In the June 1, 2011 issue of the Federal Register, the Board of Governors of the Federal Reserve System (FRB) published amendments to Appendix A of Regulation B, which implements the Equal Credit Opportunity Act, to update the address where questions should be directed concerning creditors for which the Federal Deposit Insurance Corporation administers compliance with Regulation B.
Search Results
Read articles below for analysis and discussion of recent trends by BM&G’s industry experts.
Appraisal / Valuation Rules after Dodd-Frank
PRESENTATION TOPICSection 1472 Dodd-Frank Wall Street Reform and Consumer Protection (Section 129E of the Truth in Lending Act.)Section 226.42 Federal Reserve Board Regulation Z (effective April 1, 2011)OTHER SOURCES:Interagency Appraisal and Evaluation Guidelines (Interagency Guidelines)Fannie Mae/Freddie Mac Appraiser Independence Requirements (Announcement SEL-2010-14 Dated: OCT. 15, 2010)HUD Mortgagee Letter (2009-28 Dated: SEPT. 18, 2009)
Regulation Z Proposed Rule on Consumer’s “Ability-to-Repay” to Implement New Section 129C of TILA (76 FR 27390)
In the above-cited May 11, 2011 issue of the Federal Register, the Board of Governors of the Federal Reserve System (FRB) published proposed rules (proposed rule) to implement Sections 1411, 1412, and 1414 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). The Dodd-Frank Act creates new TILA Section 129C, which, among other things, establishes new ability-to-repay requirements and new limits on prepayment penalties.
Proposed Credit Risk Retention Rules by Federal Agencies to Implement Section 941(b) of the Dodd-Frank Act – (76 FR 24090)
In the above April 29, 2011 issue of the Federal Register, the following federal agencies (Agencies) – Office of the Comptroller of the Currency (OCC); Board of Governors of the Federal Reserve System (FRB); Federal Deposit Insurance Corporation (FDIC); Securities and Exchange Commission (SEC); Federal Housing Finance Agency (FHFA); and Department of Housing and Urban Development (HUD) – published proposed common rules (proposed rule) to implement section 941(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). The Dodd-Frank Act generally requires the securitizer of asset-backed securities (ABS) to retain not less than five percent of the credit risk of the assets collateralizing the asset-backed securities and includes an exemption from this risk retention requirement for asset-backed securities that are collateralized exclusively by residential mortgages that qualify as “qualified residential mortgages,” as such term is defined by the Agencies proposed rule.
(1) Email and Web Address Changes for Texas Department of Savings and Mortgage Lending (TDSML); (2) Disclosure Form Changes
This memorandum is to advise all clients of the following technical changes by the TDSML to the disclosures required, respectively, under §79.122 and §80.9 of Title 7 of the Texas Administrative Code. These changes are set out in the April 29, 2011 issue of the Texas Register. 1. State savings banks are required by §79.122 to place in their privacy notices to consumers a promulgated notice advising consumers how to file complains. This complaint notice contains the TDSML’s current email address: smlinfo@sml.state.tx.us. Effective May 5, 2011, that email address changes to: smlinfo@sml.texas.gov.
Truth-in-Lending Itemization of Amount Financed in a Transaction involving Consumer Paid Loan Originator Compensation
For an application received by a creditor on and after April 1, 2011, the creditor and the broker, if applicable, are required to comply with the compensation rules promulgated by the Board of Governors of the Federal Reserve System (“FRB”) in Regulation Z §226.36(d). In a transaction in which the loan originator’s compensation is paid by the consumer, under §226.36(d), clients will need to identify the transaction as consumer paid compensation.
NMLS Mortgage Call Report Training Workshops
Starting May 2, 2011, state mortgage licensees will be required to submit Mortgage Call Reports to the NMLS as required by the federal SAFE Act and the applicable state SAFE Act statutes. These workshops will provide an overview of the requirements and “how to” for submitting the Mortgage Call Report in NMLS. The NMLS placed a notice about the workshops on its Web site, which may be accessed at: http://mortgage.nationwidelicensingsystem.org/news/events/Pages/MCRWorkshop.aspx.
Regulation Z Threshold Amount Exemption Raised – Revised Section 226.3(b) of Regulation Z
Effective July 21, 2011, the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) amends the Truth in Lending Act (TILA) by increasing the threshold amount for exempt consumer credit transactions from $25,000 to $50,000. In addition, the Dodd-Frank Act provides that, on or after December 31, 2011, this threshold amount must be adjusted annually by any annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers. Accordingly, in the April 4, 2011, issue of the Federal Register (76 FR 18354) the Board of Governors of the Federal Reserve System (FRB) published a final rule (the Final Rule) making corresponding amendments to Section 226.3(b) of Regulation Z and its accompanying official staff commentary.
Federal Reserve Board Interim Final Rule Adds Appraisal Independence Requirements – New Section 226.42 of Regulation Z
In the October 28, 2010, issue of the Federal Register (75 FR 66554), as corrected in the December 23, 2010, issue of the Federal Register (75 FR 80675), the Board of Governors of the Federal Reserve System (FRB) published an interim final rule (the Interim Rule) designed to ensure that real estate appraisers use their independent professional judgment in appraising homes without influence or pressure from parties interested in the loan transaction and that the appraiser receive customary and reasonable compensation for their services. The Interim Rule implements new Section 129E of the Truth in Lending Act (TILA), which was enacted as Section 1472 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Public Law 111-203) to establish new requirements for appraisal independence for consumer loans secured by the consumer’s principal dwelling. To implement this new TILA appraisal independence requirement, the Interim Rule adds Section 226.42 to Regulation Z, which replaces Section 226.36(b) that contained similar appraisal requirements. Pursuant to the Dodd-Frank Act, supra, the issuance of this Interim Rule renders the Home Valuation Code of Conduct of no further force or effect. (But see our October 18, 2010 memorandum on the new Fannie Mae Appraiser Independence Requirements in Fannie Mae Announcement SEL-2010-14.)
Regulation Z APR Threshold for Required Escrow Account Increased for “Jumbo” Loans – New Section 226.35(b)(3)(v) effective April 1, 2011
Finally, some good news from the Federal Reserve Board (FRB). In today’s issue of the Federal Register (76 FR 11319), the FRB published a final rule establishing a higher APR threshold for “jumbo” first lien, higher-priced mortgage loans in regard to the escrow account requirements implemented by §226.35(b)(3) of Regulation Z.