouldn't surprise her to see 12,000 foreclosure notices in Pima County this year.

Retiree Frank Carlino, 71, is facing foreclosure on his north side home after buying it for $200,000 in 2006.

Saddled with a first and second mortgage that total about $1,300 a month in payments, Carlino said he can't make his second mortgage because he's seen a drop in his life savings of about 50 percent.

He had invested in mutual funds, but after they plunged in value he moved his savings to two annuities that combined pay him about $500 a month.

"I almost lost half of what I had," he said. "I said 'take it out and close my funds out, I can't afford to lose anymore. I can't take any risk with what I have left.'"

Carlino has been trying to modify his second mortgage with Bank of America, but so far he has had little luck.

"I am in this sort of limbo, in a sense, not knowing what is going to happen," he said.

John L. Strobeck, who tracks Southern Arizona real estate and housing data, said he was surprised to hear so many trustee notices have been filed this year. He expects the notices to translate into at least 3,000 foreclosed home sales in the Tucson area this year.

"Foreclosures have become the third leg of the market," Strobeck said.

The Department of Housing and Urban Development released Mortgagee Letter 2009-09, establishing new appraisal requirements for FHA loans, on March 23, 2009. Beginning April 1, 2009, all Federal Housing Administration (“FHA”) Roster Appraisers will be required to complete the Market Conditions Addendum, (Fannie Mae Form 1004MC/Freddie Mac Form 71), in addition to documentation required under the Uniform Standards of Professional Appraisal Practice (USPAP). The Market Conditions Addendum will provide lenders with a clear and accurate understanding of the market trends and conditions prevalent in the subject neighborhood.

Also effective April 1, 2009, appraisers will be required to use closed comparable sales, active listings, and pending sales for appraisals in declining markets. For purposes of performing appraisals of properties that are to be collateral for FHA insured mortgages, a declining market is considered to be any neighborhood, market area, or region that demonstrates a decline in prices or deterioration in other market conditions as evidenced by an oversupply of existing inventory or extended marketing times. Information about appraisal practices in declining markets is available in Mortgagee Letter 2007-11. Guidance regarding when second appraisals are necessary can be found in Mortgagee Letter 2008-09.

Copies of Mortgagee Letters 2009-09, 2007-11, and 2008-09 are available on www.iComply.com  under the Resources tab.

In a speech before the U.S Chamber of Commerce 3rd Annual Capital Markets Summit, Dimon stated that his failure to terminate the company’s mortgage broker business was the “biggest mistake” of his career. NAMB President, Marc Savitt, CRMS, has issued the following statement in response to these comments:

“It is disappointing to once again refute senseless attacks on the mortgage brokerage industry based on misinformation.  Mr. Dimon’s comments clearly reflect his poor understanding of the mortgage industry and the role of the mortgage broker.  NAMB urges Mr. Dimon to recognize that mortgage brokers do not create loan products, do not determine the automated underwriting systems used to qualify borrowers, do not underwrite the loans, and do not approve borrowers for those loans – Wall Street investment banks ‘who are now out of business’ did that.”
Furthermore, Mr. Dimon’s remarks on U.S. economic outlook to the Economic Club of Washington acknowledges the real problem was a failure of management saying, “Bad underwriting was totally to blame, however we didn’t see the results because the housing market was so good and we didn’t see any losses.”  Underwriting is the fundamental role of his bank and his management and any bad underwriting is due to their poor judgment. 

“I understand the need to blame someone outside the financial institutions for the failures of leadership and accountability to their respective Boards of Directors” Savitt said, “but Mr. Dimon should admit to the world that they created mortgage products and sold them through all origination channels – banks, lenders, credit unions, homebuilders, mortgage brokers – based on Wall Street’s determination that they could be securitized and sold to investors across the globe.  Most Wall Street investment banks owned the largest of the sub-prime lenders, a fact Mr. Dimon failed to disclose in his remarks.”   

Mortgage brokers work with consumers to help them through the complex mortgage origination process. We add value to the process for both consumers and lenders by serving areas that are typically underserved by banks and other lending institutions. Mortgage brokers also add value by providing goods, facilities, and services with quantifiable value, including a customer base and goodwill.

