Loan Originator Compensation: The New Paradigm

Save this PDF as:
Size: px
Start display at page:

Download "Loan Originator Compensation: The New Paradigm"

Transcription

1 Loan Originator Compensation: The New Paradigm Presented for Maryland Association of Mortgage Professionals on March 3, 2011 by Marjorie A. Corwin Gordon, Feinblatt, Rothman, Hoffberger & Hollander, LLC 233 East Redwood Street Baltimore, Maryland Copyright, 2011 FRB Regulation Z Final Rule Federal Reserve Board issued a final rule amending Truth in Lending Act, Reg. Z and addressing loan originator compensation Published in the September 24, 2010 Federal Register Rule becomes effective for loan applications received by the creditor on and after April 1, 2011 Dodd-Frank Act The Dodd-Frank Act also regulates loan originator compensation It is largely similar to the FRB Rule Includes both compensation and steering prohibitions But there are a few significant differences We need to wait for regulations under the Dodd- Frank Act to truly understand the differences regarding steering. Will there be regulations clarifying the differences in loan originator compensation? 1

2 Liability Issues Traditional TILA Civil Liability for Creditors Actual damages Statutory damages (up to $4,000 for each individual action and potential class action) Attorneys fees and costs Enhanced TILA Liability for Creditors Refund all finance charges and fees paid by the consumer (unless the creditor demonstrates that the failure to comply is not material) Dodd-Frank Act Liability Issues New Civil Liability for Originators Greater of actual damages or three times compensation/gain for loan (liability even if there are no damages) Longer statute of limitations for loan originator compensation (and certain other) violations so that actions may be brought until end of 3-year (not 1- year) period from date of violation State Attorneys General authorized to enforce violations of loan originator compensation (and certain other) requirements Applicability of Final Rule Rule applies to compensation resulting from a closed-end, consumer loan transaction secured by a dwelling Includes: First liens Second liens Primary residences Second homes Reverse mortgages (but not HELOCs) 2

3 Applicability of Final Rule Rule applies to Loan Originators Any person who, for (or in expectation of) compensation or other monetary gain, arranges, negotiates, or otherwise obtains an extension of consumer credit for another person Includes individuals and entities (employees and employers) that meet this definition Applicability of Final Rule Rule applies to Loan Originators This does not include managers or administrative staff that do not arrange, negotiate, or otherwise obtain credit for a consumer and whose compensation is not based on whether any particular loan is originated Does not include TILA-defined creditors (but does include a table funded originator) FRB Regulation Z Final Rule The Rule prohibits: Dual compensation Lender paid broker compensation based on loan terms or conditions Steering 3

4 Dual Compensation Prohibited The Rule prohibits: Dual compensation Loan originator compensation cannot be paid both from the consumer and from any other person in connection with the same loan transaction Compensation Loan originator compensation is broadly described (from salary to prizes) Compensation includes amounts retained by a loan originator Compensation does not include amounts received by the loan originator but paid for bona fide and reasonable third-party charges (for example, appraisal and credit report) Dual Compensation Prohibited Under the Rule, compensation paid by the consumer may be established on any basis It may vary based on loan terms and conditions What is unclear: How does an employer compensate an employee when loan originator compensation comes from the consumer? 4

5 Lender Paid Compensation The Rule prohibits: Basing loan originator compensation paid by (from) the creditor to the loan originator on loan terms or conditions (except loan amount) Compensation Based on Loan Terms or Conditions What is Loan Term Based Compensation? Compensation based on the loan s Interest rate Annual percentage rate Loan-to-value ratio Existence of a prepayment penalty Perceived risk Type of loan product Lender Paid Compensation Compensation based on loan amount must be based on a consistent, fixed percentage However, it may be subject to established minimum or maximum dollar amounts Cannot vary fixed percentage based on different levels or tiers of loan amounts Fixed percentage may be changed (but not too often) 5

6 The Rule prohibits: Steering Prohibition Steering - Directing a consumer to a particular loan based on the fact that the loan originator will receive greater compensation from the creditor in that transaction than in other transactions the originator offered (or could have offered) unless the loan that closes is in the consumer s interest Steering rule does not apply if loan is being originated for an employer who will be the creditor (but will apply in a table funded transaction) Steering Prohibition While not required, if originator directs consumer to the transaction that results in the lowest creditor paid compensation, the steering rule will be satisfied If originator directs consumer to a transaction that results in greater compensation, steering rule is not violated if terms and conditions of that transaction compared to other realistically possible loans available through that originator are the same It s complicated and vague (subject to attack) Steering Prohibition: Safe Harbor There is a safe harbor disclosure that loan originators may provide to ensure the steering rule is not violated Compliance with the safe harbor may be difficult, particularly for loan originators with many potential creditors 6

7 Steering Prohibition: Safe Harbor Disclose for each type of transaction in which consumer has expressed an interest, loan options that include: Loan with lowest interest rate Loan with lowest interest rate and no risky features and Loan with lowest total dollar amount for discount points and origination points or fees Steering Prohibition: Safe Harbor Types of transactions are: Fixed rate Adjustable rate Reverse mortgage Dodd-Frank Act The Dodd-Frank Act also regulates loan originator compensation It is largely similar to the FRB Rule Includes both compensation and steering prohibitions But there are a few significant differences 7

8 Dodd-Frank Act: Differences Definition of loan originator is different Under Dodd-Frank Act, a mortgage originator is any person who: (i) takes a residential mortgage loan application; (ii) assists a consumer in obtaining or applying to obtain a residential mortgage loan; or (iii) offers or negotiates terms of such a loan. Dodd-Frank Act: Differences Definition of loan originator is different Mortgage originator is closer to the SAFE Act definition and likely will result in more individuals being subject to compensation and steering rules There is an exclusion for creditors from the definition of mortgage originator but the exclusion does not apply to the Dodd- Frank Act steering prohibitions Dodd-Frank Act: Differences Dual compensation is prohibited but Dodd-Frank does not allow consumer-paid compensation to vary based on loan terms If compensation is lender paid, then it appears no lender discount points, origination points, or fees will be permitted 8

