Compliance News
In First American's Compliance News Archive you will find easy access to our library of GSE announcements, court findings, legislative changes, specific changes to state requirements, governmental guidance on issues that directly affect the mortgage document industry and more.February 2008
California: Department of Real Estate (Effective January 14, 2008)
The California Department of Real Estate Commissioner (the "Commissioner")
revised three Department of Real Estate Forms, the Mortgage Loan Disclosure
Statement (form RE 882), the Mortgage Loan Disclosure Statement/Good Faith
Estimate (form RE883) and the Mortgage Loan Disclosure Statement/Good Faith
Estimate Nontraditional Mortgage Product (One to Four Residential Units) (form
RE 885) for aiding real estate licensees in providing disclosures to borrowers.
Real Estate Brokers must obtain prior written approval if he/she wishes to use
different forms than the ones provided by the Commissioner.
LPS is in the process of revising these disclosures and will have them available to its clients as of February 29, 2008.
LPS is in the process of revising these disclosures and will have them available to its clients as of February 29, 2008.
Colorado: Department of Regulatory Agencies, Division of Real Estate (Effective January 25, 2008)
The Colorado Division of Real Estate (the "Division") adopted an emergency rule
to clarify two disclosures regarding mortgage loan transactions. The Division
addressed the Colorado Mortgage Broker Compensation Disclosure Form and the
Colorado Lock-in Disclosure Form to ensure borrowers obtain information that is
clearly and concisely disclosed. The model Mortgage Broker Compensation
Disclosure Form remains unchanged, but the model Colorado Lock-in Disclosure
Form was revised.
District of Columbia: Mortgage Disclosure Amendment Act of 2007 (Effective January 29, 2008)
The Mortgage Disclosure Amendment Act of 2007 requires mortgage lenders to
provide written disclosures to borrowers in connection with "non-conventional
mortgage loans." A non-conventional mortgage loan is defined as "any mortgage
loan that is not a fixed-rate mortgage loan with an amortization period of 30
years or less." A mortgage lender must provide a borrower with a Mortgage
Disclosure Form within 3 business days of an application for a non-conventional
mortgage loan.
LPS is in the process of creating the promulgated Mortgage Disclosure Form and will have it available to its clients as of February 20, 2008.
LPS is in the process of creating the promulgated Mortgage Disclosure Form and will have it available to its clients as of February 20, 2008.
Maine:
Department of Professional and Financial Regulation Joint Advisory Ruling #111 (December 17, 2007)
The Maine Bureau of Financial Institutions and Bureau of Consumer Credit
Protection released a Joint Advisory Ruling that clarified a home equity line
of credit ("HELOC") should be excluded from the definition of subprime mortgage
loan, except to the extent a HELOC is a Simultaneous Second-Lien Loan as
defined in the Interagency Guidance on Nontraditional Mortgage Product Risks,
or meets the criteria for a high-rate, high-fee mortgage.
Department of Professional and Financial Regulation Joint Advisory Ruling #113 (December 26, 2007)
The Maine Bureau of Financial Institutions and Bureau of Consumer Credit
Protection released a Joint Advisory Ruling that concluded the "ability to pay"
section of the Guidelines for Determining Reasonable, Tangible Net Benefit and
Ability to Pay rules requires a creditor to consider both secured and unsecured
debt payments in calculating ability to pay, but permits the creditor to rely
on reported monthly payments to other creditors and not require creditors to
attempt to fully index payments that may be due to other creditors in the
future.
Department of Professional and Financial Regulation Joint Advisory Ruling #114 (January 17, 2008)
The Maine Bureau of Financial Institutions and Bureau of Consumer Credit
Protection released a Joint Advisory Ruling that established a revised Maine's
Reasonable, Tangible Net Benefit Disclosure Form. The revised form addresses
recent amendments regarding "flipping," which now only prohibits flipping on
subprime mortgage loans. Accordingly, lenders may make prime mortgage loans
without undertaking a "tangible net benefit" analysis.
LPS is in the process of creating the revised disclosure and will have it available to its clients shortly.
LPS is in the process of creating the revised disclosure and will have it available to its clients shortly.
New York: Mortgage Banking Regulations (Effective December 18, 2007)
Any person employed by or affiliated with a person or entity licensed or
registered pursuant to Article 12-D of New York Banking Law, who solicits,
negotiates, explains or finalizes the terms of a mortgage loan must register as
a Mortgage Loan Originator with the New York State Banking Department.
Federal Housing Administration Mortgagee Letter 2008-02: 2008 FHA Maximum Mortgage Limits (January 18, 2008)
Updates to the Federal Housing Administration's (FHA) single family mortgage
limits were published and the mortgage limits are effective for loans endorsed
for insurance on or after January 1, 2008.
Statement on Subprime Mortgage Lending
As previously discussed in our July 11, 2007 Legislative Update, the final
interagency Statement on Subprime Mortgage Lending ("Statement") clarifies how
financial institutions can offer certain adjustable rate mortgage products in a
safe and sound manner and in a way that clearly discloses the risks a borrower
may assume.
To date, the following states have adopted the Statement, with the bold portions indicating the states that recently adopted the Statement.
Alabama, Arizona, Arkansas, California, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Massachusetts, Michigan, Mississippi, Missouri, Nebraska, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Tennessee, Texas, Vermont, Washington, West Virginia, Wisconsin, and Wyoming
To date, the following states have adopted the Statement, with the bold portions indicating the states that recently adopted the Statement.
Alabama, Arizona, Arkansas, California, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Massachusetts, Michigan, Mississippi, Missouri, Nebraska, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Tennessee, Texas, Vermont, Washington, West Virginia, Wisconsin, and Wyoming
Investor Relations
Aurora Loan Servicing
Lehman Brothers, Aurora's parent company has announced that Aurora will no longer accept loans originated though their Correspondent and Wholesale channel. Aurora will maintain their Servicing Business and the origination of direct lending Loans.
Lehman Brothers, Aurora's parent company has announced that Aurora will no longer accept loans originated though their Correspondent and Wholesale channel. Aurora will maintain their Servicing Business and the origination of direct lending Loans.