Highlights of Final Rules on Loan Originator Compensation and Steering
The final rules protect mortgage borrowers from unfair, abusive, or deceptive lending practices that can arise from loan originator compensation practices. The new rules apply to all persons who originate loans, including mortgage brokers and the companies that employ them, as well as mortgage loan officers employed by depository institutions and other lenders. The final rules, which apply to closed-end loans secured by a consumer’s dwelling, will:
Prohibit payments to the loan originator that are based on the loan’s interest rate or other terms. Compensation that is based on a fixed percentage of the loan amount is permitted.
Prohibit a mortgage broker or loan officer from receiving payments directly from a consumer while also receiving compensation from the creditor or another person.
Prohibit a mortgage broker or loan officer from “steering” a consumer to a lender offering less favorable terms in order to increase the broker’s or loan officer’s compensation.
Provide a safe harbor to facilitate compliance with the anti-steering rule. The safe harbor is met if:
o The consumer is presented with loan offers for each type of
transaction in which the consumer expresses an interest (that is,
a fixed rate loan,adjustable rate loan, or a reverse mortgage); and
o The loan options presented to the consumer include the following:
(1) the lowest interest rate for which the consumer qualifies;
(2) the lowest points and origination fees, and
(3) the lowest rate for which the consumer qualifies for a loan with
no risky features, such as a prepayment penalty, negative
amortization, or a balloon payment in the first seven years.
The final rules are effective April 1, 2011, to provide lenders and originators time to develop new business models, implement necessary changes to their systems, and train personnel.
The Dodd-Frank Wall Street Reform and Consumer Protection Act also restricts practices concerning loan originator compensation. The Reform Act includes provisions that are similar to the Board’s final rules but also addresses other practices not covered by the final rules. The
Board plans to implement the Reform Act provisions in a future rulemaking with opportunity for public comment.
Keep reading .... and Keep the faith !!
Wednesday, August 18, 2010
Friday, August 13, 2010
Four Proposals for Reforming Fannie and Freddie
The government is wrestling with what to do about Fannie Mae and Freddie Mac, which have needed a combined $148 billion since the government bailed them out two years ago.
There are many ways to restructure the system. Here are four that have the most support:
1. Fully private system. Eliminate Fannie and Freddie and let private lenders take over. The problem is that the market for mortgage securities issued without government backing is small – perhaps, nonexistent.
2. Semi-private system. Dissolve Fannie and Freddie and turn their function over to private companies that would pay for the right to issue government-backed mortgage securities. Small banks don’t like this plan because it would inevitably increase the role of the largest banks.
3. Hybrid system. Fannie and Freddie would compete against other companies that would also issue government-backed mortgage securities.
4. Government-run system. Fannie and Freddie would become part of the government. This is unpopular because it would expand the ballooning federal debt.
Source: Associated Press, Alan Zibel (08/09/2010)
Keep the faith..........
There are many ways to restructure the system. Here are four that have the most support:
1. Fully private system. Eliminate Fannie and Freddie and let private lenders take over. The problem is that the market for mortgage securities issued without government backing is small – perhaps, nonexistent.
2. Semi-private system. Dissolve Fannie and Freddie and turn their function over to private companies that would pay for the right to issue government-backed mortgage securities. Small banks don’t like this plan because it would inevitably increase the role of the largest banks.
3. Hybrid system. Fannie and Freddie would compete against other companies that would also issue government-backed mortgage securities.
4. Government-run system. Fannie and Freddie would become part of the government. This is unpopular because it would expand the ballooning federal debt.
Source: Associated Press, Alan Zibel (08/09/2010)
Keep the faith..........
Thursday, August 12, 2010
42,000 of California’s jobless will get help with mortgages
The U.S. Treasury Dept. announced yesterday it is providing additional funding to a California program to help homeowners struggling to make their mortgage payments due to unemployment. The program, administered through the California Housing Finance Agency (CalHFA) will assist struggling borrowers make up to six months of mortgage payments. Lenders will be asked to match the government contribution.