9 Dodd-Frank Act: Differences Steering provisions are very different, including Imposes broker responsibility to consider borrower s ability to repay Favors qualified mortgages (e.g., plain and simple terms ) Prohibits abusive or unfair fair lending practices Prohibits mischaracterizing various aspects of the loan and lending process RESPA and State Law Concerns Rule suggests compensation may be based on number of loans delivered or pull through rates or similar bases, but RESPA Section 8 kickback rule still applies Rule suggests that minor overages retained by loan originator in connection with third-party fees may be acceptable, but Maryland Commissioner regulations prohibit such overages Document Concerns Broker agreements (and perhaps other documents) may need to be changed to reflect new compensation payment arrangements Compensation policies and agreements should be updated 9

10 New Recordkeeping Requirements The Rule requires creditors who pay loan originator compensation to retain records of the compensation paid as well as the compensation agreement in effect on the date the interest rate was set for the transaction Records should be retained for at least 2 years Thank you! Marjorie A. Corwin, Esquire Gordon, Feinblatt, Rothman, Hoffberger & Hollander, LLC 233 East Redwood Street Baltimore, Maryland Copyright,

Financial Regulatory Reform: The New Rules on Loan Originator Compensation

Financial Regulatory Reform: The New Rules on Loan Originator Compensation Financial Regulatory Reform: The New Rules on Loan Originator Compensation 1 Introduction NOTICE: This information is not intended to be used as legal advice to any person or entity. The information contained

More information

Amendment to the AFR Wholesale Broker Agreement regarding Amendments to Regulation Z. Table of Contents

Amendment to the AFR Wholesale Broker Agreement regarding Amendments to Regulation Z. Table of Contents Amendment to the AFR Wholesale Broker Agreement regarding Amendments to Regulation Z Table of Contents Section 1 General Principles for Compliance 1.1 Mission Statement..... 2 1.2 Summary of TILA Amendment....

More information

BROWN, FOWLER & ALSUP A Professional Corporation Attorneys at Law MEMORANDUM

BROWN, FOWLER & ALSUP A Professional Corporation Attorneys at Law MEMORANDUM BROWN, FOWLER & ALSUP A Professional Corporation Attorneys at Law J. Alton Alsup 10333 Richmond, Suite 860 Telephone 713/468-0400 Board Certified in Residential Real Estate Law Texas Board of Legal Specialization

More information

MLO COMPENSATION, REGULATION Z, AND DODD-FRANK ACT

MLO COMPENSATION, REGULATION Z, AND DODD-FRANK ACT MLO COMPENSATION, REGULATION Z, AND DODD-FRANK ACT Vermont Mortgage Bankers Association & Mortgage Bankers/Brokers Association of NH Mortgage Compliance Conference Thursday, March 3, 2011 Sean P. Mahoney

More information

The New Ability-to-Pay Rules; Qualified Mortgage Lending under the Dodd-Frank Act

The New Ability-to-Pay Rules; Qualified Mortgage Lending under the Dodd-Frank Act The New Ability-to-Pay Rules; Qualified Mortgage Lending under the Dodd-Frank Act October 2011 Scott D. Samlin Partner T +1 212-398-5819 scott.samlin@snrdenton.com Stephen F. J. Ornstein Partner T +1 202-408-9122

More information

The New Mortgage Servicing Rules. FMS East Coast Regional Conference September 17, 2013

The New Mortgage Servicing Rules. FMS East Coast Regional Conference September 17, 2013 The New Mortgage Servicing Rules FMS East Coast Regional Conference September 17, 2013 What are the new Mortgage Servicing Rules? Ability to Repay/Qualified Mortgage Rule 2013 HOEPA Rule Loan Originator

More information

National Banker Call

National Banker Call National Banker Call Loan Originator Compensation and HOEPA Final Rules Thursday, June 6, 2013 The information contained in this presentation is for informational purposes only and is provided as a public

More information

Regulatory Practice Letter

Regulatory Practice Letter RPL Number 10-17 Financial Services Regulatory Practice Regulatory Practice Letter ADVISORY Amendments to Mortgage Loan Provisions under Regulation Z Executive Summary The Federal Reserve Board ( Fed )

More information

Mortgage Lending laws and how it affects you, the REALTOR. Presented by Anders Hostelley and Leonard Loventhal

Mortgage Lending laws and how it affects you, the REALTOR. Presented by Anders Hostelley and Leonard Loventhal Mortgage Lending laws and how it affects you, the REALTOR. Presented by Anders Hostelley and Leonard Loventhal Secure and Fair Enforcement for Mortgage Licensing Act Title V of P.L. 110-289, the Secure

More information

Dodd Frank Mortgage Reform 2014

Dodd Frank Mortgage Reform 2014 Dodd Frank Mortgage Reform 2014 Business Partner Deck v1 12.16.13 Overview RULE EFFECTIVE DATE Loan Originator Compensation - TILA Loans closed and paid on or after 1/01/14 Ability to Repay/Qualified Mortgages

More information

Mortgage Loan Originator Compensation (12 CFR 1026)

Mortgage Loan Originator Compensation (12 CFR 1026) Mortgage Loan Originator Compensation (12 CFR 1026) In January 2013, the Consumer Financial Protection Bureau (CFPB) amended Regulation Z to implement requirements imposed by the Dodd-Frank Act concerning

More information

ESCROW REQUIREMENTS UNDER TILA

ESCROW REQUIREMENTS UNDER TILA Overview Escrow Requirements Reg. Z High Cost Mortgage and Counseling - Reg. Z & X Ability to Repay & Qualified Mortgages Reg. Z & X Mortgage Servicing Reg. Z & X Loan Originator Compensation Reg. Z Copies

