FEDERAL LEGISLATION
FEDERAL RESERVE PULLS A FAST ONE
In case you haven’t heard, there are new rules that revise the disclosure requirements for mortgage loans under Regulation Z. The revisions implement the Mortgage Disclosure Improvement Act (MDIA) that was signed into law last summer as part of the Housing and Economic Recovery Act. Effective with all applications taken on or after July 30, 2009,
New timing requirement. The Truth in Lending disclosure must not only be delivered or placed in the mail no later than three business days the signed application, and at least seven day before closing of the transaction.
Upfront Fees. The new ruling sets a limitation on what fees may be collected prior to receiving the signed Truth in Lending. The ruling is specific that the only fee a Loan Originator may collect prior to receiving the signed truth in lending is the credit report fee.
Redisclosure. You are required to re-disclose, and provide the borrower a new truth in lending statement if the APR is revised. The consumer must receive the new disclosure at least 3 days prior to closing of the transaction.
New content. Early disclosure must include the following statement “You are not required to complete this agreement merely because you have received these disclosures or signed a loan application.”
S.A.F.E and NMLSR.
Brokers whose licenses are up for renewal in 2009, may end up with their renewals being pro-rated through Dec. 31, 2010 and those with license renewals next year will integrate into the new National Mortgage Licensing Registration system. There are not any qualifying educational courses approved yet. If you currently have a Broker license and took the current state test, you most likely will not have to take the state test again, just the Federal test.
Red Flag Rule
The deadline for having your Red Flag compliance policy in place has been pushed back to August 1st, 2009. Several of the credit companies are offering a pre-packaged policy. If you have not yet adopted a policy check with one of them to get you prepared for compliance. Remember, your written policy will be a part of your TSML inspection and not having one could put you in jeopardy of failing the inspection. Check out the update TSML website for more information.
Texas H.B. 10
If the current Texas Legislature fails to pass this bill, Texas will not be in compliance with the SAFE Act. Look for this bill to pass this week to bring the Texas Mortgage Broker Licensing Act up to dated.
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