MAKING SENSE OF THE STORY FOR CONSUMERS
•The program aims to help 19,000 unemployed borrowers in California between its November launch and next July. An additional 23,000 borrowers will receive help over the next two years, according to CalHFA estimates.
•To qualify for the program, borrowers must be unemployed and eligible for unemployment benefits, and live in the home tied to the mortgage. Borrowers must be fewer than 90 days behind on mortgage payments and meet low- and moderate-income guidelines. Income requirements can be found at http://keepyourhomecalifornia.com/income.pdf.
•CalHFA is focusing on providing aid to unemployed borrowers struggling with purchase loans, excluding refinanced loans. According to CalHFA officials, it is too difficult to decide who “cashed out for a good reason and who didn’t.”
•More information about the CalHFA program, including eligibility, program summary, income requirements, and frequently asked questions, can be found at http://keepyourhomecalifornia.com.
To read the full story, please click or cut/paste link
http://www.sacbee.com/2010/08/12/2953229/42000-of-californias-jobless-will.html
MAKING SENSE OF THE STORY FOR CONSUMERS
•The program aims to help 19,000 unemployed borrowers in California between its November launch and next July. An additional 23,000 borrowers will receive help over the next two years, according to CalHFA estimates.
•To qualify for the program, borrowers must be unemployed and eligible for unemployment benefits, and live in the home tied to the mortgage. Borrowers must be fewer than 90 days behind on mortgage payments and meet low- and moderate-income guidelines. Income requirements can be found at http://keepyourhomecalifornia.com/income.pdf.
•CalHFA is focusing on providing aid to unemployed borrowers struggling with purchase loans, excluding refinanced loans. According to CalHFA officials, it is too difficult to decide who “cashed out for a good reason and who didn’t.”
•More information about the CalHFA program, including eligibility, program summary, income requirements, and frequently asked questions, can be found at http://keepyourhomecalifornia.com.
To read the full story, please click or cut/paste link
http://www.sacbee.com/2010/08/12/2953229/42000-of-californias-jobless-will.html
State Deadline for Tax Credit Applications ending 8/15/2010
2010 Tax Credit for New Home / First-Time Buyer
Important Update(08/06/10): FTB to accept First-Time Buyer applications through 8/15/10.
"As shown in the numbers below, we have received First-Time Buyer applications totaling more than $100 million. We announced in June that we would accept at least 28,000 applications since many we had received were duplicate, revised, or invalid applications. Since that time, we have received more and more duplicate, late, and invalid applications. So that we do not risk cutting off the program too soon, we will accept First-Time Buyer applications until midnight on Sunday, August 15, 2010. This will insure that we have more than enough First-Time Buyer applications to allocate the full $100 million. These additional applications must be timely, meet all requirements, and will be subject to the availability of remaining credits. We will only issue approved certificates of allocation until the $100 million is exhausted. Applications received more than 14 days after the close of escrow will be denied. We will continue to accept New Home reservation requests and applications." (Updated 08/06/10)
"We have not processed any applications yet, but our computer system is now completed, and we are ready to begin processing both New Home and First-Time Buyer applications. We will provide weekly updates on the number of certificates that have been mailed and the amount of credits that have been allocated starting August 19." (Updated 08/06/10)
Full story - http://www.ftb.ca.gov/individuals/new_home_credit.shtml (If you are looking for more information regarding the 2009 New Home Credit, see FTB Publication 3528, New Home Credit, or search using the “Forms & Publications” available at website.)
Important Update(08/06/10): FTB to accept First-Time Buyer applications through 8/15/10.
