Fannie Mae recently updated its Selling Guide with announcement SEL-2019-03 which includes the requirement that lenders notify Fannie Mae using the self-report functionality in Loan Quality Connect within 30 days if the lender’s post closing quality control cycle is in arrears more than one 30-day cycle. Fannie Mae requires that mortgage loan post closing quality control reviews must be completed within 120 days from the month of the loan closing. If you need assistance in meeting this timing requirement, please contact Regulatory Solutions for all your post-closing quality control needs.
The FFIEC has released the 2019 edition of the “Guide to HMDA Reporting: Getting it Right!” which is available at https://www.ffiec.gov/hmda/. The new edition contains information regarding the amendments made to HMDA by the Economic Growth, Regulatory Relief, and Consumer Protection Act and updated HMDA interpretive and procedural rules issued by the Consumer Financial Protection Bureau. 2019 is the year to Get it Right! Regulatory Solutions has developed proprietary HMDA scrub software and has the expertise to scrub your HMDA data on a monthly or quarterly basis. Our HMDA scrubs compare your HMDA LAR to source documents. An exception report is issued to enable you to make corrections and a summary of exceptions is provided to assist you in addressing any systemic issues. Contact Regulatory Solutions today to begin your HMDA Scrubs.
Now that you have filed your 2018 Home Mortgage Disclosure Act (HMDA) data, it is time to focus on 2019. The CFPB has issued the new Filing Instructions Guide (FIG) for submissions and data collection which can be found on the FFIEC website. The only major change to the new HMDA FIG 2019 is that it now includes the new values for the data points that were exempted under the Economic Growth, Regulatory Relief, and Consumer Protection Act that went into effect in May 2018. The HMDA FIG 2019 can be found here: https://ffiec.cfpb.gov/
While there are no substantial changes as to how you compile and submit your data, it is important to point out that 2019 is the first year that the CFPB will assess penalties under the revised HMDA regulation. If you struggled with compiling and scrubbing last year’s HMDA data, Regulatory Solutions is here to help. Using our proprietary HMDA scrub software, we compare your source documents in the loan file to the data points recorded on the HMDA LAR and provide you with an exception report detailing data points needing correction. Contact us today to being your 2019 HMDA LAR Data Scrub.
Today the CFPB posted four Frequently Asked Questions relating to TRID. Three of the questions relate directly to corrected closing disclosures and the three business-day waiting period before consummation and the fourth question relates to the model forms. You can read the CFPB questions and answers at https://www.consumerfinance.gov/policy-compliance/guidance/tila-respa-disclosure-rule/tila-respa-integrated-disclosure-faqs/.
Regulatory Solutions provides comprehensive TRID reviews to ensure you are in compliance with the TILA-RESPA requirements. If you would like to discuss how we can assist you with your TRID reviews, please contact us at Betsy.email@example.com or Rhonda.firstname.lastname@example.org.
The Consumer Financial Protection Bureau announced the adjusted asset-size exemption threshold for depository institutions for HMDA (Regulation C). The exemption threshold has been increased from $45 million to $46 million. Based on this adjustment, banks, savings associations, and credit unions with assets of $46 million or less as of December 31, 2018 are exempt from collecting data in 2019. Remember, 2018 HMDA data is reportable by March 1, 2019. If you need assistance with scrubbing your HMDA data for 2018, contact Regulation Solutions today!
The Bureau of Consumer Financial Protection issued an interpretive and procedural rule on August 31, 2018, to implement and clarify section 104(a) of the Economic Growth, Regulatory Relief, and Consumer Protection Act, which amended certain provisions of the Home Mortgage Disclosure Act (HMDA). The rule allows certain insured depository institutions and insured credit unions (based on thresholds for the number of closed-end and/or open-end loans originated during a given year) to be partially exempt for certain data point reporting. Below is a chart detailing the data points covered by the partial exemptions and the correct code to use on the HMDA LAR to signify exemption.
