On April 5, 2012, the Federal Reserve Board (“FRB”) released a policy statement regarding the rental of residential other real estate owned (“OREO”) properties by financial entities for which the FRB is the primary federal supervisor, including state member banks, bank holding companies, non-bank subsidiaries of bank holding companies, savings and loan holding companies, non-thrift subsidiaries of savings and loan holding companies, and U.S. branches and agencies of foreign banking organizations, (collectively “banking organizations”).
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Read articles below for analysis and discussion of recent trends by BM&G’s industry experts.
FHA Increases Annual and Upfront Mortgage Insurance Premiums – Mortgagee Letter 12-4
In Mortgagee Letter 12-4 (ML 12-4) dated March 6, 2012, the Federal Housing Administration (FHA) announced a new premium structure for FHA-insured single-family forward mortgages. FHA will increase its annual mortgage insurance premium (Annual MIP) by 0.10 percent for loans under $625,500 and by 0.35 percent for loans above $625,500. Upfront premiums (UFMIP) will also increase by 0.75 percent.
FHA Proposes to Reduce Seller Concessions on FHA Insured Loans – Request for Comments
In the February 23, 2012, issue of the Federal Register (77 FR 10695), the Federal Housing Administration (FHA) published a request for comments on its revised proposal to reduce the amount of closing costs a seller (or other interested third parties) may pay on behalf of a homebuyer purchasing a home with an FHA-insured mortgage for the purposes of calculating the maximum mortgage amount. Comments are due on or before March 26, 2012. All comment submissions must refer to the Docket Number FR-5572-N-01 and the title “Federal Housing Administration (FHA) Risk Management Initiatives: Revised Seller Concessions,” and be submitted through one of the following methods: 1. Submission of Comments by Mail. Comments may be submitted by mail to the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street SW., Room 10276, Washington, DC 20410-0500. 2. Electronic Submission of Comments. Interested persons may submit comments electronically through the Federal eRulemaking Portal at www.regulations.gov. Commenters should follow the instructions provided on that site to submit comments electronically.
Financial Crimes Enforcement Network (“FinCEN”) Issues Final Rule to Establish Anti-Money Laundering Program and Suspicious Activity Report Filing Req
In the February 14, 2012, issue of the Federal Register (77 FR 30), FinCEN, a bureau of the Department of the Treasury, issued a Final Rule defining non-bank residential mortgage lenders and originators as a loan or finance company for the purpose of requiring them to establish anti-money laundering programs and report suspicious activities under the Bank Secrecy Act (“BSA”). The following summary of the Final Rule is taken from FinCEN’s preamble statements published with the Final Rule in the above-cited issue of the Federal Register.
Home Mortgage Disclosure Act Asset-Size Exemption Threshold Increased – Regulation C, Supplement I, Paragraph 1003.2-2
In today’s issue of the Federal Register (Vol. 77, No. 31) the Bureau of Consumer Financial Protection published a final rule amending the official staff commentary in Supplement I to Regulation C (12 CFR part 1003, formerly part 203), which implements the Home Mortgage Disclosure Act, to reflect a change in the asset-size exemption threshold for depository institutions. The exemption threshold has been adjusted to increase to $41 million from $40 million. The adjustment is based on the 3.43 percent increase in the average of the CPI-W (i.e., the Consumer Price Index for Urban Wage Earners and Clerical Workers) for the twelve-month period ending in November 2011. Therefore, depository institutions with assets of $41 million or less as of December 31, 2011 are exempt from collecting data in 2012.
Consumer Financial Protection Bureau Issues Amended Regulation E – Electronic Funds Transfer
In today’s issue of the Federal Register (Vol. 77, No. 25) the Bureau of Consumer Financial Protection (CFPB) published its final rule amending Regulation E, which implements the Electronic Fund Transfer Act, and the official interpretation to Regulation E, which interprets the regulation’s requirements. The final rule provides new protections, including disclosures and error resolution and cancellation rights, to consumers who send remittance transfers to other consumers or businesses in a foreign country. The amendments implement statutory requirements set forth in the Dodd-Frank Wall Street Reform and Consumer Protection Act. The final rule is effective February 7, 2013.
Consumer Financial Protection Bureau Issues Mortgage Origination Examination Procedures for Nonbank Mortgage Lenders and Brokers
The Consumer Financial Protection Bureau (CFPB) recently published its Mortgage Origination Examination Procedures, which it calls a key initial step in implementing its Nonbank Supervision program. These Procedures are a field guide for CFPB examiners looking at mortgage originators in both the bank and nonbank sectors of the industry.
Federal Agencies Issue Guidance on Junior Lien Loan Loss Allowances – January 31, 2012
The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency (collectively the “agencies”) issued the attached supervisory guidance on allowance for loan and lease losses (ALLL) estimation practices associated with loans and lines of credit secured by junior liens on one- to four-family residential properties.
New Payoff Statement Rules Adopted by Texas Finance Commission
In the December 30, 2011 issue of the Texas Register (Vol. 36, No. 52) the Finance Commission of Texas (“Commission”) adopts the following Payoff Statement Rules (new 7 TAC Chapter 155) pursuant to the requirements of Section 343.106, Texas Finance Code, enacted by House Bill 558 in the 2011 regular session of the Texas Legislature (see our prior memorandums on House Bill 558 and the Commission’s proposed payoff statement rules dated August 15, 2011, and November 4, 2011, respectively). The Rules are effective January 8, 2012, except as noted on page 2 hereof:
Bureau of Consumer Financial Protection Issues New Regulations
In our December 16, 2011, memorandum we advised you that the Bureau of Consumer Financial Protection (CFPB) had begun the process of republishing the regulations implementing the consumer financial protection laws for which Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) had transferred rulemaking authority to the CFPB from seven Federal agencies (i.e., FRB, FDIC, FTC, NCUA, OCC, OTS, and HUD) as of July 21, 2011. The CFPB is continuing this process of republishing the regulations implementing those laws by publishing in the Federal Register (Vol. 76, Issues 243, 244, 245, 246, 248 and 250) the following additional interim final regulations, effective December 30, 2011: