Friday, September 03, 2010
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Final Rule Requiring Registration of Mortgage Loan Originators to Implement the SAFE Act - July 28, 2010 issue of the Federal Register
  Published :  07/28/2010

This memorandum is to advise you that in the above issue of the Federal Register (75 FR 44656) the following named federal agencies - Office of the Comptroller of the Currency (OCC), Board of Governors of the Federal Reserve System (FRB), Federal Deposit Insurance Corporation (FDIC), Office of Thrift Supervision (OTS), Farm Credit Administration (FCA), and National Credit Union Administration (NCUA) - each adopted a parallel final rule (collectively the “Final Rule”) to implement the federal SAFE Act.

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FHA Proposed Changes to Risk Management Practices - Reduction of Seller Concessions and New Loan-to-Value and Credit Score Requirements
  Published :  07/16/2010

In today’s Federal Register (75 FR 41217) HUD published notice that in order to enhance FHA risk management practices, FHA is proposing the following changes to its underwriting guidelines:

1. reduce “seller concessions”;
2. introduce a minimum eligibility credit score;
3. reduce the maximum LTV for low credit score borrowers; and
4. tighten underwriting standards for manually underwritten loans.

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Community Reinvestment Act Proposed Rule Change to Revise the Term “Community Development”
  Published :  06/25/2010

In today’s Federal Register, the following federal agencies - OCC, FRB, FDIC and OTS - published a proposed rule to revise the definition of “community development.” In pertinent part, the proposed revised definition includes “[l]oans, investments, and services that [s]upport, enable, or facilitate projects or activities that meet the criteria described in Section 2301(c)(3) of the Housing and Economic Recovery Act of 2008 (HERA) …  and are conducted in designated target areas identified in plans approved by the United States Department of Housing and Urban Development in accordance with the Neighborhood Stabilization Program (NSP) established by the HERA and the American Recovery and Reinvestment Act of 2009 … .”

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Community Reinvestment Act Regulations: Notice by Federal Agencies to Hold Public Hearings on Potential Regulatory Changes
  Published :  06/23/2010

In today’s Federal Register, the following federal agencies - OCC, FRB, FDIC and OTS - published notice that they will hold joint public hearings to solicit comments that can be used for future revision of the CRA regulations. These public hearing dates and locations are as follows:
 

                  1. July 19, 2010-FDIC’s L. William Seidman Center, 3501 Fairfax  Drive, Arlington, VA 22201-2305.

                  2. August 6, 2010-Federal Reserve Bank of Atlanta, 1000 Peachtree Street Northeast, Atlanta, GA 30309.

                  3. August 12, 2010-Federal Reserve Bank of Chicago, 230 South La Salle Street, Chicago, IL 60614.

                  4. August 17, 2010-Los Angeles Branch of the Federal Reserve Bank of San Francisco, 950 South Grand Avenue, Los Angeles, CA 90015.

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HUD Strikes Again! Required Use Definition: Advanced Notice of Proposed Rulemaking (ANPR) in Federal Register (75 FR 31334)
  Published :  06/03/2010

In today’s Federal Register, HUD published the above ANPR to solicit comments that can be used for future revision of the definition of “required use” contained in Regulation X (24 CFR 3500.2(b)). If you do not want the debacle the lending community experienced when HUD attempted to revise the required use definition in its November 17, 2008 final rule (HUD withdrew this revised definition by final rule published May 15, 2009), we urge you to comment on this ANPR before the September 1, 2010 due date.

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Mortgage Credit Certificate Program By Texas Department of Housing and Community Affairs
  Published :  05/28/2010

This is to advise our mortgage lending clients that the Texas Department of Housing and Community Affairs published the following notice in the May 28, 2010 issue of the Texas Register regarding its new Mortgage Credit Certificate Program to assist eligible very low, low and moderate income first-time homebuyers with the purchase of a residence located within the State of Texas. Interested lenders should contact Cathy Gutierrez at the Texas Department of Housing and Community Affairs, 221 East 11th Street, Austin, Texas 78701-2410; telephone (512) 475-0277.
 

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Finance Commission Adopts Residential Mortgage Loan Originator Regulation
  Published :  05/21/2010

Effective May 9, 2010, the Finance Commission of Texas (“Finance Commission”) adopted amendments to §§80.1 and 80.2, §§80.8 through 80.15, §§80.20 through 80.23 and new Subchapter L, Licensing, (§§80.301 through 80.307) of the Texas Residential Mortgage Loan Originator Regulations (formerly titled the “Mortgage Broker and Loan Officer Licensing Regulations”) contained in the Texas Administrative Code at 7 TAC Chapter 80. The text of these amended and new regulations (“Rules”) may be found at: http://info.sos.state.tx.us/pls/pub/readtac$ext.ViewTAC?tac_view=4&ti=7&pt=4&ch=80.

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Texas Home Equity Lending – 2010 Update
  Published :  05/19/2010

This memorandum will provide an overview of home equity lending embodied in Article XVI, Section 50, of the Texas Constitution and will also discuss some of the issues lenders face. The full text of Section 50, current to date, is attached to this memorandum (for ease of reference, the home equity and HELOC provisions are highlighted in bold typeface). All references to “sections,” “subsections,” and “parts” in this memorandum refer to the various provisions of Section 50, unless otherwise stated.
 