Separately, NAMB would like to commend the Union Bank of California in its due diligence in approving mortgage brokers as a reliable delivery channel for mortgage loans. Union Bank Senior Vice President Craig Cole stated to The Orange County Register, “Most lenders mismanage the broker channel by not being disciplined about who they work with and offering products indiscriminately through that channel.” The careful monitoring of all loans funded by banks is a critical component of prudent lending.

McLean, VA – The National Association of Mortgage Brokers (NAMB), with the support of Baker & Hostetler LLP, filed a lawsuit today with the United States District Court for the District of Columbia against the Federal Housing Finance Agency (FHFA) Director James B. Lockhart over the controversial Home Valuation Code of Conduct (HVCC) included in the appraisal agreements between the FHFA, Fannie Mae and Freddie Mac (GSEs), and New York Attorney General Andrew Cuomo.

“The HVCC does nothing but drive up costs for consumers and push small businesses out of the market,” said NAMB President, Marc Savitt. “The HVCC will drastically reduce the ability of mortgage brokers to provide consumers with an efficient and cost-effective means of obtaining a mortgage.”

NAMB strongly supports policy initiatives that seek to ban coercion of appraisers. However, NAMB believes it is critical for mortgage and real estate professionals to maintain an appropriate level of contact with appraisers to ensure appraisal quality and independence. NAMB argues the HVCC is a “de facto” regulation and holds the FHFA in violation of the Administrative Procedures Act of 1992. The HVCC is arbitrary and capricious, contrary to the intent of Congress and in direct conflict with regulations, policies and guidelines regarding appraisal standards already issued.

“Despite strong opposition by numerous industry representatives, the FHFA, GSEs and New York Attorney General fail to consider the unavoidable increase in costs to consumers should the agreements take effect,” said Savitt. “The lawsuit is the only remaining option to protect small businesses mortgage professionals from the severe competitive disadvantages caused by the agreement. The agreements will also have significant negative consequences for consumers.”

To see a copy of the lawsuit: Click Here
To view the HVCC Agreement: Click Here
TO CONTRIBUTE TO NAMB'S LAWSUIT TO BLOCK HVCC: Click Here

Today, the Department of Housing and Urban Development issued a final rule regarding RESPA that delays the effective date for the revised definition of “required use” stated in the final rule published November 17, 2008 at 73 FR 68204. This revised definition will now be effective on April 16, 2009 instead of January 16, 2009. Today’s final rule is published at 74 FR 2369.

The revised disclosure is simpler than the current version and is only a 1 page document.  
The revised mortgage servicing transfer disclosure becomes effective on April 16, 2009 and can be viewed here.

House Financial Services Committee Chairman Barney Frank introduced H.R. 384, the TARP Reform and Accountability Act of 2009 on January 9, 2009. Mortgage provisions of the bill target mortgage servicers and foreclosure mitigation. The legislation provides a safe harbor from liability to servicers who engage in loan modifications, regardless of any provisions in their servicing agreements, so long as the servicers’ actions are consistent with the duties established in Homeowner Emergency Relief Act. The bill further requires litigants who bring suit unsuccessfully against servicers for engaging in loan modifications under the Act to pay the servicers’ court costs and legal fees. Under the proposed legislation, servicers who modify loans under the safe harbor must regularly report to the Treasury on the extent, scope and results of the servicer’s modification activities.

The bill also requires that at least $40 billion of the remaining $350 billion of TARP funds are to be used for foreclosure mitigation programs, including servicer incentives for implementing loan modification programs.

A full copy of H.R. 384 is available at www.iComply.com , in the Resources section.

McLean, Va. – December 19, 2008 – The National Association of Mortgage Brokers (NAMB) filed a lawsuit against the U.S. Department of Housing and Urban Development (HUD) after it recently issued the Real Estate Settlement Procedures Act (RESPA) Final Rule issued November 17, 2008.

