VMP® Mortgage Solutions Information Letter Archive
June 2006

REGULATORY WATCH

In the mortgage industry, there is much anticipation surrounding proposed legislation and possible proposed rulemaking as well as some public hearings.

Some of the topics being discussed and talked about include the proposed guidance for nontraditional mortgage lending as well as the public hearings taking place this summer regarding the Home Ownership and Equity Protection Act of 1994 (HOEPA).

Other highly discussed topics that may influence the mortgage industry include the possible proposed rule for reform of the Real Estate Settlement Procedures Act (RESPA) and the Expanding American Homeownership Act of 2006.

Wolters Kluwer Financial Services is continually monitoring all of these hot topics for the mortgage industry. The sections below provide you with the highlights of these important issues, as well as links to further information. As always, we will continue to provide the most current information as it becomes available.

Proposed Guidance for Nontraditional Mortgage Lending

In December 2005, the agencies of the Federal Reserve Board, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Office of Thrift Supervision, and the National Credit Union Administration issued a joint proposed guidance for nontraditional mortgage lending. The focus of this guidance is on risks involved with Payment Option ARMs and interest-only loans to not only the consumer but also the lender. It addresses prudent lending practices—including underwriting requirements, risk management protection, and consumer protection concerns. This guidance was open for comments from the public until March 2006. According to the Federal Trade Commission, which hosted a workshop in May 2006 to discuss the key points of the proposed guidance, the agencies should be issuing a final guidance later this summer. To read the proposed guidance in full, go to:  http://hudclips.org/sub_nonhud/cgi/pdf/24562.pdf.

Home Ownership and Equity Protection Act of 1994 (HOEPA)

The Federal Reserve Board announced in May that it will hold four different hearings this summer to discuss how effective the 2002 provisions to Regulation Z have been in protecting the consumer. The Board is anticipating that the hearings may also identify matters for which educational materials can be developed, as well as determine the impact the rules have had on the availability of credit in the high-cost arena of subprime lending. To read the notice published in the Federal Register, go to: http://hudclips.org/sub_nonhud/cgi/pdf/6803.pdf.

Real Estate Settlement Procedures Act (RESPA)

Last summer, HUD held several roundtable discussions to talk about RESPA reform. In these discussions, HUD Secretary Alphonso Jackson met with representatives from various lending organizations, financial institutions, and other interest groups. The focus of the meetings was to discuss ideas and opinions surrounding reform of the Good Faith Estimate process, as well as the concept of bundling costs. According to a recent article in American Banker Online, Secretary Jackson is getting closer to releasing a proposed rule to reform the enforcement of RESPA.

Expanding American Homeownership Act of 2006

In April 2006, Robert Ney (R-OH) introduced HR 5121, the Expanding American Homeownership Act of 2006—a bill to modernize and update the National Housing Act. This bill would create a new risk-based insurance premium amount based on the credit profile of the borrower. It would also provide flexibility to the Federal Housing Administration (FHA) to increase and simplify the loan limits for their single-family mortgage insurance program. Another provision would allow FHA more flexibility in introducing new products and program changes, such as a flexible down payment program.

SEVEN REASONS TO CONSIDER BILINGUAL DOCUMENTS

Lenders across the country are realizing the benefits of offering bilingual documents to their customers. Here are some of the top reasons you should consider offering or expanding bilingual documents at your organization:

1. Expand your share of the Hispanic market by providing the tools necessary to communicate with Hispanic consumers.
2. Bridge the language and information gaps to gain incremental business from the Hispanic community.
3. Improve customer service by providing important information in a bilingual format.
4. Build trust and credibility within the Hispanic community.
5. Gain a competitive edge to penetrate the Hispanic market.
6. Build brand recognition as a foundation for long-term relationships and a continuous source of referrals.
7. High probability for cross-sell opportunities—since 40 percent of the Hispanic population does not have a relationship with a bank.

Learn new ways to approach other tough business issues you face. Check out our on-line Executive Briefing calendar at www.WoltersKluwerFS.com/briefing.

BILINGUAL FORMS UPDATE

Bilingual mortgage forms are now available for fixed rate programs in New York and Florida. Fixed rate mortgage forms for California will be available in August 2006. Other states to follow are North Carolina, South Carolina, Texas, Arizona, and Illinois.

Conventional Up-Front and Closing Bilingual Base Package

BI788 BI770R BI501P BI502 BI21N BI122 BI23B BI128 BI132 BI140 BI30 BI552R BI6** BI5N or BI5N**

Truth In Lending Good Faith Estimate Settlement Statement Pg 1 Settlement Statement Pg 2 Uniform Residential Loan Application (Freddie Mac version) Appraisal Disclosure Notice Borrower Authorization Important Applicant Information Notice of Action Taken Credit Score Notice/FACT Act Statement of Credit Denial Transfer of Servicing Disclosure Mortgage or Deed of Trust (available for NY and FL currently) Note (multistate and state specific)

Conventional State-Specific Packages

New York
BI1077NY BI1078NY BI1082NY BI1084NY BI1BI6ANY22 BI5NNY BI1081NY	NY Lock In Agreement NY Pre-Application Discount & Fee Agreement NY Interest Rate Lock Commitment NY Lock In Expiration Notice NY Mortgage With MERS NY Fixed Rate Note NY Prevailing Interest Rate Commitment
Florida
BI14FL BI96FL BI969FL BI987FL BI1032FL BI1039FL	Errors & Omissions FL Mortgage Loan Commitment Pre-Application Disclosure Lender/Correspondent Application Disclosure Notice to Purchaser-Mortgagor FL Anti-Coercion Notice

For more information about bilingual mortgage forms, please call 248-430-1300.