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Office of Consumer Credit Commissioner Residential Mortgage
  Published :  04/30/2010

Effective May 6, 2010, the Finance Commission of Texas (Finance Commission) adopts new Chapter 2 to Title 7 of the Texas Administrative Code (7 TAC Chapter 2, §§2.101 – 2.105). The purpose of new Chapter 2 is to provide for certain application procedures and fees for those individuals applying for or renewing their licenses as a residential mortgage loan originator (RMLO) with the Office of Consumer Credit Commissioner (OCCC), as required by Chapter 180 of the Texas Finance Code enacted by the 2009 session of the Texas Legislature in House Bill 10 (i.e., Texas SAFE Act). For a detailed summary of the Texas SAFE Act, see our November 13, 2009 memorandum posted on our website http://www.bmandg.com/ under “Our Clients and Friends” web page.

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FHA Reform Rules – Published in Federal Register (75 FR 23582)
  Published :  04/23/2010

 

In the April 20, 2010 issue of the Federal Register (75 FR 20718) the Federal Housing Administration (FHA) published its final rule, effective May 20, 2010, amending part 202 of FHA regulations (24 CFR Part 202) that:
 

(1) increases the net worth requirements for FHA-approved lenders;
(2) eliminates the FHA approval process for loan correspondents; and,
(3) incorporates criteria specified in the Helping Families Save Their Homes Act of 2009 (HFSH Act).
 

This memorandum attempts to redact what we consider are the more important parts of the final rule and HUD’s preamble published with the final rule in the above-cited issue of the Federal Register and does not address all aspects of the final rule or HUD’s preamble. You are advised to read the complete text of the final rule and HUD’s preamble and not to rely solely on this memorandum. The complete text of the final rule is attached to this memorandum for your information and use.

 

 

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Updated RESPA FAQs, dated April 2, 2010
  Published :  04/15/2010

On April 2, 2010, HUD released New RESPA Rule FAQs, an update to the January 28, 2010, FAQs.  The April 2, 2010, FAQs may be found, in their entirety, via the following link http://www.hud.gov/offices/hsg/ramh/res/resparulefaqs422010.pdf and some of the updates within the FAQs are briefly addressed below:
 

1. GFE, General, #33 & #34 (pgs. 11-12).  These two FAQs address preapprovals.  HUD states that a preapproval is never to be used as a substitute for a GFE, and that the RESPA rules do not address preapprovals.   HUD reiterates that once the loan originator has the information that triggers a GFE, they must still provide the GFE. A lender may never issue only a preapproval for a refinance loan; the lender must also issue a GFE.
 

2. GFE, General, #35 & #36 (pg. 12).  These two FAQs address the use of a worksheet without a GFE and in conjunction with the GFE.  They clarify that a worksheet may be used provided that the worksheet does not look like a GFE and does not lead the consumer to believe it is a GFE.  The worksheet may be used without a GFE if the consumer has not provided the information necessary to generate a GFE. The worksheet may also be used in conjunction with a GFE, but never in lieu of a GFE.
 

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Increase in Upfront Premiums for Mortgage Insurance
  Published :  04/06/2010

On January 21, 2010, FHA issued M.L. 2010-02 that announced effective for FHA loans with case numbers assigned on or after April 5, 2010, FHA will collect an upfront mortgage insurance premium (“UFMIP”) of 2.25 percent.  The full text of M.L. 2010-02, is attached to this memorandum, and is briefly summarized below:

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Mortgage Loan Officer May Not Be Exempt From Overtime Pay
  Published :  04/02/2010

On March 24, 2010, the Wage and Hour Division of the U.S Department of Labor issued Administrator’s Interpretation No. 2010-1, regarding the applicability of the administrative employee exemption of the Fair Labor Standards Act, 29 U.S.C. §213(a)(1), to mortgage loan officers.   It is the Administrator’s interpretation that employees who perform the typical job duties of a mortgage loan officer, as described in Administrator’s Interpretation No. 2010-1, do not qualify as bona fide administrative employees exempt under § 213(a)(1) of the Fair Labor Standards Act(“Act”).  Unless exempt, employees covered by the Act must receive overtime pay for hours worked over 40 in a workweek at a rate not less than one and one-half times their regular rates of pay.

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Community Reinvestment Act – Interagency Questions and Answers
  Published :  03/16/2010

The following federal agencies (collectively, the “federal agencies”) - Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, and Office of Thrift Supervision - implement the Community Reinvestment Act (CRA) through their respective CRA regulations. These CRA regulations are interpreted primarily through the Interagency Questions and Answers Regarding Community Reinvestment (“Questions and Answers”), which provide guidance for use by the federal agency personnel, financial institutions, and the public.

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Proposed Office of Consumer Credit Commissioner Residential Mortgage
  Published :  03/12/2010

 The Finance Commission of Texas (Finance Commission) proposes new Chapter 2 to Title 7 of the Texas Administrative Code (7 TAC Chapter 2, Sections 2.101 – 2.105). The text of these new regulations (“Proposed Rules”) may be found in the above cited issue of the Texas Register and, for your convenience, are reprinted in this memorandum. You are advised to read these Proposed Rules and not rely on the summary contained in this memorandum.

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