In a final rule published in the May 19, 2009 issue of the Federal Register (the “May 2009 final rule”), the Federal Reserve Board (“Board”) amends the early disclosure requirements of Section 226.19(a) of Regulation Z to require: (1) early disclosures for all closed-end, dwelling-secured loans subject to Regulation Z and Regulation X (i.e., RESPA loans); and, (2) additional seven-business-day and three-business-day early disclosure requirements for these loans in addition to the existing disclosure requirement of Section 226.19(a)(1) requiring initial disclosures within three business days of loan application. The May 2009 final rule revises the Board’s July 30, 2008 final rule (“July 2008 final rule”) that also amended the early disclosure requirements of §226.19(a)(1).
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Read articles below for analysis and discussion of recent trends by BM&G’s industry experts.
RESPA Final Rule: New GFE & HUD-1/1A
On November 17, 2008, the Department of Housing and Urban Development (“HUD”) published in the Federal Register (pages 68204 – 68288) its final rule (“final rule”) amending Regulation X. The final rule has two effective dates. Certain sections of the final rule are effective January 16, 2009 (and were the subject of our November 26, 2008 memorandum), and other sections of the final rule are effective January 1, 2010. Except for the brief discussion of HUD’s recent withdrawal of the final rule’s revised definition of “required use,” this memorandum will address those final rule changes that are effective January 1, 2010.
Texas Home Equity Lending – 2009 Update
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 in this memorandum to “sections”, “subsections”, and “parts” refer to the various provisions of Section 50, unless otherwise stated.
Regulation Z Amendments – Sections 226.32 and 226.34 and new Section 226.35 (HOEPA Loans and Higher-Priced Mortgage Loans)
On July 30, 2008, the Board of Governors of the Federal Reserve System (“Board”) published in the Federal Register (pages 44522 – 44614) its final rule (the “final rule”) amending Regulation Z and its Official Staff Interpretations in Supplement I to Regulation Z (“Interpretations”). This memorandum will address only that part of the final rule that amends Sections 226.32(d)(7), 226.34(a)(4), and adds new Section 226.35, which relate to HOEPA loans and higher-priced mortgage loans. These amendments become effective October 1, 2009, except for the property tax and insurance escrow requirement of Section 226.35(b)(3) (see page 16 for an explanation).
Regulation Z Amendments– New Section 226.36 (Primary Dwelling Loans) effective October 1, 2009
On July 30, 2008, the Board of Governors of the Federal Reserve System (“Board”) published in the Federal Register (pages 44522 – 44614) its final rule (the “final rule”) amending Regulation Z and its Official Staff Interpretations. This memorandum will address only that section of the final rule that adds new Section 226.36 to provide new protections for all closed-end loans secured by a consumer’s principal dwelling. Section 226.36 is effective on October 1, 2009.
Regulation Z Amendments to Advertising (Sections 226.16 and 226.24)
On July 30, 2008, the Board of Governors of the Federal Reserve System (“Board”) published in the Federal Register (pages 44522 – 44614) its final rule (the “final rule”) amending Regulation Z and its Official Staff Interpretations. This memorandum will address only those sections of the final rule that amend the advertising requirements of Regulation Z set out in Sections 226.16 (open-end home equity plans) and 226.24 (closed-end consumer credit transactions). These advertising amendments will impact the way creditors advertise open-end home equity plans and closed-end consumer credit transactions for advertisements occurring on or after October 1, 2009.
Mortgage Credit Certificate Program
In the November 28, 2008 issue of the Texas Register (Volume 33, Number 48), the Texas Department of Housing and Community Affairs published notice of its Mortgage Credit Certificate Program. For those clients who qualify and are interested in participating in this program, the Notice published in the Texas Register is reprinted below.
RESPA: Final Rule amends Regulation X effective January 16, 2009
The Department of Housing and Urban Development (“HUD”) has published its final rule amending Regulation X (Federal Register, November 17, 2008 issue, Pages 68204 – 68288). The final rule has two effective dates. Certain sections of the final rule are effective January 16, 2009, and other sections of the final rule are effective January 1, 2010. This memorandum will address those sections of the final rule that are effective January 16, 2009. A subsequent memorandum will address those sections of the final rule that become effective January 1, 2010.
RESPA: Final Rule amends Regulation X (Federal Register, November 17, 2008, Pages 68204-68288)
On November 17, 2008, the Department of Housing and Urban Development (“HUD”) published its final rule amending Regulation X and 24 CFR §203.27 [Single Family Mortgage Insurance]. The final rule has two effective dates. Certain sections of the final rule are effective January 16, 2009, and we will be issuing a memorandum on those sections in the near future. Other sections of the final rule are effective on January 1, 2010, and we will be issuing a second memorandum on those sections at a later date. The purpose of this memorandum is simply to notify you of HUD’s publication of the final rule and to provide you with the web pages from which you may download a copy in either hypertext markup language (HTML) or portable document format (PDF).
Mortgage Broker and Loan Officer Rules
The Finance Commission of Texas (the “Commission”) has adopted amendments to §80.2, concerning definitions; §80.3, concerning licensing – general; §80.5, concerning renewals; §80.6, concerning sponsorship and termination of sponsorship; §80.10, concerning prohibition on false, misleading, or deceptive practices and improper dealings; §80.12, concerning display of license verification and license record changes; §80.13, concerning books and records; §80.18, concerning enforceability of liens; and, §80.23, concerning annual reports. Notice of the Commission’s adoption of these amendments was published in the October 31, 2008 issue of the Texas Register (Vol. 33, No. 44). These amendments were adopted without changes to the text of the proposed amendments published for comment in the August 22, 2008 issue of the Texas Register (Vol. 33, No. 34). See this firm’s August 25, 2008 memo advising you of the proposed amendments and the Commission’s request for comments.