ABA Banking Journal - March 2010 - (Page 30)
Snowed under by mortgage compliance? More's coming
Where we stand and where we’re going in mortgage loan compliance
n the mortgage loan compliance world, 2009 was a wild ride. There were many new things to learn and many old ways to unlearn. And, we’re not done yet. Mortgage lenders need to get used to seeing change for some time to come. In 2009, at the federal level alone, bankers experienced: • RESPA shifts. Technical amendments to the Real Estate Settlement Procedures Act and a new option to average settlement costs disclosed on the HUD-1 and HUD-1A, effective Jan. 1, 2009. • TiLA Shifts. Changes to the Truth in Lending Act, provided by the passage of the Mortgage Disclosure Improvement Act (MDIA), that impose new restrictions and disclosures on residential mortgage loans, that became effective on July 30, 2009, such as: • Prohibition against imposing a fee (except for obtaining a credit report) before the consumer receives an early TIL disclosure • New seven-business-day waiting period between early TIL disclosures and loan closing By Nancy Derr-Castiglione, ABA Banking Journal contributing editor, and co-author of the www.ababj.com blog, “Lucy and Nancy’s Common Sense Compliance.”
30 MARCH 2010/ABA BANKING JOURNAL
Looking back to look ahead
• Expansion of coverage of early TIL disclosure requirement to include consumer residential mortgages secured by vacation homes • Advertising rules. New Regulation Z rules relating to advertising of consumer loans secured by a dwelling, effective Oct. 1, 2009. • Mortgage transfer notices. New borrower notice for sales or transfers of mortgage loans required under the Helping Families Save their Homes Act, effective upon enactment on May 20, 2009, and the subject of amendments to Reg Z issued by the Federal Reserve Board in November 2009. • High-cost mortgage shifts. Changes to Reg Z relating to “higher-priced mortgage loans,” including additional disclosures and consumer protections to prevent unfair and deceptive practices, effective Oct. 1, 2009. • Yield-spread shift. Changes to the Regulation C/Home Mortgage Disclosure Act rate spread calculation for reporting higher-priced mortgages, effective on Oct. 1, 2009. At the state level, the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act) continued to take shape, as state legislatures passed and implemented licensing laws for originators.
Getting ready for new waves
But everything I’ve just told you, under current conditions,
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