Regulatory Solutions has developed proprietary software to complete your HMDA Scrubs. Please contact us today to discuss how we can help you ensure your HMDA data is correct
Data Points Covered by Partial Exemptions
|Data Points Covered by Partial Exemptions||Correct Code for Exemption|
|§ 1003.4(a)(1)(i) – Universal Loan Identifier||Unique, within the insured depository institution, loan or application identifier that can be up to 22 characters|
|§ 1003.4(a)(9)(i) – Property Address (street address, city, zip code)||Exempt|
|§ 1003.4(a)(12) – Rate Spread||Exempt|
|§ 1003.4(a)(15) – Credit Score||1111|
|§ 1003.4(a)(15) – Name and Version of Credit Scoring Model||1111|
|§ 1003.4(a)(16) – Reasons for Denial||1111 (Leave the remaining Reason for denial data fields blank)|
|§ 1003.4(a)(17) – Total Loan Costs or Total Points and Fees||Exempt|
|§ 1003.4(a)(18) – Origination Charges||Exempt|
|§ 1003.4(a)(19) – Discount Points||Exempt|
|§ 1003.4(a)(20) – Lender Credits||Exempt|
|§ 1003.4(a)(21) – Interest Rate||Exempt|
|§ 1003.4(a)(22) – Prepayment Penalty Term||Exempt|
|§ 1003.4(a)(23) – Debt-to-Income Ratio||Exempt|
|§ 1003.4(a)(24) – Combined-Loan-to-Value Ratio||Exempt|
|§ 1003.4(a)(25) – Loan Term||Exempt|
|§ 1003.4(a)(26) – Introductory Rate Period||Exempt|
|§ 1003.4(a)(27) – Non-Amortizing Features|
Other Non-Amortizing Features
|1111 (enter code for each one)|
|§ 1003.4(a)(28) – Property Value||Exempt|
|§ 1003.4(a)(29) – Manufactured Home Secured Property Type||1111|
|§ 1003.4(a)(30) – Manufactured Home Land Property Interest||1111|
|§ 1003.4(a)(32) – Multifamily Affordable Units||Exempt|
|§ 1003.4(a)(33) – Submission of Application||1111|
|§ 1003.4(a)(33) – Initially Payable to Your Institution||1111|
|§ 1003.4(a)(34) – Mortgage Loan Originator Identifier||Exempt|
|§ 1003.4(a)(35) – Automated Underwriting System (AUS)||1111 (Leave the remaining AUS blank)|
|§ 1003.4(a)(35) – Automated Underwriting System Result||1111 (Leave the remaining AUS results blank)|
|§ 1003.4(a)(36) – Reverse Mortgage Flag||1111|
|§ 1003.4(a)(37) – Open-End Line of Credit Flag||1111|
|§ 1003.4(a)(38) – Business or Commercial Purpose Flag||1111|
In the mortgage world when you say the words quality control, post closing quality control loan file reviews immediately come to mind. Did you know that non-originated loan reviews are also considered a part of quality control? Freddie Mac’s Quality Control Best Practices states that as part of your quality control process you should include a random sample of your declined loan applications. In addition, FHA requires that you review a random statistical sample of rejected applications within 90 days from the end of the month in which the decision was made. Regulatory Solutions can assist you with these monthly non-originated reviews to ensure you are in compliance with agency and regulatory requirements including the Equal Credit Opportunity Act (ECOA).
We are just over half way through the new year under the new Regulation C rules which changed the Home Mortgage Disclosure Act (“HMDA”) reporting requirements. Have you scrubbed your HMDA data in accordance with the new rules? If not, let Regulatory Solutions help! We have developed proprietary HMDA Scrub software to assist in the data integrity review of your HMDA data. Our software produces exception-based reports so that you know exactly what corrections need to be made by loan number. The report also provides you with a total number of exceptions and percentages based on data points.
Now that the first quarter of HMDA reporting under the news rules is complete – one consistent question we receive is regarding whether a particular commercial/business purpose loan is HMDA reportable?
Under Regulation C if a closed-end mortgage loan or an open-end line of credit is for commercial/business purpose and is secured by a dwelling and is for a home purchase, refinance (dwelling secured loan replacing dwelling secured loan) or home improvement then it is HMDA reportable. Remember that on home improvement it must also be secured by a dwelling. Non-dwelling secured loans for the purpose of home improvement are no longer reportable. Also, remember a dwelling is not limited to just a 1-4 family structure but includes multifamily dwellings that contain five or more dwelling units and includes a manufactured home community.
You must look both at purpose and security to determine if the commercial/business loan is reportable. For example, if the purpose of the loan is for cash flow and it is secured by the owner’s primary dwelling, then the loan would not be HMDA reportable because the purpose is not home purchase, refinance or home improvement. However, if the borrower asks to refinance a loan secured by their dwelling for cash flow purposes for their business, the loan would be HMDA reportable because the purpose is refinance as a dwelling secured loan which replaces a dwelling secured loan.
Regulation C Section 1003.3(c)(10) and the official interpretations set forth the rules regarding closed-end mortgage loan or an open-end line of credit that is or will be made primarily for a commercial or business purpose.
Using our proprietary HMDA Scrub software, Regulatory Solutions is your source for HMDA Scrubs. Please call us at 855-734-7655 for details.
FHA requires that pre-funding (pre-closing) quality control loan reviews should occur each month and that the loans selected for review must have been approved by an FHA Direct Endorsement underwriter before the pre-funding (pre-closing) quality control loan review can take place. According to FHA, the review should be 10% or less of the sample size and the review staff should operate independently from the Lender’s loan production or administration process. If nine or fewer FHA loans were closed during the prior month, then at least one FHA loan must be selected for pre-funding (pre-closing) quality control loan review. FHA also requires that the Lender verify that none of the participants in the transaction are debarred or suspended under an LDP and FHA program.
The following documents must be a part of the pre-funding (pre-closing) quality control loan review: appraisal; mortgage application, eligibility, and all underwriting documents; disclosures and legal compliance; mortgage origination documents; handling of mortgage documents; credit reports (a new report does not have to be ordered); any outstanding debt obligations; verifications of employment and deposit; self-employment information; source of funds; underwriting completeness and accuracy; property flipping restrictions; prohibited restrictive covenants; QM; Loan Estimate; any discrepancies in the loan file; and verification of any condition clearance. The results of the reviews must be reported to senior management on a monthly basis. The feedback that is provided should be used to create Action Plans so as to prevent the same mistakes from happening in the future. Any conflicting information in these documents should be resolved with the underwriter and any discrepancies found have to be resolved before closing. FHA also requires that if any discoveries of fraud or material misrepresentations are found during the review, they should be reported immediately to HUD/FHA.
Regulatory Solutions is available to assist you. Just visit our pre-funding/pre-closing quality control reviews page. Regulatory Solutions will provide you with the independent solution you need to ensure your pre-funding files are reviewed in accordance with agency guidelines.