Friday, May 23, 2008 - Legislative Update

Friday, May 23, 2008 - 2008 Q2 Newsletter!

Friday, May 23, 2008 - FHA Approval

Friday, May 2, 2008 - RESPA Rewrite 2008

The Real Estate Settlement Procedures Act, enacted in 1974, has had only a few amendments since then.  HUD is responsible for enforcement and oversight of RESPA.  RESPA pertains to all settlement service providers which include Real Estate and Mortgage practitioners, title insurance companies, appraisers, etc.

You may recall an attempt to rewrite RESPA in 2002 by Mel Martinez, the Secretary of HUD at that time.  The rewrite did not successfully pass after Martinez resigned, returned to Florida, ran for office, and is now US Senator Mel Martinez.  HUD was then headed by Alphonso Jackson, the former Director of the Dallas Housing Authority.  Jackson resigned recently under pressure put to the Whitehouse by Democrats who felt that allegations of Jackson’s behavior stood in the way of FHA programs needed immediately to rescue people facing foreclosures.

The latest RESPA rewrite has made its way to the Federal Registry for public and industry comment and will expire on May 13, 2008.  HUD says the revised RESPA rule will improve and standardize the Good Faith Estimate (GFE) form.  HUD believes the new GFE will help a consumer to do price shopping and understand how yield spread premiums (YSP) can affect their closing costs.

The proposed new GFE will be four pages and the new HUD-1 settlement statement will be three pages.  The amended HUD-1 includes a “closing script” that the closing agent will have to read to the borrowers at closing.  The dialogue includes how the GFE and the HUD 1 compare to each other.  It remains to be seen how a 4 page GFE and a 3 page HUD-1 settlement statement will simplify the process for the consumer which is one of the goals of this RESPA rewrite!

HUD believes that the new GFE will encourage consumer price shopping and the increase in competition will lead to large reduction of closing costs.  Clearly, it is the intent and spirit of the federal consumer protection statutes, such as RESPA and TILA, the Truth in Lending Act, to encourage consumers to do price shopping when presented their GFE and APR disclosure for that matter. 

The new RESPA rule sets a standard that the final HUD-1 Settlement Statement, the sum of actual expenses at closing, cannot be more than 10% greater than the Good Faith Estimate given to the borrower within 3 days of their completed mortgage loan application, barring any unforeseen circumstances.  HUD maintains that those mortgage lending entities that would suffer revenue losses under the new rule are those that overcharged uninformed borrowers and benefited from the system’s limitation on competition.

HUD also is proposing that the HUD-1 Settlement Statement of actual costs is provided at least 2 days prior to closing.  This appears to be a requirement rather than the current language in RESPA which says 1 day before closing, “if requested”.  Home Equity legislation in Texas “requires” that it be provided one day before the closing for home equity related loans.

Formal comment surely will include the National Association of Realtors, NAR, the National Association of Mortgage Brokers, NAMB as well as other related settlement service providers.  NAMB is poised to attack any provisions in the RESPA rewrite which discriminate against small businesses and that which doesn’t provide a level playing field among settlement service providers.  Small business drives our economy, providing 80% of our country’s employment.

It is generally known that there is some strong real estate industry opposition to a few of the provisions and that there is not enough time for the new RESPA rewrite to be enacted in 2008. 

More to follow.

Monday, April 28, 2008 - Where in the world is Jerry Rutledge?

Jerry Rutledge, DREI, CREI, President of Alliance Academy, has been a featured speaker all over the country.  He has recently presented his topic, “Mortgage Market, Compliance, and Fraud” for the Mississippi Association of Realtors, the Real Estate Educators Association (REEA), South Central
Educators Group (SCEG), the Dallas Association of Mortgage Brokers (DAMB), and most recently at the Texas Real Estate Teachers Association (TRETA).

Jerry was also a featured speaker at the Texas Real Estate Commission’s (TREC) annual Enforcement Division conference.  He was the only outside speaker invited to participate in the conference.

Mortgage Market, Compliance and Fraud is a hot topic and includes the legislative changes in the industry, which is Jerry's area of expertise.  Jerry has again been requested as the guest speaker to several other state's annual conferences.

Thursday, April 17, 2008 - COOK JOINS LENDER LEAD SOLUTIONS’ REVERSE MORTGAGE TEAM

Senior Lending Network, a reverse mortgage wholesale lender and a division of KBC Bank, recently named David Cook as vice president of sales for the Western Wholesale Division.

Cook’s responsibilities include overseeing customer relationships for the western region of the United States.

Prior to joining Lender Lead Solutions, Cook was regional vice president of Financial Freedom, managing the central region.

Cook has more than 40 years experience in the mortgage industry and began his career as a loan officer in Irving, Texas.

Cook has been active on the committees for the Austin Mortgage Bankers Association and Texas Mortgage Bankers Association. He is also a member of the Texas Association of Realtors and an MCE Instructor approved by the Texas Real Estate Commission.

David can be reached at 512-267-6790 or at dcook@LenderLeadSolutions.com.

David is the author and educator for
our Reverse Mortgage Fundamentals Seminar. 
Please see our course calendar online for scheduling information.

Wednesday, April 16, 2008 - FHA Modernization and Loan Limits

The FHA Modernization Act has now passed both the Senate and House.  Now they are working on merging the two different versions of the bill before it can be put before the President for signature.

It has not been made clear whether or not the Surety Bond program, as was being previously promoted to bring in Mortgage Brokers into the origination business, will pass or what the dollar amount of the bond will be.  The program would allow Brokers to get a Surety Bond in lieu of high net worth requirements and expensive annual HUD audits.