More information

Financial Services Update - Special Alert January 30, 2013. CFPB Issues Final Loan Originator Compensation and Qualifications Rule

Financial Services Update - Special Alert January 30, 2013. CFPB Issues Final Loan Originator Compensation and Qualifications Rule Financial Services Update - Special Alert January 30, 2013 CFPB Issues Final Loan Originator Compensation and Qualifications Rule On January 20, the CFPB posted its final rule (the Rule) regarding loan

More information

ADVERTISING RULES FOR FINANCIAL INSTITUTIONS APRIL 2009

ADVERTISING RULES FOR FINANCIAL INSTITUTIONS APRIL 2009 ADVERTISING RULES FOR FINANCIAL INSTITUTIONS APRIL 2009 Presented by: Carla Stone Witzel and Marjorie A. Corwin Gordon, Feinblatt, Rothman, Hoffberger & Hollander, LLC 233 East Redwood Street Baltimore,

More information

NEW CFPB RULES FOR HIGH COST MORTGAGES AND HOMEOWNERSHIP COUNSELING February 3, 2013

NEW CFPB RULES FOR HIGH COST MORTGAGES AND HOMEOWNERSHIP COUNSELING February 3, 2013 NEW CFPB RULES FOR HIGH COST MORTGAGES AND HOMEOWNERSHIP COUNSELING February 3, 2013 On January 10, 2013, the Consumer Financial Protection Bureau ( CFPB ) issued a final rule that carries out changes

More information

Updated January 2014. X = Required to Provide = Provide if applicable = Optional. At Loan Application (or within 3 business days)

Updated January 2014. X = Required to Provide = Provide if applicable = Optional. At Loan Application (or within 3 business days) Sample List of Closed-End Residential Mortgage Disclosures Required to be Given to Consumers at Loan Application by Maryland Mortgage and Brokers Updated January 2014 Prepared by Marjorie A. Corwin, Esquire

More information

FRESH. Agenda. Credit Union Integrated Mortgage Disclosures Are you Prepared?

FRESH. Agenda. Credit Union Integrated Mortgage Disclosures Are you Prepared? MCUL & Affiliates 2015 Annual Convention and Exposition Credit Union Integrated Mortgage Disclosures Are you Prepared? Glory LeDu Thursday, June 4, 2015 2:00 p.m. Sponsored by: FRESH Ideas to Reinvent

More information

Regulatory Practice Letter February 2013 RPL 13-07

Regulatory Practice Letter February 2013 RPL 13-07 Regulatory Practice Letter February 2013 RPL 13-07 High Cost Mortgages and Homeownership Counseling; Escrow Requirements - CFPB Final Rules Executive Summary The Bureau of Consumer Financial Protection

More information

Regulatory Practice Letter June 2012 RPL 12-11

Regulatory Practice Letter June 2012 RPL 12-11 Regulatory Practice Letter June 2012 RPL 12-11 Mortgage Rule Modifications under CFPB Consideration Executive Summary The Bureau of Consumer Financial Protection ( CFPB ) has announced that it intends

More information

TILA-RESPA Integrated Disclosure Rule

TILA-RESPA Integrated Disclosure Rule TILA-RESPA Integrated Disclosure Rule May 13, 2015 Joseph J. Reilly Partner Benjamin K. Olson Partner 1 Key Changes Effective for applications received by the creditor or mortgage broker on or after August

More information

TILA/RESPA Integrated Disclosures. BRIAN A. NETTLEINGHAM Attorney/Shareholder Regulatory Compliance Group

TILA/RESPA Integrated Disclosures. BRIAN A. NETTLEINGHAM Attorney/Shareholder Regulatory Compliance Group TILA/RESPA Integrated Disclosures BRIAN A. NETTLEINGHAM Attorney/Shareholder Regulatory Compliance Group BACKGROUND Dodd-Frank Wall Street Reform Act Created the Consumer Financial Protection Bureau National

More information

CUNA s COMPLIANCE HIGHLIGHTS

CUNA s COMPLIANCE HIGHLIGHTS CUNA s COMPLIANCE HIGHLIGHTS TILA/RESPA INTEGRATED MORTGAGE DISCLOSURES For more than 30 years, Federal law has required lenders to provide two different disclosure forms to consumers applying for a mortgage.

More information

Overview The Regulation The Loan Estimate (LE) The Closing Disclosure (CD) Loan Estimate (LE) Application Date LE Responsibility

Overview The Regulation The Loan Estimate (LE) The Closing Disclosure (CD) Loan Estimate (LE) Application Date LE Responsibility To support your preparation efforts when implementing the TILA-RESPA Integrated Disclosure (TRID) rule effective for applications dated on or after October 3, 2015, we have created this Helpful Tips for

More information

Early Summary of Ability to Repay and Qualified Mortgage Rules under Dodd-Frank Wall Street Reform and Consumer Protection Act.

Early Summary of Ability to Repay and Qualified Mortgage Rules under Dodd-Frank Wall Street Reform and Consumer Protection Act. Early Summary of Ability to Repay and Qualified Mortgage Rules under Dodd-Frank Wall Street Reform and Consumer Protection Act January 11, 2013 OVERVIEW - On January 10, 2013, the Consumer Financial Protection

More information

CFPB Proposes New Mortgage Disclosure Rules

CFPB Proposes New Mortgage Disclosure Rules A DV I S O RY July 2012 On July 9, 2012, the Bureau of Consumer Financial Protection (CFPB) issued a proposed rule on mortgage disclosures (Proposed Rule) implementing requirements of the Dodd-Frank Wall

More information

Why real estate professionals, mortgage lenders and closing agents have to coordinate tasks during a real estate transaction.

