Qualified Mortgage 3% rule Amended

The Qualified Mortgage/Ability to Repay 3% costs rule is amended by the Mortgage Choice Act which was approved by the US House of Representatives by unanimous vote yesterday. Read more at click

http://insurancenewsnet.com/oarticle/2014/06/10/huizengas-bipartisan-qualified-mortgage-legislation-passes-house-unanimously-a-515843.html#.U5bs_Ym9LTo

NY adopts new streamlined licensing process for mortgage

On June 5, 2014, Benjamin M. Lawsky, Superintendent of Financial Services, announced that the Department of Financial Services (DFS) is implementing a new streamlined licensing process for mortgage banking in New York.
http://dfs.ny.gov/about/press2014/pr1406051.htm
These measures include:
1. Adoption of the Uniform State Test effective September 2, 2014.
2. Transitional License Applications for Mortgage Loan Originators.
3. Cutting Down on Unnecessary Layers of Review.
4. Dedicated Mailboxes to Answer Questions.
5. Electronic Submission of Application Materials.
6. Elimination of “Placeholder Applications.”
7. Launch of New Comprehensive Online Resource Center providing access to new industry guidebooks, information regarding new proposed regulations and New York’s adoption of the Uniform State Test, and step-by-step directions on how to apply for a license to become a mortgage banker, mortgage broker, mortgage loan servicer, or mortgage loan originator, as well as how and when to apply for a change of control of a regulated entity, how to apply for a new branch location, and more.
8. DFS will be issuing comprehensive guidebooks that help companies and individuals to not only apply for a license, but to maintain a license.
9. Eliminating Unnecessary Regulatory Requirements, Clarifying the Rules of the Road
www.dfs.ny.gov/mortgage.

NY Mtg. Banker Licensing Time May Be Cut in Half ?

New York regulator Benjamin Lawsky said Tuesday, May 20, 2014, that the New York Department of Financial Services plans to improve the time and process it takes to get a mortgage license in New York. Lawksy plans to eliminate several layers of review for mortgage bankers to apply for a license or a new branch location. On licensing, Lawsky said his goal is to cut the current four-month wait time in half for lenders to get a license in New York.  “When I heard we were one of the slowest in the country, my reaction was to do a whole reform process and make us the fastest,” he said. “I want to be number one.”

http://www.nationalmortgagenews.com/news/servicing/ny-to-streamline-origination-licensing-expand-servicing-probe-1041821-1.html

CFPB has issued a Compliance Guide to assist in the implementation of the TILA-RESPA Integrated Disclosure rule effective 8/1/2015.

The Guide:

http://files.consumerfinance.gov/f/201403_cfpb_tila-respa-integrated-disclosure-rule_compliance-guide.pdf

The CFPB recently finalized the TILA-RESPA Integrated Disclosure rule, which makes mortgage disclosure easier for consumers to understand and use and helps facilitate compliance with TILA and RESPA. The rule takes effect August 1, 2015. Review the executive summary of the rule here.

http://files.consumerfinance.gov/f/201312_cfpb_tila-respa_executive-summary.pdf

Sections 1098 and 1100A of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) direct the CFPB to publish rules and forms that combine certain disclosures that consumers receive in connection with applying for and closing on a mortgage loan under the Truth in Lending Act (Regulation Z) and the Real Estate Settlement Procedures Act (Regulation X). Consistent with this requirement, the CFPB is amending Regulations X and Z to establish new disclosure requirements and forms in Regulation Z for most closed-end consumer credit transactions secured by real property. In addition to combining the existing disclosure requirements and implementing new requirements imposed by the Dodd-Frank Act, the final rule provides extensive guidance regarding compliance with those requirements.

EFFECTIVE DATE
This rule is effective August 1, 2015. The final rule applies to transactions for which the creditor or mortgage broker receives an application on or after that date.
http://www.consumerfinance.gov/regulatory-implementation/tila-respa/#disclosures

Here is a summary of the benefits to consumers of the combination of these 2 forms.
http://files.consumerfinance.gov/f/201311_cfpb_tila-respa_what-it-means-for-consumers.pdf

Are 3rd party loan processing companies struggling with whether to get their loan processors individually licensed?

I represent numerous companies that provide 3rd party loan processing services for large banks.  

The question:  Are 3rd party loan processing companies required to obtain MLO licenses for their loan processors or are they exempt?    

The problem: The reason this is a hot issue for loan processors is because of a little known, hidden provision of the SAFE Act that said: “(2) INDEPENDENT CONTRACTORS.—An independent contractor may not engage in residential mortgage loan origination activities as a loan processor or underwriter unless such independent contractor is a State-licensed loan originator.”   Therefore, the SAFE Act [which was adopted by each of the 50 states] stated that a Mortgage Loan Originator needs a MLO license but a W-2 “employee” loan processors is excluded while a 1009 “independent contractor” loan processors is included.  

The Solution:  If a company’s loan processors qualify as W-2 “employees” rather than 1009 “independent contractors” then they are exempt for obtaining a MLO license in the majority of the states but unfortunately not in CT or KY and a few others.