NRMLA s 2012 Annual Meeting & Expo. Stacey Rayburn Compliance Officer Generation Mortgage Company

Transcription

1 NRMLA s 2012 Annual Meeting & Expo Stacey Rayburn Compliance Officer Generation Mortgage Company

2 Third-Party Originator Marketing and Compliance Third-Party Originator (TPO) Oversight Risk Management & Consumer Protection What a Wholesale Lender May Require Reviews of Broker/Correspondent Advertisements Examples of Verbiage Used in Recent Marketing Materials Provided by TPOs

3 Why TPO Oversight? FHA s elimination of correspondent/broker approvals. Full responsibility now rests with sponsoring Lenders. Mortgagee Letter FHA-approved DE lenders that sponsor third-party originators (TPOs) are responsible for ensuring each TPO they sponsor adheres to FHA s requirements when originating loans for that lender. HUD expects sponsoring mortgagees to diligently monitor and evaluate the activities and performance of all TPOs they sponsor, including FHA-approved mortgagees acting as sponsored TPOs. Failure of a sponsored TPO to comply with FHA requirements may result in FHA taking administrative action against both the sponsored TPO and the sponsoring mortgagee.

4 Risk Management and Consumer Protection: Our Goal - Avoid making statements, providing advertisements or marketing materials which Are not clear and balanced Could be misleading or deceptive

5 Risk Management and Consumer Protection (Continued) Clear and Balanced Information: Several Agencies - OCC, FRB, FDIC, OTS and NCUA provided guidance Federal Register / Vol. 75, No. 158 Tuesday, August 17, 2010 effective October 18, 2010 Lenders should Manage compliance and reputation risk Avoid conflicts of interests Improve communications with Consumers by providing information that is balanced Benefits, Risks, and Costs Not just the benefits of a reverse mortgage

6 Risk Management and Consumer Protection (Continued) Deceptive or Misleading: The TILA, Dodd Frank Act, several state agencies, and NRMLA Ethic Advisory prohibit deceptive and misleading advertisements. Unfair Deceptive, or Abusive Acts or Practices (UDAAP) CFPB Supervision and Examination Manual October 2011

7 Risk Management and Consumer Protection (Continued) A representation, omission, act or practice is deceptive when 1) The representation, omission, act or practice misleads or is likely to mislead the consumer, 2) The consumer s interpretation of the representation, omission, act, or practice is reasonable under the circumstances, and 3) The misleading representation, omission, act, or practice is material

8 Risk Management and Consumer Protection (Continued) whether an act or practice is deceptive depends on how a reasonable member of the target audience would interpret the representation. When representations or marketing practices target a specific audience, such as older Americans, young people, or financially distressed consumers, the communication must be reviewed from the point of view of a reasonable member of that group.

9 Risk Management and Consumer Protection (Continued) Example of balanced information, provided in the Federal Register Vol.75, No. 158/Tuesday, /Notices: We offer reverse mortgages to borrowers who are 62 or older. Call us for more information. This is clear and balanced because it does not make any representations about the benefits or risks of the product, and is not deceptive or misleading.

10 Risk Management and Consumer Protection (Continued) Example of misleading and unbalanced information: The borrowers continue to live in the home as long as they like.

11 Risk Management and Consumer Protection (Continued) Example rewritten for balance: The borrowers continue to live in their home as long as they: Occupy the home as their primary residence Maintain the home in good condition Make direct payments of required property taxes and insurance on time

12 What A Wholesale Lender May Require: During the Broker Approval Process Sampling of recent advertising and marketing materials for past 6 months to 1 year Website information DBA s During Recertification or Annual Renewal Current advertising and marketing materials Website information and new websites DBA s

13 Lenders will check for: Company name as registered with state agencies and HUD NMLS Identifiers for the company and loan originator State specific requirements License # s when required by the state Address of licensed/registered branch Branch phone number Required verbiage Individual Loan Originator

14 Lenders will check for (Continued) Deceptive or misleading statements Information is balanced, when applicable Rates and terms, if applicable, are disclosed properly as per TILA