Why real estate professionals, mortgage lenders and closing agents have to coordinate tasks during a real estate transaction. Why real estate professionals, mortgage lenders and closing agents have to coordinate tasks during a real estate transaction. The new Closing Disclosure replaces the current HUD-1 Settlement Statement

More information

Truth-In-Lending Real Estate Settlement Procedures Act Integrated Disclosures Webinar

Truth-In-Lending Real Estate Settlement Procedures Act Integrated Disclosures Webinar Office of Consumer Protection Truth-In-Lending Real Estate Settlement Procedures Act Integrated Disclosures Webinar February 11, 2015 The information contained in this presentation is for informational

More information

AMERICAN BAR ASSOCIATION CONSUMER FINANCIAL SERVICES COMMITTEE SPRING MEETING SAN FRANCISCO, CALIFIORNIA

AMERICAN BAR ASSOCIATION CONSUMER FINANCIAL SERVICES COMMITTEE SPRING MEETING SAN FRANCISCO, CALIFIORNIA AMERICAN BAR ASSOCIATION CONSUMER FINANCIAL SERVICES COMMITTEE SPRING MEETING SAN FRANCISCO, CALIFIORNIA TILA-RESPA INTEGRATED DISCLOSURE RULE BACKGROUND, TILA LIABILITIES & OPERATIONAL CONCERNS I. OVERVIEW

More information

Break Out Session: Mortgage Loan Servicing and Administration

Break Out Session: Mortgage Loan Servicing and Administration Break Out Session: Mortgage Loan Servicing and Administration 2 Agenda Mortgage Servicing Rules (Real Estate Settlement Procedures Act [RESPA] and Truth in Lending Act [TILA]) Effective Date: Applications

More information

Mon. ICBA Summary of the Military Lending Act Updated Regulation. August 2015. Month Year. Contact:

Mon. ICBA Summary of the Military Lending Act Updated Regulation. August 2015. Month Year. Contact: ICBA Summary of the Military Lending Act Updated Regulation August 2015 Month Year Mon Contact: Joe Gormley Assistant Vice President & Regulatory Counsel joseph.gormley@icba.org www.icba.org ICBA Summary

More information

Dodd Frank Act Mortgage Rules FAQs

Dodd Frank Act Mortgage Rules FAQs Dodd Frank Act Mortgage Rules FAQs Qualified Mortgage (QM) Criteria 3% Fee Cap What goes in to the calculation of fees? The same test is used for HOEPA and for QM. It includes everything that goes in to

More information

CFPB and Lenders. A presentation on the Consumer Financial Protection Bureau and its impact on the lending industry

CFPB and Lenders. A presentation on the Consumer Financial Protection Bureau and its impact on the lending industry CFPB and Lenders A presentation on the Consumer Financial Protection Bureau and its impact on the lending industry What is the Consumer Financial Protection Bureau (CFPB)? Independent agency of the United

More information

2013 Loan Originator Rule

2013 Loan Originator Rule JUNE 7, 2013 2013 Loan Originator Rule SMALL ENTITY COMPLIANCE GUIDE 1 Table of Contents Introduction 1. Introduction... 8 I. What is the purpose of this guide?... 10 II. Who should read this guide?...

More information

December 22, 2010. Dear Ms. Johnson,

December 22, 2010. Dear Ms. Johnson, December 22, 2010 Jennifer J. Johnson Secretary Board of Governors of the Federal Reserve System 20th Street and Constitution Avenue, NW Washington, DC 20551 Docket No. R 1390, Dear Ms. Johnson, The Conference

More information

The New Mortgage Lending Process: A 2014 Check-Up and 2015 Planning

The New Mortgage Lending Process: A 2014 Check-Up and 2015 Planning The New Mortgage Lending Process: A 2014 Check-Up and 2015 Planning Copyright 2012 Tata Consultancy Services Limited No Legal Advice, Opinions, or Services Provided This presentation does not constitute

More information

Multistate Mortgage Committee (MMC) STATE NONDEPOSITORY EXAMINER GUIDELINES FOR REGULATION Z LOAN ORIGINATOR COMPENSATION RULE

Multistate Mortgage Committee (MMC) STATE NONDEPOSITORY EXAMINER GUIDELINES FOR REGULATION Z LOAN ORIGINATOR COMPENSATION RULE I. INTRODUCTION Multistate Mortgage Committee (MMC) STATE NONDEPOSITORY EXAMINER GUIDELINES FOR REGULATION Z LOAN ORIGINATOR COMPENSATION RULE On August 26, 2009, the Federal Reserve Board (FRB) published

More information

1/22/2013. Mortgage U, Inc. Copyright 2012 Mortgage U, Inc. Copyright 2012 Mortgage U, Inc. Copyright 2012 Mortgage U, Inc.

1/22/2013. Mortgage U, Inc. Copyright 2012 Mortgage U, Inc. Copyright 2012 Mortgage U, Inc. Copyright 2012 Mortgage U, Inc. Mortgage U, Inc Compliance Is A New World Consumer Financial Protection Bureau Qualified Mortgage QM final rule Points and fees amendment High Cost Mortgage Rules High Cost Appraisal Rules ECOA & HMDA

More information

Small Business Review Panel and Cost of Credit Consultation for Residential Mortgage Loan Origination Standards Rulemaking

Small Business Review Panel and Cost of Credit Consultation for Residential Mortgage Loan Origination Standards Rulemaking Small Business Review Panel and Cost of Credit Consultation for Residential Mortgage Loan Origination Standards Rulemaking DISCUSSION ISSUES FOR SMALL ENTITY REPRESENTATIVES To help frame the small entity

More information

CFPB Issues Much Anticipated Final Rules: Ability to Repay, Qualified Mortgages, Escrow Requirements and Homeownership Counseling

CFPB Issues Much Anticipated Final Rules: Ability to Repay, Qualified Mortgages, Escrow Requirements and Homeownership Counseling CFPB Issues Much Anticipated Final Rules: Ability to Repay, Qualified Mortgages, Escrow Requirements and Homeownership Counseling The Consumer Financial Protection Bureau ( CFPB ) issued their much anticipated

More information

The CFPB s New Mortgage Rules: Is Your Financial Institution Ready?