"As shown in the numbers below, we have received First-Time Buyer applications totaling more than $100 million. We announced in June that we would accept at least 28,000 applications since many we had received were duplicate, revised, or invalid applications. Since that time, we have received more and more duplicate, late, and invalid applications. So that we do not risk cutting off the program too soon, we will accept First-Time Buyer applications until midnight on Sunday, August 15, 2010. This will insure that we have more than enough First-Time Buyer applications to allocate the full $100 million. These additional applications must be timely, meet all requirements, and will be subject to the availability of remaining credits. We will only issue approved certificates of allocation until the $100 million is exhausted. Applications received more than 14 days after the close of escrow will be denied. We will continue to accept New Home reservation requests and applications." (Updated 08/06/10)
"We have not processed any applications yet, but our computer system is now completed, and we are ready to begin processing both New Home and First-Time Buyer applications. We will provide weekly updates on the number of certificates that have been mailed and the amount of credits that have been allocated starting August 19." (Updated 08/06/10)
Full story - http://www.ftb.ca.gov/individuals/new_home_credit.shtml (If you are looking for more information regarding the 2009 New Home Credit, see FTB Publication 3528, New Home Credit, or search using the “Forms & Publications” available at website.)
Tuesday, August 10, 2010
"Puttin' on the Ritz" or How can I showcase my home for sale
If you want to market your property properly, you must stick to the basics. The goal is to sell it quickly for the highest price possible while investing as little as possible in renovations. You can greatly increase your home's appeal by focusing on what prospective buyers can see on their first visit.
Tip #1: Refresh the exterior
First impressions count when it comes to selling a home. Most buyers won’t even leave their car if they don’t find the exterior appealing. The best ways to improve your home’s exterior include:
-Repairing and/or replacing trims, shutters, gutters, shingles, mailboxes, window screens, walkways and the driveway.
-Painting siding, trim and shutters and lamp and mailbox posts.
-Pressure washing vinyl siding, roofs, walkways and the driveway.
-Washing windows.
Tip #2: Spruce up the lawn and landscape
Home buyers associate the condition of your lawn and landscaping with the condition of your home’s interior. By improving the outside, you affect buyers’ impression of the entire property. The best ways to enhance the yard include:
-Mowing and edging the lawn.
-Seeding, fertilizing and weeding the lawn.
-Keeping up with regular lawn maintenance by frequent watering.
-Trimming and/or removing overgrown trees, shrubs and hedges.
-Weeding and mulching plant beds.
-Planting colorful seasonal flowers in existing plant beds.
-Removing trash, especially along fences and underneath hedges.
-Sweeping and weeding the street curb along your property.
Tip #3: Create an inviting entrance
The front door to your home should invite buyers to enter. The best ways to improve your entry include:
-Painting the front door in a glossy, cheerful color that complements the exterior.
-Cleaning, polishing and/or replacing the door knocker, locks and handles.
-Repairing and/or replacing the screen door, the doorbell, porch lights and house numbers.
-Placing a new welcome mat and a group of seasonal potted plants and flowers by the entry.
Tip #4: Reduce clutter and furniture
A buyer cannot envision living in your home without seeing it. A home filled with clutter or even too much furniture distracts buyers from seeing how they can utilize the space your home offers. If you have limited storage space, you may want to consider renting a temporary storage unit to place items you wish to keep. The best ways to declutter your home include:
-Holding a garage sale to prepare for your move, getting rid of unnecessary items.
-Removing clutter such as books, magazines, toys, tools, supplies and unused items from counter tops, open shelves, storage closets, the garage and basements.
-Storing out-of-season clothing and shoes out of sight to make bedroom closets seem roomier.
-Removing any visibly damaged furniture.
-Organizing bookshelves, closets, cabinets and pantries. Buyers will inspect everything.
-Putting away your personal photographs, unless they showcase the home. Let buyers see themselves in your home.
-De-personalize rooms as much as you can.
Tip #5: Clean, clean, clean
The cleanliness of your home also influences a buyer's perception of its condition. The appearance of the kitchen and bathrooms will play a considerable role in a buyer's decision process, so pay particular attention to these areas. The best ways to improve these areas include:
-Cleaning windows, fixtures, hardware, ceiling fans, vent covers and appliances.
-Cleaning carpets, area rugs and draperies.
-Cleaning inside the refrigerator, the stove and all cabinets.
-Removing stains from carpets, floors, counters, sinks, baths, tile, walls and grout.
-Eliminating house odors, especially if you have pets.
-Considering air fresheners or potpourri.
