Note: PowerPoint and audio for the July 16, 2015, Legislative Update webinar should now be available on our website.

Transcription

1 Note: PowerPoint and audio for the July 16, 2015, Legislative Update webinar should now be available on our website. For Escrow Officer Credit please one time only to for certificates, include: The Password given at the end of the webinar Attendees names TDI License number Webinar Title For this webinar, please include CFPB Implementation in the subject line of your . Attorneys: bar card number to the same for CLE credit. Send to your training administrator if applicable. 1

2 ADDITIONAL HOUSEKEEPING INFORMATION Because of opinions expressed by the Texas Insurance Department concerning rebates, legal credit is available only to: Attorneys who own title agencies that are Stewart Title Guaranty Agents Attorneys employed by a title insurance agent licensed with Stewart Title Guaranty or Stewart entities Fee attorneys who have an Escrow Officer license through a Stewart Title Agent or Stewart entity If you are claiming legal credit for this web conference, please provide in your which category you are in. 2

3 We welcome any other lawyers to listen, but cannot provide continuing education credit to you. We regret any inconvenience but we must take reasonable steps to protect us and you from enforcement actions by the Texas Department of Insurance. 3

4 CFPB Implementation Consumer Financial Protection Bureau By: Dawn M. Lewallen, Compliance Counsel & Senior Underwriter August 20, 2015

5 Today s Topics 1. CFPB Call Center 2. Resources on StewartPoint 3. Marketing Materials 4. Simultaneous Rate in Texas 5. Post Closing and Quality Control 6. Ask the Lender and Issues at Closing 7. Enforcement Actions 8. Questions & Answers

6 1. October 3 rd?

7 TRID Rule After October 3, 2015! CFPB Call Center & CFPB State Counsel Team

8 CFPB State Counsel Team South West John Rothermel RUC Region Group Leader Heidi Junge Arkansas Craig Gill Louisiana Malcolm Meyer New Mexico Orlando Lucero Oklahoma Barry Schmulbach Texas Heidi Junge

9 2. Resources stewart.com/cfpb Service Provider Bulletin ALTA Best Practices Integrated Disclosures Loan Estimates Closing Disclosures FAQ s Guide to forms REALTOR info Lender info Homebuyer education

10 3. Marketing Material Establish yourself as the CFPB expert. Show customers you re a trusted provider of real estate services Verifies your agency undergoes rigorous vetting process Validates high quality standards you meet Shows you re the best in the business Use the Trusted Provider seal in your marketing efforts

11 CFPB/ Trusted Provider Download the new TILA-RESPA Integrated Disclosure Rule video on youtube.com/user/stewarttitleco Download the CFPB Toolkit on stewartmarketing.com Establish yourself as CFPB expert Invite your REALTOR customers to learn about CFPB: Speaker s checklist Invitation flyer and Presentation with speaker notes Phone script CFPB rule handout

12 3. Simultaneous Rate 12

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15 4. Post Closing Quality Control Documents presented for recording. Recorder says this Exhibit A is three pages instead of one page. You are $50 short as your office only collected $75. You kick in the $50. Today, eat it and move on! Post October 3 rd, settlement agent must issue a revised CD (5 pages) to the borrower. In recording fees section, you show what you took from the borrower for recording fees and in the Paid by Others column you put the $50 you kicked in. If we owe seller money or borrower is entitled to a revised disclosure, then we may need to make this right!

16 What is changing in process that can create post closing issues? No longer in a world where you send the check, remit the policy, and close the file after you have scanned the policy and shredded the file. Lender is driving the process. They are responsible. These are forms under Truth in Lending, not RESPA. In new world, settlement agent will not be able to close the file until they have provided the lender with all recorded documents and all recorded cancellations of mortgages (whether from the lender of record, the title agent, the closing attorney, etc).

17 Banks and Quality Service Providers If you want to close with Bank A, you need quality control processes and procedures over your closing file. Pain Points - Investors are interested! Get your documents recorded quickly. Monitor rejects! Get your policies out quickly! Any issue with Closing Disclosure (re-disclosed)! Post Closing Fee Review and Comparison! Get your cancellations of mortgage recorded!