Click here to see the full press release

On Wednesday, November 12, 2008, the Department of Housing and Urban Development (HUD) issued a press release announcing the finalization of its changes to the Real Estate Settlement Procedures Act (RESPA). Although the text of the final RESPA rule is not yet available, HUD has released a Fact Sheet on the final Rule as well as a copy of the new GFE and HUD-1. See below for the contents of the Fact Sheet and GFE, HUD-1 attachments.

NAMB will be issuing a press release announcing its disappointment with the final RESPA rule once it is released. NAMB believes that the final rule will hinder competition in the market and increase costs to consumers.

In addition, NAMB will be calling upon Congress to take immediate action to review the rule. Please visit www.namb.org for a copy of the NAMB press release once it is issued, as well as other updates. For a copy of HUD’s press release, please click here.

Last March, HUD proposed reforms to the regulatory requirements of RESPA that would, among other things, call for mortgage brokers to disclose yield spread premium (YSP) as a “credit to the borrower” on a new Good Faith Estimate (GFE). NAMB sent a comment letter to HUD highlighting areas of the rule that would put consumers and brokers at a disadvantage.  NAMB also called for the removal of the rule altogether in conjunction with a letter from Congress.

New HUD GFE Form

New HUD-1 Form

Fact Sheet on HUD's final RESPA Rule (available on the HUD website, as well)

For the first time ever, HUD will require mortgage lenders and brokers to provide borrowers with an easy-to-read standard Good Faith Estimate (GFE) that will clearly answer the key questions they have when applying for a mortgage including:

·         What's the term of the loan?
·         Is the interest rate fixed or can it change?
·         Is there a pre-payment penalty should the borrower choose to
           refinance at a later date?
·         Is there a balloon payment?
·         What are total closing costs?  

HUD estimates that by improving upfront disclosures on the GFE, and limiting the amount estimated charges can change, consumers will save nearly $700 in total closing costs.

Based on substantial public comment, HUD withdrew a proposed requirement that closing agents read and provide a 'closing script.' Instead, to borrowers in favor of a new page on the HUD-1 Settlement Statement that allows consumers to easily compare their final closing costs and loan terms with those listed on the GFE.

HUD's new Good Faith Estimate has been reduced from four to three pages, including an instructional page to help borrowers better understand their loan offer. In addition, the GFE will consolidate closing costs into major categories to prevent junk fees and display total estimated settlement charges prominently on the first page so the consumer can easily compare loan offers. HUD will specify the closing costs that can and cannot change at settlement. If a fee changes, HUD will limit the amount it can change.

To help borrowers compare their Good Faith Estimate with their HUD-1 Settlement Statement, each designated line on the final HUD-1 will now include a reference to the relevant line from the GFE. Borrowers will now be able to easily compare their estimated and actual costs in the same manner many commenters suggested.

HUD will require lender payments to mortgage brokers (often called Yield Spread Premiums) to be disclosed in a more meaningful way. These payments are directly dependent on the interest rates that consumers agree to. To ensure that HUD's new requirement will not create a consumer bias against brokers, the Department did rigorous consumer testing and found the new Good Faith Estimate helped consumers to select the lowest cost loan nine-out-of-10 times, regardless of whether the loan was originated by a lender or a broker.

Loan originators will be required to provide borrowers their Good Faith Estimate three days after the loan originator's receipt of all necessary information. To facilitate shopping, loan originators could not require verification of GFE information (tax returns, etc.) until after the applicant makes the decision to proceed.

HUD will allow lenders and settlement service providers to correct potential violations of RESPA's new disclosure and tolerance requirements. Lenders and settlement service providers will now have 30 days from the date of closing to correct errors or violations and repay consumers any overcharges.

The new, standardized GFE and revised HUD-1 will not be required until January 1, 2010.  

President Bush has signed the far-reaching and historic plan to bail out the nation's ailing financial system. The measure passed the House today by a comfortable margin. "We have acted boldly to prevent the crisis on Wall Street from becoming a crisis in communities across our country," Bush said.

Read the new bill HR 1424 (It's a LARGE PDF file - 451 pages)
http://money.cnn.com/2008/10/01/news/pdf/index.htm