Tip #6: Make minor repairs
The small stuff does count, especially with first-time home buyers. Without dismissing the importance of repairing major items such as a leaky roof or plumbing, you do not need to spend money on replacing these items. Instead, focus on the minor repairs that will make your home visually appealing. The best ways to improve your home include:
-Repairing ceilings and wall cracks.
-Repairing faucets, banisters, handrails, cabinets, drawers, doors, floors and tile.
-Caulking and grouting tubs, showers, sinks and tile.
-Adding fresh paint to ceilings, walls, trim, doors and cabinets.
-Tightening door handles, drawer pulls, light switches and electrical plates.
-Lubricating door hinges and locks.
Tip #7: Showcase the kitchen
The heart of any home is the kitchen. If you are going to spend any money on renovations, this is the one area where you will see the greatest return. Even with a modest budget, focusing on a few key areas can make a great difference in getting the asking price for your property. The best ways to showcase the kitchen include:
-Replacing cabinet doors and hardware.
-Installing under-cabinet lighting.
-Replacing light fixtures.
-Replacing outdated shelving with pantry and cabinet organizers to maximize space.
-Baking cookies or cupcakes for a showing, to create a homey smell.
Tip #8: Stage furniture
Furniture placement can enhance the space of your home while giving buyers an idea of how to best utilize the space with their own belongings. Take some time to rethink how different areas in your house could be used. Some ideas to think about include:
-Moving couches and chairs away from walls in your sitting and family rooms to create cozy conversational groups.
-Creating a reading corner in the master bedroom.
-Clearing an empty room to set up a reading space.
-Turning an awkward space into a home office.
-Setting the dining room table with your best china.
-Set wine glasses in front of the fireplace or next to a Jacuzzi tub.
Tip #9: Light up the house
Create a sense of openness and cheerfulness in your home through its lighting. To improve the lighting try:
-Opening shades and drapes to let the sunshine warm and brighten rooms.
-Installing brighter light bulbs in rooms that tend to be dark.
-Adding additional lamps for ambient lighting.
-Turning on all the lights for a showing.
Tip #10: Add fresh touches
You can easily add color and style to your home by adding fresh touches throughout. Some ideas to consider include:
-Placing fresh floral arrangements in the entry and master bedroom.
-Placing bowls of bright-colored fruit in the family room and the kitchen.
-Filling an empty corner with a potted leafy plant.
-Setting new hand soap in the bathrooms.
-Displaying fresh towels near sinks.
These tips were provided by Lowe's through Rismedia August 10, 2010
Tip #1: Refresh the exterior
First impressions count when it comes to selling a home. Most buyers won’t even leave their car if they don’t find the exterior appealing. The best ways to improve your home’s exterior include:
-Repairing and/or replacing trims, shutters, gutters, shingles, mailboxes, window screens, walkways and the driveway.
-Painting siding, trim and shutters and lamp and mailbox posts.
-Pressure washing vinyl siding, roofs, walkways and the driveway.
-Washing windows.
Tip #2: Spruce up the lawn and landscape
Home buyers associate the condition of your lawn and landscaping with the condition of your home’s interior. By improving the outside, you affect buyers’ impression of the entire property. The best ways to enhance the yard include:
-Mowing and edging the lawn.
-Seeding, fertilizing and weeding the lawn.
-Keeping up with regular lawn maintenance by frequent watering.
-Trimming and/or removing overgrown trees, shrubs and hedges.
-Weeding and mulching plant beds.
-Planting colorful seasonal flowers in existing plant beds.
-Removing trash, especially along fences and underneath hedges.
-Sweeping and weeding the street curb along your property.
Tip #3: Create an inviting entrance
The front door to your home should invite buyers to enter. The best ways to improve your entry include:
-Painting the front door in a glossy, cheerful color that complements the exterior.
-Cleaning, polishing and/or replacing the door knocker, locks and handles.
-Repairing and/or replacing the screen door, the doorbell, porch lights and house numbers.
-Placing a new welcome mat and a group of seasonal potted plants and flowers by the entry.