18 6. Enforcement Actions and Examinations: Meet Our New Regulator

19 Recent Enforcement Actions Banking Products Credit Card Add-on Products Auto Lending Credit Card Advertising Credit Reporting and Monitoring Debt Collection General Consumer Credit Mortgage Advertising Mortgage Servicing Payday Loans Student Loans

20 Same Rules New Regulator Unfair, Deceptive or Abusive Acts or Practices (UDAAP) Equal Credit Opportunity Act (ECOA) Electronic Fund Transfer Act (EFTA) Truth in Savings Act (TISA) Privacy of Consumer Financial Information (GLBA) Truth in Lending Act (TILA) Home Ownership & Equity Protection Act (HOEPA) Fair Credit Billing Act (FCBA) Real Estate Settlement Procedures Act (RESPA) Equal Credit Opportunity Act (ECOA) Interagency Fair Lending Examination Procedures Fair Credit Reporting Act (FCRA) Privacy/Gramm-Leach-Bliley Act Home Mortgage Disclosure Act (HMDA) SAFE Mortgage Licensing Act (SAFE) Consumer Leasing Act (CLA) Homeowners Protection Act (HOPA) Fair Debt Collection Practices Act (FDCPA)

21 CFPB Examination Dodd-Frank Act gives the CFPB examination authority over: Banks and Nonbanks, and Their service providers. to the same extent as if such service provider were engaged in a service relationship with a bank. 12 U.S.C. 5514(a)(1) and (e). No notice, no Civil Investigative Demand (CID), no subpoena necessary!

22 CFPB Examination 12 U.S.C. 5514(b)(1) and 5515(b)(1). Assessing compliance with the requirements of Federal consumer financial law; Obtaining information about the activities and compliance systems or procedures of such person; and Detecting and assessing risks to consumers and to markets for consumer financial products and services.

23 Ways CFPB Impact You! The Scary Stuff

24 Ways CFPB Impact You! Focus on Fees Small, but excessive fees. Misrepresenting cost and fees for coverage Misrepresenting benefits of some products Misrepresenting or omitting information about eligibility for coverage Charged consumers for benefits they did not receive Failed to provide product benefits

25 Ways CFPB Impact You!

26 If the CFPB Finds Problems, Very Broad Remedies: Rescission or reformation of contracts Refund of moneys Return of real property Restitution Disgorgement of profits Compensation for unjust enrichment Damages Public notification of violations (with costs to be borne by the violator) Limits on activities or functions, including suspension & termination Civil money penalties Up to $5,000/day (any violation) Up to $25,000/day (reckless) Up to $1 million/day (knowing)

27 Reputation and Class Action

28 Question: 7. Questions & Answers If the borrower changes their mind about the type of loan they want, how will I know what loan product types will require re-disclosure and a new three day waiting period? A. The Consumer asked for the change so you can proceed to close on current disclosures. B. You try and talk the borrower out of the new loan product. C. Contact the lender immediately. A change in the loan product may require a revised CD and a new three-day waiting period. D. You call the realtor and ask them to deal with the borrower.

29 Questions & Answers What should we do if Lender's closing documents have been received and the customer asks to sign a day early?

30 Answer: Ask the lender. Since many lenders will use the date the note is signed for all transactions as the date of consummation and the date of consummation triggers the three business day rule for delivery of the CD and timing of the closing, always consult with your Lender s closing contact before permitting the parties to sign early. DO NOT Permit the borrower to sign the loan documents without the express written permission of the lender! Permitting an early signing that the Lender has not authorized could jeopardize Lender's compliance with the Rule, which is not acceptable at any time.

31 Question & Answer I add a cushion for settlement fees and closing costs on the HUD-1 today because some items can vary between the signing and when the transaction is settled after recording (i.e.: recording fees, pro-rations, prepaid interest). The overage is then refunded after the final disbursements are made. Can I continue to do this after October 3 st?

32 Question & Answer A good realtor client has expressed concerns that realtors will come to the closing and want to make some last minute changes. We wanted to send closing information to the realtors as soon as we received the information, so that the realtor can review and have input early enough to make changes without delaying the deal.

33 Disclosures to Realtors First, agents are going to see lenders instructions that say this: settlement agents may not make any changes to the CD without lender s knowledge. If settlement agent adds or changes a fee after the Lender has delivered the CD to the Borrower, Settlement agent will immediately notify the lender and not proceed with the Signing until further notice from the lender. Upon receipt of the fee changes, Lender will provide an updated CD, and if additional review time is required, Settlement agent will schedule a new Signing Date. DO NOT Change any fee on the Closing Disclosure without first contacting the Lender and obtaining express written permission! ANSWER: ASK THE LENDER is the answer to any question about changes- any changes. So, if a realtor requests a change, the settlement agent needs to contact the lender immediately and wait for instructions from the lender and perhaps an updated CD.

34 Can you save the day? Seller needs to close today to move across the country for the start of a new job in two days! Can I close on the CD even though I know it contains inaccurate fees and costs? Can I mark through the inaccurate fees and proceed to close?

