Mortgage Changes

Regulation Mandated By

Section Number

Description of Provision

Solutions and Services

7/21/2011

§615

Sales or purchases involving insiders

Depository institutions may not purchase an asset from, or sell an asset to, a Regulation O insider, or any related interest of an insider unless on market terms. In addition, board of directors' prior approval will be required for transactions exceeding 10% of capital and surplus.

Documents

Software Solutions

7/21/2011

§941

Credit risk retention

Requires the federal banking agencies and the SEC to jointly prescribe rules requiring securitizers to retain an economic interest of at least 5% of the credit risk of assets they securitize. Proposed rule was published in the Federal Register on 3/29/2011. The comment period has been extended to August 1, 2011.

Software Solutions

7/21/2011

§1088

FCRA amendments

New model forms must be issued by the bureau for providing a Notice regarding Negative information about the consumer. In addition, regulations may be issued restricting the inappropriate use of medical information.

Research / Monitoring Tools

Documents

Integrated Solutions

Software Solutions

Compliance Services

7/21/2011

(but new reports will not be required until the first January 1 that occurs after the end of the 9-month period beginning on the date on which final regulations are issued by the Bureau.)

§1094

HMDA amendments

This section will make substantial changes to content and format of HMDA reports that are made. Information will include the points and fees payable at origination, the difference between the APR and a benchmark rate, prepayment penalty information, the value of real property pledged as collateral, the term of any introductory period before an interest rate change, whether payments other than fully amortizing payments may be made, the channel through which the application was made, unique identifiers for the originator under the SAFE Act, a universal loan identifier, a property parcel number, a credit score and, in case that list wasn't enough, any other information that the bureau may require.

CRA Wiz
Fair Lending Wiz Services:
Data Optimization

Data Quality Review

CRA/HMDA Submission Services

Fair Lending Risk Review

OneFile

7/21/2011

§1097

Omnibus amendments

Regulations required regarding unfair or deceptive practices regarding mortgage loans, including loan modification and foreclosure rescue services

Fair Lending Risk Review

Fair Lending Risk Assessment

Research / Monitoring Tools

Compliance Services

7/21/2011

§1098

RESPA amendments

Requires a single, integrated disclosure for mortgage loan transactions using understandable language to aid consumers understanding as well as booklets to help borrowers understand real estate settlement services.

This is one of two sections that deals with a combined TILA/RESPA disclosure document.  The other section that addresses this is section 1032.

ARC Logics for Financial Services, an Enterprise Risk Management Solution

Compliance Program Review

Research / Monitoring Tools

Documents

Integrated Solutions

Software Solutions

Compliance Services

7/21/2011

§1100A

Truth-in-lending (TILA)

Gives authority to prescribe rules to prevent circumvention or evasion of TILA and to facilitate compliance by motor vehicle dealers

DocPrep

7/21/2011

§ 1100E

TILA Inflation adjustments

Increases the TILA dollar amount for exempting credit transactions or leases from $25,000 to $50,000 and provides for future indexing for inflation beginning 12/31/2011

Integrated Solutions

Software Solutions

Compliance Services

7/21/2012

§ 614

Lending Limits to Insiders

Restrictions on extensions of credit to insiders implemented through Reg. O expanded to take into account credit exposures arising from a derivative transaction, a repurchase agreement, a reverse repurchase agreement, or securities lending or borrowing transaction.

ARC Logics

7/21/2012

§ 1076

Study and Regulations on Reverse Mortgages

Study to be done on need for conditions or limitations on reverse mortgages and regulations issued, if found to be necessary. Regulations would target unfair, deceptive or abusive practices.

 

1/21/2013

§ 1402

Duty of Care

Regulations required for procedures to assure and monitor compliance with Title XIV and SAFE Act- this is a very general grant of power that may result in disclosures. Originators must also be qualified and must be registered and licensed under the SAFE Act when required and must include their unique originator identifier on all loan documents.

Documents

Integrated Solutions

Software Solutions

Compliance Services

1/21/2013

§ 1403

Prohibition on Steering Incentives

Regulations required to keep mortgage originators from steering consumers to loans they can't repay or that have predatory characteristics or other abusive practices. There is also a prohibition on paying or receiving any compensation that varies based on the terms of the loan other that the amount of the principal.

FRB final regulation effective April 1, 2011.  Additional regulations still expected from the CFPB.

Wiz Sentinel

Anti-Steering Certification

Anti-Steering Disclosure

1/21/2013

§ 1405

Regulations

Regulations are authorized to prohibit or condition terms, acts or practices if they are abusive, unfair, deceptive, predatory or to prevent evasion.

 

1/21/2013

§ 1411

Ability to Repay

Documentation will be required for ability to repay the loan including taxes, insurance and assessments, including verification of income. If the creditor knows of multiple loans on the same dwelling the consumer must have the ability to repay all of those loans. A proposed regulation was published in the Federal Register on 5/11/2011.

CFPB indicates that a final regulation will be published in early 2012.

Research / Monitoring Tools

Documents

Integrated Solutions

Software Solutions

Compliance Services

1/21/2013

§ 1414

Additional Standards

This section places limits on a number of things such as prepayment penalties, financing single premium credit life insurance, mandatory arbitration clauses, and negative amortization, and requires notices at the time of loan consummation on any loss of state anti-deficiency protection laws and disclosures on policies on accepting partial payments and how they are applied.