The CFPB s New Mortgage Rules: Is Your Financial Institution Ready? BSA COMPLIANCE LOAN REVIEW VENDOR REVIEW MORTGAGE REVIEW The CFPB s New Mortgage Rules: Is Your Financial Institution Ready? September 18, 2013 Presented by: David Senior, Director of Enterprise Risk Management

More information

CFPB Regulations. Review & Enforcement

CFPB Regulations. Review & Enforcement CFPB Regulations Review & Enforcement Agenda Welcome Overview 2014 Regulations Loan Originator Compensation and Training, Certification, and Identifier Disclosure High-Cost/HOEPA Mortgage Loans & Homeownership

More information

January 20, 2015 Updated Changes:

January 20, 2015 Updated Changes: Get Ready! Get Set! August 1, 2015 is Around the Corner THE COMBINED TILA AND RESPA MORTGAGE DISCLOSURES (Memo Updated on 1/27/15 to include the changes below) As most of you are probably aware, a major

More information

Financial Services Update June 11, 2013

Financial Services Update June 11, 2013 Financial Services Update June 11, 2013 HIGHLIGHTS Federal Regulatory Developments: CFPB Amends Examination Manual State Regulatory Developments: Texas Proposes Constitutional Amendment Regarding Reverse

More information

Qualified Mortgage Rule After 6 Months

Qualified Mortgage Rule After 6 Months Latest Developments Under TILA and RESPA Attorney David Pelletier dpelletier@axley.com 608.260.2495 Attorney Kevin D. Trost ktrost@axley.com 608.283.6747 WISCONSIN BANKING LAW UPDATE Community Bankers

More information

A Primer on the New CFPB Regulations Governing Residential Closings. Navigating the New Forms (Loan Estimate and Closing Disclosure.

A Primer on the New CFPB Regulations Governing Residential Closings. Navigating the New Forms (Loan Estimate and Closing Disclosure. A Primer on the New CFPB Regulations Governing Residential Closings. Navigating the New Forms (Loan Estimate and Closing Disclosure.) For loan applications received beginning October 3, 2015. Disclaimer:

More information

Final Rule Governing Loan Originator Compensation Practices

Final Rule Governing Loan Originator Compensation Practices August 31, 2010 Final Rule Governing Loan Originator Compensation Practices By Joseph Gabai Background On August 16, 2010, the Federal Reserve Board ( Board ) issued two proposed rules and three final

More information

Uncertainty Regarding Fed Proposal and CFPB Action on Minimum Underwriting Standards for Consideration of a Consumer s Ability to Repay

Uncertainty Regarding Fed Proposal and CFPB Action on Minimum Underwriting Standards for Consideration of a Consumer s Ability to Repay June 2011 Uncertainty Regarding Fed Proposal and CFPB Action on Minimum Underwriting Standards for Consideration of a Consumer s Ability to Repay BY KEVIN L. PETRASIC, HELEN Y. LEE & AMANDA M. JABOUR Comments

More information

TILA-RESPA Integrated Disclosure (TRID) Correspondent Division. Overview. Loan Estimate (LE) Key points. Topic The Regulation

TILA-RESPA Integrated Disclosure (TRID) Correspondent Division. Overview. Loan Estimate (LE) Key points. Topic The Regulation Overview The Regulation The Consumer Financial Protection Bureau (CFPB) issued a final rule amending Regulation Z (Truth in Lending Act) and Regulation X (Real Estate Settlement Procedures Act) to integrate

More information

TILA-RESPA Integrated Disclosures

TILA-RESPA Integrated Disclosures Outlook Live Webinar- June 17, 2014 TILA-RESPA Integrated Disclosures Presented by the Consumer Financial Protection Bureau Visit us at www.consumercomplianceoutlook.org Disclaimer The Bureau issued the

More information

Summary of the Mortgage Lending Provisions In the Dodd-Frank Wall Street Reform and Consumer Protection Act

Summary of the Mortgage Lending Provisions In the Dodd-Frank Wall Street Reform and Consumer Protection Act Summary of the Mortgage Lending Provisions In the Dodd-Frank Wall Street Reform and Consumer Protection Act Prepared by Robert A. Cook and Meghan Musselman Hudson Cook Revised as of July 30, 2010 A Few

More information

A New Era in Closings CFPB s Final Rule for Integrated Mortgage Disclosures. Michelle L. Korsmo Chief Executive Officer Steven Gottheim Counsel

A New Era in Closings CFPB s Final Rule for Integrated Mortgage Disclosures. Michelle L. Korsmo Chief Executive Officer Steven Gottheim Counsel A New Era in Closings CFPB s Final Rule for Integrated Mortgage Disclosures Michelle L. Korsmo Chief Executive Officer Steven Gottheim Counsel Agenda Basics: Why We re Here Final Rule The New Forms Evaluating

More information

ii. 25(c)(2) Records related to requirements for loan originator compensation and

ii. 25(c)(2) Records related to requirements for loan originator compensation and 4. In Supplement I to Part 1026 Official Interpretations: A. Under Section 1026.25 Record Retention: i. Under 25(a) General rule, paragraph 5 is removed. ii. 25(c)(2) Records related to requirements for

More information

Update on CFPB s TILA- RESPA Integrated Disclosure Rule

Update on CFPB s TILA- RESPA Integrated Disclosure Rule Update on CFPB s TILA- RESPA Integrated Disclosure Rule Mortgage Bankers Ruth A. Dillingham, Special Counsel First American Title Insurance Company This presentation is for informational purposes only

More information

Overview. General Requirements

Overview. General Requirements Truth in Lending Act Overview Congress passed legislation increasing the amount and type of credit information disclosed to the consumer through Title I of the Consumer Credit Protection Act of 1968, known

