What significant amendments are being made to the Qualified Written Request (“QWR”) rules under RESPA effective January 10, 2014?
We are getting ready to complete our HMDA filing report and we have many prequalification requests. Are prequalifications considered “applications” under HMDA, and, therefore, must be included in our HMDA-LAR?
What is the definition of an “affiliate,” with respect to the QM 3% Points and Fees cap under the Ability-to-Repay and Qualified Mortgage rule?
As a servicer, we issue a payment shock notice. I have always thought that this notice was a requirement. But I am being told that issuing a payment shock notice is optional and not a requirement. Are we required to issue a payment shock notice?
We are lenders and our Loan Origination System caused an error in the APR of a residential mortgage loan transaction. Given that this was not our error, but the error of the system itself, are we protected from liability?
What is RESPA’s fee splitting prohibition? Also, what is the definition of a “referral fee” and which referral fees are permitted?
- A payment to an attorney at law for services actually rendered.
- A payment by a title company to its duly appointed agent for services actually performed in the issuance of a policy of title insurance.
- A payment by a lender to its duly appointed agent or contractor for services actually performed in the origination, processing, or funding of a loan.
- A payment to any person of a bona fide salary or compensation or other payment for goods or facilities actually furnished or for services actually performed.
- A payment pursuant to cooperative brokerage and referral arrangements or agreements between real estate agents and real estate brokers. (Only to fee divisions within real estate brokerage arrangements when all parties are acting in a real estate brokerage capacity.)
- Normal promotional and educational activities that are not conditioned on the referral of business and that do not involve the defraying of expenses that otherwise would be incurred by persons in a position to refer settlement services or business incident thereto.
- An employer’s payment to its own employees for any referral activities.
What are the additional disclosure requirements for originating a reverse mortgage loan?
- A disclosure that the applicant is not obligated to complete the reverse mortgage transaction, even if the applicant received specific reverse mortgage disclosures, and even if the applicant has signed an application for a reverse mortgage loan.
- A Good Faith Estimate that provides the total cost of the credit extended, and expressed as a table of “total annual loan cost rates.”
- An itemization containing the loan terms, charges, age of the youngest borrower, and the appraised value of the property.
- An explanation of the table of the “total annual loan cost rates” that are provided in the model form found in Regulation Z.
The borrower is not available to attend the closing. Besides state law, what are other requirements to consider if the borrower wants to use a Power of Attorney to permit an agent to sign the closing documents?
- The name on the POA must match the name on the loan documents; it must reference the address of the subject property, it must be dated so it’s effective when the agent signs the document and it must be notarized. In addition, if the agent named in the POA executes the original 1003, the borrower must be actively serving in the US armed forced outside the US or the POA must expressly state an intention to secure a loan on a specific property.
- Except as otherwise required by applicable law or unless the agent is the borrower’s relative, the following individuals may not sign the note or mortgage as an agent of the borrower pursuant to a POA: the lender, loan originator, title insurance company, or financially interested real estate agent. Additionally prohibited from acting as an agent are any of these entities’ employees, employers, relatives, or affiliates.
- Except as required by applicable law, a POA may not be utilized to sign a note or mortgage if: i) no other borrower executes the note or mortgage in person in front of a notary public (this restriction does not apply if the designated agent is either the borrower’s attorney or relative); or (ii) it’s a cash-out transaction.
If the origination fee is a percent of the loan amount, and the loan amount INCREASES due to a higher appraised value than originally used on the GFE, is the origination fee charged at settlement allowed to increase under the COC, with proper re-disclosure?
We have an advertisement on our website and we also send out an email advertisement that is the same as the website advertisement. Are these considered a single advertisement? If so, what are the obligations for each advertisement?
It is my understanding that unless there is a “changed circumstance”, a Good Faith Estimate (GFE) is binding on the lender. What constitutes a “changed circumstance” such that a revised GFE may be re-disclosed, and what is the time frame for re-disclosing?
- Acts of God, War, Disaster or other emergencies.
- New information obtained that was not relied upon when the initial GFE was provided.
- Identification of inaccurate information provided by the Borrower used to prepare the GFE.
- Borrower requested changes in loan terms.
- Other changes particular to the Borrower or transaction, including without limitation, boundary disputes, need for flood insurance, or environmental problems.
- Rate lock expiration or Borrower requests a rate lock extension at a cost to Borrower.
- Loan amount changes due to Borrower request, change to payoff amount, change to obligations.
- Borrower requests an escrow waiver or decides to no longer waive escrow.
- Borrower estimated property value not supported by appraisal.
- Credit quality change due to new information received such as FICO score, DTI, undisclosed debts, judgments, income change.
- Occupancy change (i.e., property initially thought to be a primary residence becomes investment property).
- Some situations must be evaluated on a case-by-case basis to determine if a changed circumstance occurred. Such situations include, without limitation:
- Borrower not proceeding quickly to closing.
- Parties added or removed from title.
- Signing documents using a power of attorney.
- Vendor for a settlement service goes out of business.
- Property type changes (i.e., single family residence is actually multi-family).
- GSE, FHA, mortgage insurance program changes.
- Lender does not accept broker issued GFE.
- Market fluctuations on a locked loan.
- Borrower’s name.
- Information in a credit report generated before the issuance of the GFE.
- Any change which is known or should have been known by the loan originator at the time the initial GFE was issued.