Documents

Integrated Solutions

Software Solutions

Compliance Services

1/21/2013

§ 1418

Notice of Hybrid ARM reset

Lenders will have to provide a notice six months before the end of an introductory period of a loan that resets from fixed to variable rate, or if that reset occurs in the first six months, they have to provide it at closing. The disclosure will describe the index and how the new rate would be determined, provide a good faith estimate of the new payment, give a list of alternatives that consumers may pursue before the reset, and provide details of government agencies that might help.

Documents

Integrated Solutions

Software Solutions

Compliance Services

1/21/2013

§ 1419

Consumer Disclosures

Adds additional disclosures under the TILA including maximum initial payments, initial escrow amount, aggregate settlement charges, amount of fees and any other amounts paid to the originator, and total interest that will be paid over life of loan

Research / Monitoring Tools

Documents

Integrated Solutions

Software Solutions

Compliance Services

1/21/2013

§ 1420

Monthly statements

Establishes new requirements and a model form for monthly billing cycle statements on consumer mortgages showing amount of principal, current  interest rate, date of next reset or adjustment, amount of any prepayment fee, description of late payment fees, contact information for the institution, contact information for counseling agencies and any other information prescribed in the regulations. There is an exception to this requirement for fixed rate loans where the borrower is given a coupon book that provides substantially the same information

 

1/21/2013

§ 1431

High-Cost Mortgages

Changes triggers for HOEPA loans

Wiz Sentinel

1/21/2013

§ 1432

Amendments to Existing Requirements

Prohibits balloon payments and prepayment penalties on high-cost mortgages

Wiz Sentinel

1/21/2013

§ 1433

Additional  Requirements

Places additional requirements regarding late fees, acceleration, financing prepayment penalties, modification or deferral fees, pay-off statements, and pre-loan counseling

Research / Monitoring Tools

1/21/2013

§ 1461

Escrows

This section establishes complex rules that require escrows in certain first lien mortgages either for a minimum of five years or until certain equity levels are reached similar to what is required for PMI cancellation or until there is a default. This section also establishes new disclosure requirements for loans when escrow accounts are required which must be given al least 3 business days before the consummation of the loan that state that escrow is required, states the amount required to fund the escrow, the amount to be collected in the first year, estimated monthly amount payable, and that the consumer is responsible for payment if the escrow is terminated. Proposed rules were issued on 8/17/10.

Proposed rule published 3/2/2011 with comment period open until 5/2/2011.

Research / Monitoring Tools

Documents

Integrated Solutions

Software Solutions

Compliance Services

1/21/2013

§ 1462

Disclosures for non-escrowed loans

Requires a new disclosure when no escrow is established because of a consumer waiver. This will inform the consumer of any fees and costs associated with not having an escrow, a clear and conspicuous statement that the consumer is responsible for paying the non escrowed items, and an explanation of the consequences of failure to pay non escrowed items including the right to force place insurance.

Documents

Integrated Solutions

Software Solutions

Compliance Services

1/21/2013

§ 1463

Miscellaneous RESPA amendments

Requires new limits on and notices before force-placed insurance can be done on federally related mortgages under RESPA. The notices must remind the borrower of the insurance obligation and state that there is no evidence of insurance, explain how the borrower can demonstrate coverage and state that insurance may be obtained at the borrower's expense. Two notices must be sent and they must be at least 30 days apart. This section also requires escrow refunds within 20 business days of loan pay off.

 

1/21/2013

§ 1464

Truth in Lending Act amendments

Home loan servicers have to send an accurate payoff balance within a reasonable time not to exceed 7 business days after receipt of a written request

DocPrep

1/21/2013

§ 1465

Escrows included in Repayment Analysis

Repayment analysis is required to include escrow payments and include taxable assessment value of the property

Wiz Sentinel

Documents

Integrated Solutions

Software Solutions

Compliance Services

1/21/2013

§ 1471

Property Appraisal Requirements

Requires physical appraisal of higher risk mortgages by certified appraiser and a 2nd appraisal if the property was purchased within 180 days before that. A copy of the appraisal must be given to consumer at no cost 3 days before closing

 

1/21/2013

§ 1472

Appraisal Independence Requirements

Requires regulations to set standards for making sure appraiser is independent and not influenced. Severe civil penalties for violations Must prescribe interim final regulations no later than 90 days after the date of enactment (10/19/2010) defining with specificity acts or practices that violate appraisal independence

 

1/21/2013

§ 1474

Equal Credit Opportunity Act Amendment

Creditors are required to furnish a free copy of all appraisals and valuations on applications for loans for first liens on dwellings promptly upon completion but no later than 3 days prior to closing.

 

Regulations will apply to contracts beginning 180 days after the effective date in the regulations

§ 1028

Authority to Restrict Mandatory Pre-dispute arbitration

Bureau can issue regulations prohibiting or imposing limitations on provisions that require arbitration of future disputes

Documents

Integrated Solutions

Software Solutions

Compliance Services

Effective 7/21/2011

§1100F

Use of Consumer Reports

Institutions will have to provide the consumer's credit score on adverse action notices and risk-based pricing notices based in whole or in part on a consumer report. They will also have to provide the information now given on credit score disclosures, that is, the range of scores, Key factors, date of the score, and person creating the score.

Even though the statuory provision had an effective date of 7/21/2011, the implementing regulations, published on 7/06/2011, had an effective date of 8/15/2011.

Research / Monitoring Tools

Documents

Integrated Solutions

Software Solutions

Compliance Services