35 DO NOT Close with a Closing Disclosure that contains inaccurate fees and costs. The Rule requires a revised CD at closing.

36 Realtor comes to closing and needs to add fee DO NOT Change any fee on the Closing Disclosure without first contacting the Lender and obtaining express written permission!

37 Closer receives closing package from lender day before d/t or mortgage has addendums causing recording fee to increase. You are $25 short as your office only collected $50. You kick in the $25.00 and close the file. There is no need to issue a revised CD since your office kicked in the additional recording fee. TRUE OR FALSE?

38 Borrower elects to pay more as down payment (or more equity if refinance) so as to not pay PMI or get lower interest rate docs need to be redrawn, amounts change A. Lender will be concerned that the consumer may see different charges so you go ahead and close on current disclosures without telling the parties or the lender. B. You must contact the lender immediately and await written instructions before you proceed to closing. The rule permits revised LE in limited changed circumstances. Information provided in the application is inaccurate or has changed since the application is an example of such a changed circumstance. Lender will be concerned that the consumer may see different charges. Lender may instruct settlement agent of the need to start the process over. C. You know a changed circumstances when you see it plus the rule allows for borrower requested changes so you proceed to close. D. You start looking for other career options.

39 Borrower decides to purchase Home Warranty Policy. You notify the lender s closing contact of this change immediately. Lender will determine if an updated CD can be provided for delivery at the closing or if the change triggers the three-day receipt requirement to be restarted. TRUE OR FALSE?

40 You be the Judge Realtor for Seller has called you in a panic! Seller is facing imminent foreclosure and needs the sale to buyer to close tomorrow. What do you do? A. This is a bona fide financial emergency. You know TRID provides for this so you go ahead and close the transaction to help the realtor and their seller out. No need to tell the lender because this is an emergency! B. You contact the lender and receive a verbal okay to close without instructions. Lender will follow up with the waiver and instructions after the closing. C. Contact the lender and await instructions and evidence of waiver before you proceed. D. None of the above.

41 DO NOT Waive the 3-business day period unless the Lender specifically advises you of a bona fide emergency waiver in writing! DO NOT Accept or determine what constitutes a bona fide personal financial emergency without the express written permission of the Lender!

42 You Be the Judge Exhibit A turns out to be one page instead of two. You have collected to much for recording fees. What do you do? A. You cut the refund check, put a cover letter on it, and put it in the mail with a Forever stamp. B. You don t worry about it and move the refund into your operating account. No one will miss a few dollars. C. You cut the refund check, put a cover letter on it, revised the Closing Disclosure and put it in the mail with a Forever stamp within 30 days of learning of the issue. D. You cut a check to the lender and let them deal with it in violation of your closing instructions.

43 You Be the Judge The consumer has called your office and has decided to go with a fixed rate mortgage? Title Agent does not want to tell the lender because it will upset a local realtor. You decide to close anyway just like you do today based on the current Loan Estimate and Closing Disclosure and changing the loan product. If you don t tell the lender, it will not be a lender violation. TRUE OR FALSE?

44 We ll just fix it like we do today! Remember, violations of TRID could not only jeopardize the Lender s compliance under the rule which is not acceptable at any time. Such violations carry up to $1 million dollars per day per violation for you, individually, and for your agency.

45 The End!

46 Here s how to get CE credit! your certificate request to: CEcertificate@stewart.com Please include following information in your request: Name of Participant This Presentation Name CFPB Implementation Presentation PASSWORD given at the end of the webinar TDI Number (one only) For Attorney CLE Credit also include: Texas State Bar Number How Affiliated with Stewart Note: CLE credit for attorneys is limited to Texas license and employment by a Stewart Title Guaranty Company title insurance agent or a Stewart entity.

47 If you haven t received your certificate within 2 weeks please contact: CEcertificate@stewart.com You can access the full webinar materials 10 business days after the webinar at: under the Texas TIPS tab 47

48 A special webinar has been scheduled for: August 25, 2015 Estates Codes and Related Matters 9:30 a.m. 10:30 a.m. CST presented by: Heidi Junge This course has been approved for 1 hour of CE Credit from the TDI and 1 hour of CLE Credit from the State Bar. 48

49 Next Month s Texas TIPS Online presentation is September 17, 2015 Documentation Retention Rules, Courthouse Access, Title Companies as Trustees, etc. presented by: John Rothermel and Heidi Junge For Questions/Comments john.rothermel@stewart.com or heidi.junge@stewart.com 49