More information

Changes in Mortgage Regulation in 2013 Katie Wechsler December, 2012

Changes in Mortgage Regulation in 2013 Katie Wechsler December, 2012 Changes in Mortgage Regulation in 2013 Katie Wechsler December, 2012 In 2011 and 2012 the Federal banking agencies proposed several regulations to the mortgage industry, none of which have been finalized,

More information

2015 TILA-RESPA Compliance: Is Your Business Ready?

2015 TILA-RESPA Compliance: Is Your Business Ready? 2015 TILA-RESPA Compliance: Is Your Business Ready? The long-anticipated Truth-in-Lending (TILA), and Real Estate Settlement Procedures Act (RESPA) changes that were finalized in 2013 go into effect this

More information

ABILITY TO REPAY/QUALIFIED MORTGAGE RULE

ABILITY TO REPAY/QUALIFIED MORTGAGE RULE ABILITY TO REPAY/QUALIFIED MORTGAGE RULE Overview Information contained in this document is proprietary to Quicken Loans Inc. and may not be reproduced or disclosed without written authorization. This

More information

CFPB THE NEW DISCLOSURE FORMS AND REQUIREMENTS BE READY!!

CFPB THE NEW DISCLOSURE FORMS AND REQUIREMENTS BE READY!! CFPB THE NEW DISCLOSURE FORMS AND REQUIREMENTS BE READY!! CELIA C. FLOWERS FLOWERS DAVIS, P.L.L.C. and EAST TEXAS TITLE COMPANY Tyler, Texas 75701 TILA and RESPA History 2012 TEXAS LAND TITLE INSTITUTE

More information

BANK SECRECY ACT REQUIREMENTS FOR RESIDENTIAL MORTGAGE LOAN ORIGINATIORS: AN OVERVIEW

BANK SECRECY ACT REQUIREMENTS FOR RESIDENTIAL MORTGAGE LOAN ORIGINATIORS: AN OVERVIEW BANK SECRECY ACT REQUIREMENTS FOR RESIDENTIAL MORTGAGE LOAN ORIGINATIORS: AN OVERVIEW June 6, 2012 Marjorie A. Corwin, Esquire Gordon Feinblatt LLC 233 East Redwood Street Baltimore, Maryland 21202 410-576-4041

More information

CFPB Consumer Laws and Regulations

CFPB Consumer Laws and Regulations Regulation X Real Estate Settlement Procedures Act The Real Estate Settlement Procedures Act of 1974 () (12 U.S.C. 2601 et seq.) (the Act) became effective on June 20, 1975. The Act requires lenders, mortgage

More information

CFPB and Real Estate Agents. A course on the Consumer Financial Protection Bureau and its significant impact on real estate agents

CFPB and Real Estate Agents. A course on the Consumer Financial Protection Bureau and its significant impact on real estate agents CFPB and Real Estate Agents A course on the Consumer Financial Protection Bureau and its significant impact on real estate agents What is the Consumer Financial Protection Bureau (CFPB)? Independent agency

More information

Employer to Employee Compensation:

Employer to Employee Compensation: Fowler Williams, CMB Executive Vice President Crescent Mortgage Company Fed Rule Question and Answer Update 3-16-2011 This Question and Answer is provided based on customer questions received by Crescent

More information

SUBCHAPTER 03K - REVERSE MORTGAGES SECTION.0100 - ADMINISTRATIVE

SUBCHAPTER 03K - REVERSE MORTGAGES SECTION.0100 - ADMINISTRATIVE SUBCHAPTER 03K - REVERSE MORTGAGES SECTION.0100 - ADMINISTRATIVE 04 NCAC 03K.0101 DEFINITIONS; FILINGS (a) As used in this Subchapter, unless the context clearly requires otherwise: (1) Terms defined in

More information

QUICK REFERENCE GUIDE TO DISCLOSURES TRUTH IN LENDING ACT AND REGULATION Z (1) (CLOSED-END HOME MORTGAGE TRANSACTIONS)

QUICK REFERENCE GUIDE TO DISCLOSURES TRUTH IN LENDING ACT AND REGULATION Z (1) (CLOSED-END HOME MORTGAGE TRANSACTIONS) QUICK REFERENCE GUIDE TO DISCLOSURES TRUTH IN LENDING ACT AND REGULATION Z (1) (CLOSED-END HOME MORTGAGE TRANSACTIONS) Type of (2) Contents of Truth in Lending Statements 226.17 226.36 Early s 226.19(a)(1)

More information

Summary of Content Changes 2015.2 Update June 2015

Summary of Content Changes 2015.2 Update June 2015 Summary of Content Changes 2015.2 Update June 2015 General Notes In this policy release, we are moving forward with the policy revisions associated with the Truth in Lending Act (TILA) and Real Estate

More information

2013 Loan Originator Rule

2013 Loan Originator Rule JANUARY 13, 2014 2013 Loan Originator Rule SMALL ENTITY COMPLIANCE GUIDE 1 Version Log The Bureau updates this guide on a periodic basis to reflect finalized clarifications to the rule which impacts guide

More information

Ability to Repay and Qualified Mortgage Rule

Ability to Repay and Qualified Mortgage Rule Ability to Repay and Qualified Mortgage Rule The Consumer Financial Protection Bureau adopted a rule that implements the Ability to Repay and Qualified Mortgage ( ATR/QM ) provisions of the Dodd-Frank

More information

Company Business Model Advertising and Marketing Loan Disclosures and Terms Underwriting, Appraisals, and Originator Compensation

Company Business Model Advertising and Marketing Loan Disclosures and Terms Underwriting, Appraisals, and Originator Compensation Mortgage Origination These Mortgage Origination Examination Procedures ( Procedures ) consist of modules covering the various elements of the mortgage Exam Date: Prepared By: Reviewer: Docket #: Entity

