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Mortgage Rules & Regulations

We will periodically share some of the recent rule & regulation updates with you, in the form of marketing downloads or online classes.  However, for complete coverage, please considering taking out a subscription to our sister-website, MortgageCurrentcy.com. [Diva Members receive a 25% discount off an annual subscription - Subscribe Now!]

Written By: Tracey Rumsey, Staff Writer, MortgageCurrentcy.com. [Diva members receive a $100 discount off their 1st year's ANNUAL subscription to Mortgage Currentcy! Email This email address is being protected from spambots. You need JavaScript enabled to view it. , for the promo code! Valid on new subscriptions only.]


Big Changes were announced at the VA Lender Conference this year that relate to changes in the credit underwriting. If you do VA business this is a MUST read for your business!

Rule Synopsis:

The Veterans Administration (VA) held their 2018 lenders conference in April this year, and this year’s conference offered a bit more excitement than previous years. MortgageCurrentcy.com doesn’t typically report on any agency policies until they are officially released in writing through Circulars, Mortgagee Letters, Selling Guide Bulletins, etc., but we’re making an exception in this case. This year’s conference had VA personnel announcing a number of changes, additions and clarifications to Chapter 4 (Credit Underwriting) of the Lender’s Handbook (Pamphlet 26-7) that are to be published in June 2018 (a more specific date was not provided). VA stated that all of the announced changes could be utilized immediately.

Interpretive Comments:

Quick backstory: Unfortunately, VA does not update their Lender’s Handbook very often. According to their ‘Changes’ documentation on the Lender’s Handbook page, the last update took place in 2012. This requires both originators and underwriters to constantly refer to the Lender’s Handbook while subsequently checking all the VA Circulars for the last 6 years to be sure they aren’t missing a policy change in there somewhere. In VA’s defense, they rarely make significant underwriting policy changes.

Written By: Tammy Butler, Master CMB, Publisher of MortgageCurrentcy.com.

[Reminder - Diva Members can receive a $100 discount of the 1st year of a NEW, annual subscription. Email This email address is being protected from spambots. You need JavaScript enabled to view it. for the promo code!]


If more loan officers worked to position themselves as mortgage experts on social media, I probably wouldn’t receive so many messages like this: “Hey Tammy, you’re in the mortgage industry. Do you know anyone we should go to? We’re thinking about buying a home.”

I’m glad I can help my friends connect with responsible lenders, but it also makes me wonder why someone in their network wasn’t already considered a suitable candidate. After all, many of these prospective homebuyers have many more connections than I do, yet no one else has earned their eyes or their business as a mortgage expert.

Mortgage originators have an average age of “over 50,” and this may be part of the issue – we simply didn’t grow up in a world with social media, so positioning ourselves as mortgage experts doesn’t come naturally.

Written By: Tammy Butler, FairLendingDiversity.com


If you have anything to do with Fair Lending in your company, you have no doubt heard the news about the recent change at the CFPB with regard to Mulvaney’s decision to strip the Fair Lending Office of enforcement duties and move those duties to the Supervision and Enforcement Division. I have received numerous phone calls and emails about this change, so I am sharing those collective thoughts with you.

As someone who has worked in both the consumer advocate world, the mortgage industry for over 30 years and was born and raised in the land of politics, Maryland, I generally feel pretty tuned in to all sides of this equation. So here is my prognostication on the future of Fair Lending enforcement.

Background

The Office of Fair Lending was stripped of its enforcement powers, and this enforcement power moved to another division which is “Supervision and Enforcement,” now called “Supervision and Enforcement & Fair Lending. Mulvaney’s theory is that now all enforcement action is under one division versus separate enforcement action that was previously allowed just for the Fair Lending division.

The bureau has been known for showing lenders what they need to do via enforcement action versus just laying it out to lenders. In my opinion, this has always been the wrong approach. If you tell lenders what you want from them in clear terms, they will deliver. If they do not deliver than that is on them, and they deserve the penalty for not playing by the rules. Pretty simple! After all, compliant lenders would love nothing more than to get rid of the “bad players” in the lending industry.

Written By:Tammy Butler, Publisher, MortgageCurrentcy.com. DIVA MEMBERS - contact This email address is being protected from spambots. You need JavaScript enabled to view it. to obtain a special link to subscribe at $100 off current annual rate! Pay only $297 for a full year versus $397.


I’ve heard many originators say that they are not concerned if they get mystery shopped because they treat everyone the same. However, even the most experienced originators and underwriters sometimes miss the nuances that can unknowingly cause them grief. Knowledge is Power, and it can not only save you some deals but also save your license.

As many of you know, making lending decisions based on Marital Status is prohibited under ECOA. When most mortgage professionals hear that, they immediately believe that they would never do that! After all, if you can do the loan, let’s do it. The issue may be that you don’t understand the guidelines completely or apply them incorrectly because they change frequently. As a result, another lender may do the loan, costing you not only a loan but a referral source. And to top it all off, you may have an ECOA violation on your hands if the borrower complains.

Loan originators and processors need to thoroughly understand what is and is not acceptable to underwriting based on the current guidelines, and give the right advice to those applying for a loan. This prevents a client from being “discouraged” from applying based on a misunderstanding about agency requirements. This is one of the reasons we put out so many charts and checklists to keep you updated!

Written By: Lloyd Rutherford, Staff Writer, MortgageCurrentcy.com

Fannie and Freddie have released updates to their automated valuation requirements.

However, there are distinctions between the two that you should be aware of so that you use the correct system for the borrower.

Here’s a short synopsis, comparing the differences.

Take the time to read through this article so you can remove the appraisal cost to your client and the rep and warranty issue from your lender.

Resource: (Fannie Mae-DU Version 10.1 Release Notes – Updates PIW for Purchase Loans – Dated August 18, 2017-Effective August 19, 2017. Freddie Mac Bulletin 2017-13 – effective 9-1-17)


If you would like to obtain more charts and checklists like this, visit www.MortgageCurrentcy.com for subscription pricing and what's included with a subscription.

Reminder to DIVA MEMBERS - you can receive a $100 discount off the annual subscription rate. Email This email address is being protected from spambots. You need JavaScript enabled to view it. for the discount link!


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