Tip #4: Reduce clutter and furniture
A buyer cannot envision living in your home without seeing it. A home filled with clutter or even too much furniture distracts buyers from seeing how they can utilize the space your home offers. If you have limited storage space, you may want to consider renting a temporary storage unit to place items you wish to keep. The best ways to declutter your home include:
-Holding a garage sale to prepare for your move, getting rid of unnecessary items.
-Removing clutter such as books, magazines, toys, tools, supplies and unused items from counter tops, open shelves, storage closets, the garage and basements.
-Storing out-of-season clothing and shoes out of sight to make bedroom closets seem roomier.
-Removing any visibly damaged furniture.
-Organizing bookshelves, closets, cabinets and pantries. Buyers will inspect everything.
-Putting away your personal photographs, unless they showcase the home. Let buyers see themselves in your home.
-De-personalize rooms as much as you can.
Tip #5: Clean, clean, clean
The cleanliness of your home also influences a buyer's perception of its condition. The appearance of the kitchen and bathrooms will play a considerable role in a buyer's decision process, so pay particular attention to these areas. The best ways to improve these areas include:
-Cleaning windows, fixtures, hardware, ceiling fans, vent covers and appliances.
-Cleaning carpets, area rugs and draperies.
-Cleaning inside the refrigerator, the stove and all cabinets.
-Removing stains from carpets, floors, counters, sinks, baths, tile, walls and grout.
-Eliminating house odors, especially if you have pets.
-Considering air fresheners or potpourri.
Tip #6: Make minor repairs
The small stuff does count, especially with first-time home buyers. Without dismissing the importance of repairing major items such as a leaky roof or plumbing, you do not need to spend money on replacing these items. Instead, focus on the minor repairs that will make your home visually appealing. The best ways to improve your home include:
-Repairing ceilings and wall cracks.
-Repairing faucets, banisters, handrails, cabinets, drawers, doors, floors and tile.
-Caulking and grouting tubs, showers, sinks and tile.
-Adding fresh paint to ceilings, walls, trim, doors and cabinets.
-Tightening door handles, drawer pulls, light switches and electrical plates.
-Lubricating door hinges and locks.
Tip #7: Showcase the kitchen
The heart of any home is the kitchen. If you are going to spend any money on renovations, this is the one area where you will see the greatest return. Even with a modest budget, focusing on a few key areas can make a great difference in getting the asking price for your property. The best ways to showcase the kitchen include:
-Replacing cabinet doors and hardware.
-Installing under-cabinet lighting.
-Replacing light fixtures.
-Replacing outdated shelving with pantry and cabinet organizers to maximize space.
-Baking cookies or cupcakes for a showing, to create a homey smell.
Tip #8: Stage furniture
Furniture placement can enhance the space of your home while giving buyers an idea of how to best utilize the space with their own belongings. Take some time to rethink how different areas in your house could be used. Some ideas to think about include:
-Moving couches and chairs away from walls in your sitting and family rooms to create cozy conversational groups.
-Creating a reading corner in the master bedroom.
-Clearing an empty room to set up a reading space.
-Turning an awkward space into a home office.
-Setting the dining room table with your best china.
-Set wine glasses in front of the fireplace or next to a Jacuzzi tub.
Tip #9: Light up the house
Create a sense of openness and cheerfulness in your home through its lighting. To improve the lighting try:
-Opening shades and drapes to let the sunshine warm and brighten rooms.
-Installing brighter light bulbs in rooms that tend to be dark.
-Adding additional lamps for ambient lighting.
-Turning on all the lights for a showing.
Tip #10: Add fresh touches
You can easily add color and style to your home by adding fresh touches throughout. Some ideas to consider include:
-Placing fresh floral arrangements in the entry and master bedroom.
-Placing bowls of bright-colored fruit in the family room and the kitchen.
-Filling an empty corner with a potted leafy plant.
-Setting new hand soap in the bathrooms.
-Displaying fresh towels near sinks.