More information

November 6, 2012. The Honorable Richard Cordray Director Consumer Financial Protection Bureau 1700 G Street NW Washington, DC 20006-4702

November 6, 2012. The Honorable Richard Cordray Director Consumer Financial Protection Bureau 1700 G Street NW Washington, DC 20006-4702 November 6, 2012 The Honorable Richard Cordray Director Consumer Financial Protection Bureau 1700 G Street NW Washington, DC 20006-4702 Re: Integrated Mortgage Disclosures under the Real Estate Settlement

More information

Regulation X Real Estate Settlement Procedures Act

Regulation X Real Estate Settlement Procedures Act Regulation X Real Estate Settlement Procedures Act The Real Estate Settlement Procedures Act of 1974 (RESPA) (12 U.S.C. 2601 et seq.) (the act) became effective on June 20, 1975. The act requires lenders,

More information

SPECIAL ALERT: CFPB PROPOSES SIGNIFICANT EXPANSION OF HMDA REPORTING REQUIREMENTS

SPECIAL ALERT: CFPB PROPOSES SIGNIFICANT EXPANSION OF HMDA REPORTING REQUIREMENTS SPECIAL ALERT: CFPB PROPOSES SIGNIFICANT EXPANSION OF HMDA REPORTING REQUIREMENTS JULY 30, 2014 On July 24, the Consumer Financial Protection Bureau (the CFPB or Bureau) issued a proposed rule that would

More information

DEPARTMENT OF FINANCIAL AND PROFESSIONAL REGULATION NOTICE OF PROPOSED AMENDMENTS

DEPARTMENT OF FINANCIAL AND PROFESSIONAL REGULATION NOTICE OF PROPOSED AMENDMENTS TITLE 38: FINANCIAL INSTITUTIONS CHAPTER II: PART 346 PREDATORY LENDING DATABASE Section 346.10 Definitions 346.15 Information Required 346.20 Standards for Credit Counseling (Repealed) 346.21 Standards

More information

New Loan Origination and Mortgage Servicing Rules

New Loan Origination and Mortgage Servicing Rules 5/15/ New Loan Origination and Mortgage Servicing Rules Personal Finance Seminar for Professionals University of Maryland Extension Presenter: Diane Cipollone, Esq. Director of Training National Fair Housing

More information

Know Before You Owe. TILA-RESPA Integrated Disclosure (TRID) Rule

Know Before You Owe. TILA-RESPA Integrated Disclosure (TRID) Rule Know Before You Owe TILA-RESPA Integrated Disclosure (TRID) Rule Background of CFPB The Consumer Financial Protection Bureau (CFPB) was established in 2010 under the Dodd-Frank Act Directed to publish

More information

Consumer Financial Protection Bureau Issues Ability-to-Repay and Qualified-Mortgage Standards Implementing Dodd-Frank

Consumer Financial Protection Bureau Issues Ability-to-Repay and Qualified-Mortgage Standards Implementing Dodd-Frank January 14, 2013 Consumer Financial Protection Bureau Issues Ability-to-Repay and Qualified-Mortgage Standards Implementing Dodd-Frank On January 10, 2013, the Consumer Financial Protection Bureau ( CFPB

More information

HOME OWNERSHIP EQUITY PROTECTION ACT OF 1994. Raymond Natter 1

HOME OWNERSHIP EQUITY PROTECTION ACT OF 1994. Raymond Natter 1 HOME OWNERSHIP EQUITY PROTECTION ACT OF 1994 Raymond Natter 1 Recent Congressional attention to the problems of predatory mortgage lending has led for calls for the Federal Reserve Board to use its authority

More information

Understanding the CFPB s TILA-RESPA Integrated Disclosures. Marvin Stone SVP, Business Integration CFPB Program Manager Stewart Title Guaranty Corp.

Understanding the CFPB s TILA-RESPA Integrated Disclosures. Marvin Stone SVP, Business Integration CFPB Program Manager Stewart Title Guaranty Corp. Understanding the CFPB s TILA-RESPA Integrated Disclosures Marvin Stone SVP, Business Integration CFPB Program Manager Stewart Title Guaranty Corp. A Brief History. Truth-in-Lending Act (TILA) of 1968

More information

Policy Guidance on Supervisory and Enforcement Considerations Relevant to Mortgage

Policy Guidance on Supervisory and Enforcement Considerations Relevant to Mortgage BILLING CODE: 4810-AM-P BUREAU OF CONSUMER FINANCIAL PROTECTION Policy Guidance on Supervisory and Enforcement Considerations Relevant to Mortgage Brokers Transitioning to Mini-Correspondent Lenders AGENCY:

More information

CFPB Integrated Mortgage Disclosures

CFPB Integrated Mortgage Disclosures CFPB Integrated Mortgage Disclosures Today s Goal To help you not only understand the rule changes, but make sure you have the tools, resources and support to take action to implement in your credit union

More information

Assembly Bill No. 344 CHAPTER 733

Assembly Bill No. 344 CHAPTER 733 Assembly Bill No. 344 CHAPTER 733 An act to amend Sections 4970, 4973, 4974, 4975, 4977, 4978, 4978.6, 4979, and 4979.7 of the Financial Code, as added by Assembly Bill 489 of the 2001-02 Regular Session,

More information

Real Estate Settlement Procedures Act

Real Estate Settlement Procedures Act Background The Real Estate Settlement Procedures Act of 1974 (RESPA) (12 USC 2601-17), which is implemented by the Department of Housing and Urban Development s Regulation X (24 CFR 3500), became effective

More information

STATE HIGH COST/PREDATORY LENDING REGULATIONS Updated 1/10/2014

STATE HIGH COST/PREDATORY LENDING REGULATIONS Updated 1/10/2014 STATE HIGH COST/PREDATORY LENDING REGULATIONS Updated 1/10/2014 State: Law: Cite: North Carolina NC High Cost Home Loan Law NC Rate Spread Home Loans Check both rules HB 2188 effective 10/01/2008 changes