15 Example - State Specific Verbiage: NMLS #1319; Corporate Office: 3565 Piedmont Rd, NE, 3 Piedmont Center, Ste 300, Atlanta, GA 30305; Arizona Mortgage Banker License # , 6740 E. Camelback Rd, Ste 104, Scottsdale, AZ 85251; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act; Colorado, To check the license status of your mortgage loan originator, visit In CT, licensed and DBA as Generation Reverse Mortgage, Inc.; Georgia Residential Mortgage Licensee #22292, Generation Mortgage Company, 3565 Piedmont Rd, NE, 3 Piedmont Ctr, Ste 300, Atlanta, GA 30305; Illinois Residential Mortgage Licensee #MB ; Kansas Licensed Mortgage Company #MC ; Massachusetts Mortgage Lender-ML3240; Licensed by the Mississippi Department of Banking & Consumer Finance; Nevada #2970, 907 Tahoe Blvd, Ste 2, Incline Village, NV 89451, Phone # ; Licensed by the New Hampshire Banking Department as Generation Mortgage Company d/b/a Generation Mortgage Company, Inc.; Licensed by the N.J. Department of Banking and Insurance, 51 JFK Parkway, Ste 114, First Floor West, Short Hills, NJ 07078, Phone # ; Licensed Mortgage Banker- NYS Department of Financial Services; Oregon License #ML-4445, Licensed by the Pennsylvania Department of Banking; Rhode Island Licensed Lender; TEXAS: COMPLAINTS REGARDING A LICENSED RESIDENTIAL MORTGAGE LOAN ORIGINATOR SHOULD BE SENT TO THE TEXAS DEPARTMENT OF SAVINGS AND MORTGAGE LENDING, 2601 NORTH LAMAR, SUITE 201, AUSTIN, TEXAS A TOLL-FREE CONSUMER HOTLINE IS AVAILABLE AT Licensed by the Virginia State Corporation Commission #MC-4832; Washington #CL-1319; Also conducts business in AL, AR, DC, DE, FL, HI, IA, ID, IN, KY, LA, MD, ME, MI, MN, MT, NC, ND, NE, NM, OH, OK, SC, SD, TN (License #3543), UT, VT, WI, WV, WY. Not all products and options are available in all states. Terms subject to change without notice. Some people portrayed are professional models Generation Mortgage Company. All Rights Reserved.

16 Example - State Specific Verbiage (Continued) Licensed by the Department of Corporations under the California Residential Mortgage Lending Act; Georgia Residential Mortgage Licensee #22292, Generation Mortgage Company, 3565 Piedmont Rd, NE, 3 Piedmont Ctr, Ste 300, Atlanta, GA 30305; Licensed by the Mississippi Department of Banking & Consumer Finance; TEXAS: COMPLAINTS REGARDING A LICENSED RESIDENTIAL MORTGAGE LOAN ORIGINATOR SHOULD BE SENT TO THE TEXAS DEPARTMENT OF SAVINGS AND MORTGAGE LENDING, 2601 NORTH LAMAR, SUITE 201, AUSTIN, TEXAS A TOLL-FREE CONSUMER HOTLINE IS AVAILABLE AT

17 Examples of recent TPO advertising concerns: Missing NMLS# and License # as required by some states S.A.F.E. ACT and State Agencies Address not a licensed branch State Agencies Fannie Mae Home Keeper Program Fannie Mae

18 Examples (continued) Pay for estate planning. FHA and NRMLA Code of Ethics Pay for long term care insurance. FHA and NRMLA Code of Ethics without ever having a monthly mortgage payment for as long as you reside in your home. Instead of you making payments to the bank, the bank makes payments to you.

19 Examples (continued) Use of FHA Approved Lending Institution Logo when the broker is not FHA approved. Federal Housing Commission Approved Lending Institution - Dept. of Housing & Urban Development Federally licensed by HUD. only available through federally licensed lenders. Mortgagee Letter

20 Thank you for attending For more information, I can be reached at: stacey.rayburn@generationmortgage.com