In the meantime, the HUD loan limits have increased through December 31, 2008 to allow more people to borrow via the FHA loan program.

See the attachment for specific TX guidelines.

Monday, March 17, 2008 - Subprime - American Pie Song

Sung to the tune of Don McLean's "American Pie"

Long, long time ago...
I can still remember
How that yield spread made me smile.
And I knew if I had my chance
Those mo-hos I could finance
And I could pay my bills for a while.

But February made me shiver
With every good faith I'd deliver.
Bad news on my e-mail;
I just lost one more deal.

I can't remember if I cried
When I saw the Fremont slide
But something touched me deep inside
The day the Subprime died.

So bye-bye, BC money supply.
Sent my package to four lenders
But they all asked me why.
And good old boys were on a crack induced high
Singin', "This'll be the day the loans die, This'll be the day the loans die."

Did you write some BC loans,
Did you blow bucks on the iPhone?,
Did that nut Cramer tell you so?
Do you believe in rate control,
Can FHA save your borrower's soul,
Why is underwriting today so damn slow?
 
Well, I know you'll have to cut those fees
And you're wondering who has
moved your cheese.
Bernarke's on the news.
You can't afford the MBA dues.
 
I was a semi-rich middle-aged broncin' buck
With a master plan and a lot of pluck,
But I knew I was out of luck
The day the Subprime died.

So bye-bye, BC money supply.
Sent my package to four lenders
But they all asked me why.
And good old boys were on a crack induced high
Singin', "This'll be the day the loans die."

And the three that I admire most, Fannie, Freddie and Indy's ghost....caught the last train for the coast...the Day the Subprime died.

Wednesday, March 5, 2008 - Doug Foster Appointed Commissioner of Texas Savings & Mortgage Lending Department

Pictured Left to Right:  Doug Foster, SMLD Commissioner, Jerry Rutledge, DREI, CREI, President Alliance Academy, Rachel McNamara, Vice President Alliance Academy, Gary Ackright, Texas Finance Commissioner.

We are pleased to announce that Doug Foster has been appointed as the new Commissioner of the Savings and Mortgage Lending Department.

Doug has been with the department for nearly 23 years, most recently as the Director of Examinations.  He has also served twice as the Acting Commissioner when former Commissioners Jim Pledger and Danny Payne resigned.

Commissioner Foster is well respected within the department and the mortgage broker industry for his honesty, integrity and capability.

Commissioner Foster spoke recently at the Dallas Association of Mortgage Brokers (DAMB) monthly meeting.  He presented a Texas Mortgage Market Update as well as providing the latest information about mortgage licensing in Texas.

Mortgage Broker Annual Reports, which were due at the end of March, included over 5600 filings completed.  Yet, 1500 had not filed their annual reports, of which it’s estimated that 750 of those are still active.  The Commissioner suggested, the rest are probably inactive “drop-outs.”  Failure to file an annual report could result in licenses being revoked.

In the Auditing/Compliance division of the Department, they are making changes to allow for an increase in their speed of responses.  Audits and enforcement cases are moving much faster now, which means they are examining more mortgage brokers.

Regarding loan production trends in Texas, the Department has released the following statistics based on Annual Reports.  In 2007, Texas Brokers generated 163,500 loans totaling $25,900,000.  That is down from 2006, when we generated 251,700 loans for a total of $38,460,000.  We hit a peak in 2003 during the refi boom, originating 341,100 loans totaling $49,130,000

Monday, February 11, 2008 - NAMB PRESIDENT GUEST SPEAKER AND STUDENT

Harry Dinham, President of NAMB, the National Association of Mortgage Brokers from 2006-2007, was the Guest Speaker and Student at Alliance Academy, Dallas Campus.

Mr. Dinham, a seasoned Mortgage Broker in Texas, attended the 2 day Compliance Course for the 15 hrs he needed to renew his license. He was the President of TAMB, the Texas Association of Mortgage Brokers from 1999 - 2000, the year the law was written and passed requiring a Residential Mortgage License.

Speaking as President of NAMB, Mr. Dinham reveals his experience this year by sharing with the class a current Mortgage Market update, his testimony before Senate and Regulations in Washington D.C. and his view of changes being proposed.

President Dinham complimented Alliance Academy by saying, “I want to thank you for all that you do to help people better understand our industry. In today’s market it is a very hard job to keep up with all the changes that take place almost daily and your group does a great job.”

At the completion of his 2 day class, Harry turned to me on the way out and said, “Jerry, you’re 100%. I’ve taken all my required 15 hrs of CE from you.”

Thank you, NAMB President Harry Dinham, for your outstanding contribution of time, talent, experience, and personal sacrifice for the benefit of the Mortgage Professionals nation wide.

Friday, June 23, 2006 - Do you need a second lien license???

AS RATES ON SECOND LIENS INCH UPWARD....ASK YOURSELF

Do I need to be licensed to originate second liens?

·         Mortgage Brokers: Yes, if you broker junior lien transactions with effective rates greater than 10%. (The Texas Savings and Mortgage Lending Department licenses brokers of first lien transactions)

·         Mortgage Lenders: Yes, if you make home equity loans (unless made with unsupervised HUD-approved lenders) or engage in junior lien transactions.

·         Mortgage Servicers: Yes, if you are servicing secondary mortgages or first lien home equity loans.

·         Second Mortgage Lenders: Yes.

Click here to get information on a regulated loan license from the OCCC.