More information

Examination Procedures Mortgage Origination

Examination Procedures Mortgage Origination These Examination Procedures ( Procedures ) consist of modules covering the various elements of the mortgage origination process; each module identifies specific matters for review. Examiners will use

More information

CFPB Regulations on Ability to Repay and Qualified Mortgages. MDDCCUA Training

CFPB Regulations on Ability to Repay and Qualified Mortgages. MDDCCUA Training CFPB Regulations on Ability to Repay and Qualified Mortgages MDDCCUA Training October 30, 2013 E. Andrew Keeney, Esq. Kaufman & Canoles, P.C. Ability-to-Repay and Qualified Mortgage Rules E. Andrew Keeney,

More information

FAQs About RESPA for Industry

FAQs About RESPA for Industry FAQs About RESPA for Industry 1. What kinds of transactions are covered under RESPA? Transactions involving a federally related mortgage loan, which includes most loans secured by a lien (first or subordinate

More information

60-Second Compliance Summary. REGULATION Z Truth in Lending Closed-End Credit. Unit

60-Second Compliance Summary. REGULATION Z Truth in Lending Closed-End Credit. Unit Unit 1 REGULATION Z Truth in Lending Closed-End Credit 60-Second Compliance Summary Establishes comprehensive disclosure requirements for consumer credit products Protects consumers against unfair credit

More information

To Receive CPE Credit

To Receive CPE Credit Revisions to Loan Originator Compensation & Qualifications Under TILA Nancy Schoolman Senior Managing Consultant nschoolman@bkd.com 314.231.9844 Sheldon Hendrix Managing Consultant shendrix@bkd.com 713.499.4600

More information

CFPB FINAL RULES SUN WEST IMPLEMENTATION GUIDE

CFPB FINAL RULES SUN WEST IMPLEMENTATION GUIDE CFPB FINAL RULES SUN WEST IMPLEMENTATION GUIDE January 02, 2015 In case of any queries regarding the information available in this guide, please reach us at qmteam@swmc.com. Sun West Mortgage Company,

More information

9-Jul-08 State Responses to Housing Crisis: Legislative Solutions

9-Jul-08 State Responses to Housing Crisis: Legislative Solutions 9-Jul-08 State Responses to Housing Crisis: Legislative Solutions Arkansas 4/16/03 7/15/03 HB 2598 California 7/8/08 7/8/08 SB 1137 10/5/07 10/5/07 SB 223 10/5/07 SB 385 Enacts Arkansas Home Loan Protection

More information

Do it Right When Lending to Insiders: A Guide to Regulation O

Do it Right When Lending to Insiders: A Guide to Regulation O www.bankdirector.com Strong Board. Strong Bank. Bank Director s Educational Program for Members of the Board Do it Right When Lending to Insiders: A Guide to Regulation O WHITE PAPER 2 DO IT RIGHT WHEN

More information

MRS Title 9-A 8-103. Definitions and rules of construction

MRS Title 9-A 8-103. Definitions and rules of construction 9-A 8-103. Definitions and rules of construction The text included in this publication was prepared by the Maine Bureau of Financial Institutions and is current through July 15, 2008. It is a version that

More information

Introduction. The new rules and forms take effect October 3 rd, 2015 for all loan applications submitted on or after that date.

Introduction. The new rules and forms take effect October 3 rd, 2015 for all loan applications submitted on or after that date. Introduction The new rules and forms take effect October 3 rd, 2015 for all loan applications submitted on or after that date. Phased-in approach: Continue to close out loans in the lender s pipeline using

More information

TITLE I-RESIDENTIAL MORTGAGE LOAN ORIGINATION STANDARDS

TITLE I-RESIDENTIAL MORTGAGE LOAN ORIGINATION STANDARDS TITLE I-RESIDENTIAL MORTGAGE LOAN ORIGINATION STANDARDS Residential Mortgage Origination: Adds a number of new regulations and requirements to mortgage loan originators. The bill requires originators to

More information

Higher Priced Mortgage Loans Higher Priced Covered Transactions Qualified Mortgages High Cost Mortgage Loans Total Points and Fees

Higher Priced Mortgage Loans Higher Priced Covered Transactions Qualified Mortgages High Cost Mortgage Loans Total Points and Fees Seeded and Actual Questions from our Dodd Frank Act Mortgage Regulations Implementation Workshops Fort Walton Beach, Orlando, and Tampa September 2013 Ability to Repay Lending Questions 1. We are not sure

More information

Please see Section IX. for Additional Information:

Please see Section IX. for Additional Information: The Florida Senate BILL ANALYSIS AND FISCAL IMPACT STATEMENT (This document is based on the provisions contained in the legislation as of the latest date listed below.) Prepared By: The Professional Staff

More information

02-0649. July 29, 2002

02-0649. July 29, 2002 Department of Banking and Finance 2990 Brandywine Road, Suite 200 Atlanta, Georgia 30341-5565 Sonny Perdue 770-986-1633 David G. Sorrell Governor www.gadbf.org Acting Commissioner Declaratory Ruling To:

More information

24-1.1E. Restrictions and limitations on high-cost home loans.

24-1.1E. Restrictions and limitations on high-cost home loans. 24-1.1E. Restrictions and limitations on high-cost home loans. (a) Definitions. The following definitions apply for the purposes of this section: (1) "Affiliate" means any company that controls, is controlled

More information

Title 9-A: MAINE CONSUMER CREDIT CODE

Title 9-A: MAINE CONSUMER CREDIT CODE Maine Revised Statutes Title 9-A: MAINE CONSUMER CREDIT CODE Article : 8-506. ENHANCED RESTRICTIONS ON CERTAIN CREDITORS In addition to the compliance requirements of section 8-504, subsection 1, unless

More information