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.July 2007
Colorado
HB 07-1322 (effective June 1, 2007)(70 KB)
Mortgage brokers must: (1) provide borrowers with certain disclosures
regarding lock-in agreements and loan fees and costs; (2) are prohibited from
engaging in a number of practices relating to fraud and misrepresentation; and
(3) restricted from collecting compensation, under certain circumstances, when a
loan is not closed. Additionally, requirements are imposed on mortgage brokers
who act as real estate brokers or salespersons in the same loan transaction.
Division of Real Estate Position Statement (July 3, 2007) (88 KB)
The Division of Real Estate issued a position statement that clarifies the
new Mortgage Broker Registration Act amendments, which were effective June 1,
2007. Specifically, mortgage brokers must make a reasonable inquiry concerning
the borrower’s current and prospective income, existing debts and other
obligations, and any other information known to the mortgage broker and, after
making such inquiry, recommend, broker, or originate, to make his or her best
efforts, a residential mortgage loan that takes into consideration the
information submitted by the borrower.
Indiana
Senate Bill 434 (effective July 1, 2007) (506 KB)
Anyone who holds a Certificate of Title or Origin or owns a manufactured
home as an improvement may apply for an Affidavit of Transfer to Real Property
(such affidavit is unnecessary if their manufactured home is an improvement
attached to the real estate by a foundation). The affidavit must include an
attestation by the owner of the manufactured home that the home has been
permanently affixed, a description of the manufactured home, a parcel number,
and one or more of the following: a manufacturer issued serial number, a HUD
certification label number or a special ID number issued by the State. A
Certificate of Title or Origin is not required in order to submit an affidavit
of transfer.
Oklahoma
Regulation OAC 160:55-7-1: Records and changes (effective 7/12/2007) (7 KB)
Mortgage Broker Licensure Act licensees must maintain a transaction
journal, which discloses the borrower’s name, date of the loan, loan account
number, and lender’s name and address. Additionally, the previously adopted
emergency regulation pertaining to loan originator continuing education
requirements was permanently adopted without change.
Rhode Island
Senate Bill 104 (various effective dates) (48 KB)
A bill establishing licensing and registration requirements for mortgage
loan originators. Definitions of the bill are effective March 31, 2007. Loan
originators must register with the Department of Business Regulation by March
31, 2008; however, registrations are only effective until January 1, 2009 at
which time loan originators must obtain licenses. The bill also sets forth
initial and continuing education requirements applicable to loan originators and
increases the required bond amounts for mortgage lenders and loan brokers. The
increased bond amounts became effective immediately.
Senate Bill 369 (various effective dates) (22 KB)
A bill amending the initial and renewal application procedures applicable
to mortgage lenders, loan brokers and mortgage loan originators. Definitions of
the bill are effective March 31, 2007. The bill requires license applicants to
submit additional information on an application, changes the license renewal
date, and permits the Department of Business Regulation to conduct criminal
history background checks. Additionally, the bill authorizes the Department to
participate in the Conference of State Bank Supervisors and the American
Association of Residential Mortgage Regulators automated national licensing
system. The bill becomes effective December 31, 2008.
Guidance on Nontraditional Mortgage Products
Colorado: (effective July 1, 2007)
Colorado recently adopted guidelines for nontraditional mortgage products, based on the federal interagency guidance issued in September of 2006.As previously addressed in our December 29, 2006 Legislative Update, the federal Interagency Guidance on Nontraditional Mortgage Products clarifies how institutions can offer nontraditional mortgage products in a safe and sound manner that clearly discloses the risks a borrower may assume, by addressing three primary areas: loans terms and underwriting standards; portfolio and risk management practices and consumer protection issues.
To date, thirty-six states and the District of Columbia have adopted a variation of the federal guidance: AZ, CO, CT, DE, GA, HI, ID, IN, IA, KY, LA, MA, MI, MN, MS, MO, MT, NE, NH, NJ, NY, NC, ND, OH, OR, PA, RI, SD, TN, TX, UT, VT, VA, WA, WI, WY.
Fannie Mae
Announcement 07-07 dated June 29, 2007 (101 KB)
Fannie Mae clarifies that loans secured by units in certain condominium, cooperative, and PUD projects are ineligible for sale to Fannie Mae. This Announcement is effective immediately and supersedes Announcement 06-12 in its entirety. The Announcement provides guidance to lenders when determining if a project is a condominium or cooperative hotel or motel, adds three new project types to the Ineligible Projects List, and reaffirms the lender’s representation and warranty requirements for project reviews.The changes in this Announcement amend Part XII, Project Standards, Chapter 1, General Project Eligibility, Section 102, Ineligible Projects, of the Fannie Mae Selling Guide.