These tips were provided by Lowe's through Rismedia August 10, 2010
Monday, May 3, 2010
Mortgage Fraud - Let's be careful out there
Even in this day and age, you too can become a victim. There are many, many scammers out there trying to steal your property and/or equity. Don't be fooled! Arm yourself with the best information available. Remember that the one with the most information normally wins..........Click the link for the full story
http://money.cnn.com/2010/04/26/real_estate/mortgage_fraud_rose/
http://money.cnn.com/2010/04/26/real_estate/mortgage_fraud_rose/
Thursday, February 4, 2010
They're changing the rules on Loan Modifications
The U.S. Dept. of the Treasury and the Dept. of Housing and Urban Development (HUD) recently announced changes to its Home Affordable Modification Program (HAMP). The changes, designed to help improve the conversion from trial loan modifications to permanent modifications, take effect June 1. Mortgage servicers may elect to implement the changes sooner.
•Under previous guidelines, homeowners were not required to document their incomes prior to receiving a trial mortgage modification. The trial modifications typically lasted three months, during which time the servicer was supposed to collect documents to verify the homeowner’s income. If the borrower met the monthly obligations, and submitted the required paperwork, the modification was supposed to be made permanent. However, many homeowners failed to provide the necessary paperwork, or the loan servicer lost the paperwork, resulting in just 66,465 permanent modifications out of the nearly 1.2 million trial modifications.
•The updated process requires that servicers collect three documents prior to granting a trial mortgage modification: A formal application, including a description of the hardship created by the mortgage; proof of income, such as two recent pay stubs or the most-recent profit and loss statement for self-employed borrowers; and a form authorizing the Internal Revenue Service to release tax data to the servicer.
•If the borrower meets the modified payment requirements for three months, the modification automatically will be made permanent. The Treasury Dept. also said it will allow servicers some discretion in making loan modifications permanent only if minor paperwork is missing. This discretion will help address a large backlog of incomplete modifications.
•Under the plan, servicers also will be required to respond within 10 days to an initial request for a modification. Once documents are provided, the servicer will have one month to let borrowers know whether they qualify for a trial modification.
•Servicers also must calculate whether the lender or current owner of the loan will benefit from a mortgage modification, or if foreclosing on the property is in the loan owner’s best interest. If the loan owner will benefit from a modification, the servicer is required to grant the modification. Requiring borrowers to provide financial documents upfront will enable servicers to decide if a modification or foreclosure is the best option.
Questions about this or any other article, please email me Roger@RogerASullivan.com
Keep the faith!
Full story was in the L. A. Times
•Under previous guidelines, homeowners were not required to document their incomes prior to receiving a trial mortgage modification. The trial modifications typically lasted three months, during which time the servicer was supposed to collect documents to verify the homeowner’s income. If the borrower met the monthly obligations, and submitted the required paperwork, the modification was supposed to be made permanent. However, many homeowners failed to provide the necessary paperwork, or the loan servicer lost the paperwork, resulting in just 66,465 permanent modifications out of the nearly 1.2 million trial modifications.
•The updated process requires that servicers collect three documents prior to granting a trial mortgage modification: A formal application, including a description of the hardship created by the mortgage; proof of income, such as two recent pay stubs or the most-recent profit and loss statement for self-employed borrowers; and a form authorizing the Internal Revenue Service to release tax data to the servicer.
•If the borrower meets the modified payment requirements for three months, the modification automatically will be made permanent. The Treasury Dept. also said it will allow servicers some discretion in making loan modifications permanent only if minor paperwork is missing. This discretion will help address a large backlog of incomplete modifications.
•Under the plan, servicers also will be required to respond within 10 days to an initial request for a modification. Once documents are provided, the servicer will have one month to let borrowers know whether they qualify for a trial modification.
•Servicers also must calculate whether the lender or current owner of the loan will benefit from a mortgage modification, or if foreclosing on the property is in the loan owner’s best interest. If the loan owner will benefit from a modification, the servicer is required to grant the modification. Requiring borrowers to provide financial documents upfront will enable servicers to decide if a modification or foreclosure is the best option.
Questions about this or any other article, please email me Roger@RogerASullivan.com
Keep the faith!
Full story was in the L. A. Times
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