richard sweum: Richard Sweum : In the CFPB Pipeline...HMDA reporting under review. - 02/09/14 11:39 PM
Richard Sweum : In the CFPB Pipeline...HMDA reporting under review.
I wonder if there would have been a real estate bubble and subsequent "bust" had the rules that have come into existence over the past 3 years had been enacted in 2000.  I think most would agree, that the vast majority of all the "bad actors" out there in the lending industry have left the building...gotten on the bus...moved on to greener pastures.   I firmly believe that there is a role for the CFPB in todays world that holds the lending industry to account, and would actually like to see its … (0 comments)

richard sweum: Richard Sweum: Highlights of the QM and ATR rules now in effect. - 01/15/14 06:11 AM
Richard Sweum:  Highlights of the QM and ATR rules now in effect.
End result?  I think borrowers are indeed more protected.  I am not so sure that they will understand the mortgage process any more than they did before, but there are indeed more safeguards in place.
Ability to Repay (ATR) and Qualifed Mortgage (QM) rule highlights for agents and borrowers
 
 
On January 10, 2014, several important new rules enacted by the Consumer Financial Protection Bureau (CFPB) take effect.  The Ability to Repay (ATR) and Qualified Mortgage (QM) provisions will have the greatest impact on borrowers because they influence … (0 comments)

richard sweum: Richard Sweum: CFPB's Fact v. Fiction sheet on Ability to Repay rule. - 01/07/14 05:04 AM
Richard Sweum:  CFPB's Fact v. Fiction sheet on Ability to Repay rule.
Whether you agree or disagree with the CFPB's "Fact or Fiction" sheet, it's always good to know what folks are saying, no matter what perspective they are coming from.   What the end result will be won't be known for a year at least... but one can only hope that the implementation of the new rule going into effect on January 10th will not have a negative impact on the housing market or on the consumers that the CFPB was charged with protecting.
 
"We will see!" said the Zen … (0 comments)

richard sweum: Richard Sweum: So you thought 700 was a good FICO Score? (delay?) - 12/18/13 12:28 PM
Richard Sweum:  So you thought 700 was a good FICO Score?
(Possible delay in implementation leaked by the new FHFA Director... this would be helpful!)  No, 700 is not a good FICO score...at least not any more.  Fannie and Freddie have something called LLPA's, (loan level price adjusters) for a number of elements of a borrowers credit profile and the type of loan characteristics present.  I've always been frustrated by lenders that advertise "rates" because every borower and every type of loan transaction is unique and a rate and the cost of the rate is just as unique.   Each rate available … (0 comments)

richard sweum: Richard Sweum: ATR (Ability To Repay) and January 10th 2014. - 12/16/13 12:30 AM
Richard Sweum: ATR (Ability To Repay) and January 10th 2014.
January 10th is a "day of days" in the home loan industry; on par with GFE 2010, LO Comp, HVCC, et al.  The implementation of the final rule related to the Dodd Frank Act.   Along with it, a whole new set of acronyms to make our lives easier and mortgage lending safer for the consumer.
 
The Four Major Rules
• Ability-to-Repay (ATR) & Qualified Mortgages (QM) Effective January 10, 2014
• Loan Officer Compensation Effective January 1, 2014
• Home Ownership and Equity Protection Act, including
high-cost mortgages & homeownership … (0 comments)

richard sweum: Richard Sweum: Current and Past Homeownership Rates...Opportunity! - 12/13/13 08:01 AM
Richard Sweum:  Current and Past Homeownership Rates...Opportunity!
There are thousands of different facts, stats and trends that we call allow ourselves to be absorbed by.  In everey market, there is... guess it now... a ... MARKET!  Someone is always buying and someone is always selling at any given price.  I try not to get too swayed by any piece of minutia, but occassionally...something steps right up and kicks me in the tail.
Homeownership rates kicked me yesterd ay.  Homeownership rates continue to slide...fewer houses being built, fewer new homebuyers entering the market, and more and more young (25-30) folks living back at … (0 comments)

richard sweum: Richard Sweum: FHA and the Qualified Mortgage Rule Summary - 12/12/13 07:02 AM
Richard Sweum:  FHA and the Qualified Mortgage Rule Summary
 
Not that anyone is really paying attention anymore (at some point and time, everything fades into the rattle and hum of internet informational blather) HUD finally came out with how it was and was not going to play by the QM rules of Dodd-Frank.  No great shockers, the summary can be found below.
 
 
 
 
 
FHA Qualified Mortgage Rule
December 11, 2013
 
Action: Today HUD issued its Qualified Mortgage (QM) rule (rule) defining QM under the Federal Housing Administration (FHA programs). The rule is effective … (0 comments)

richard sweum: Richard Sweum: New 8/1/2015 "Integrated Mortgage Disclosures" - 11/20/13 05:51 AM
Richard Sweum:  New 8/1/2015  "Integrated Mortgage Disclosures"
I've got 1 thing to say:  Unbelievable. 
God help us all, the final rule is 1888 pages long, and from what I can tell, there are different and separate "new" forms for every possible type and distinction of transaction.  FUBAR.
Integrated Mortgage Disclosures under the Real Estate Settlement Procedures Act (Regulation X) and the Truth In Lending Act (Regulation Z)
Status:Final Rule
Issued Date: November 20, 2013
Effective Date: August 1, 2015
Docket no. CFPB-2012-0028
CFR PartSubjects:
advertising; condominiums; consumer protection; Credit; credit unions; housing; mortgage servicing; mortgages; national banks; recordkeeping and … (0 comments)

richard sweum: Richard Sweum: New Conventional Loan Standards via DU 9.1 - 11/19/13 11:41 PM
Richard Sweum:  New Conventional Loan Standards via DU 9.1
Freddie is following Fannie on all of the major changes (loan to value 95% etc), but what will be interesting to view over the next 2 weeks are the completely new loans that were not run through DU prior to Nov 16th, and what other surprises we might see.   In the mortgage lending world, sometimes we refer these subtle and not so subtle tweaks to Fannie (DU) and Freddie (LP) automated underwriting systems as "tightening of the screws" on our borrowers credit profile.  One thing that we are expecting is that we are … (0 comments)

richard sweum: Richard Sweum: Homeownership Counseling and Instruction a requirement? - 11/19/13 12:43 AM
Richard Sweum:  Homeownership Counseling and Instruction a requirement?
Not necessarily...yet.  A lending requirement sunami of sorts is about 2 miles offshore courtesy of the CFPB.  January 10th could possibly be remembered as a "day of days," the date which many CFPB requirements go into effect that range from loan servicing to homeownership counseling.   I do homeownership counseling with all of my clients, even clients that have owned homes previously.  It is good to have a refresher course related to the rights, responsibilities, and risks associated with home ownership AND the financing that comes along with it.  All in all, the lending regulations are … (0 comments)

richard sweum: Richard Sweum : We are the Government, and we're here to help! - 09/09/13 03:49 AM
Richard Sweum : We are the Government, and we're here to help!
God bless 'em, folks with the "intent" of helping.  But, I would say that anytime the government shows up to help, we have a fair amount of skepticism.  All too often, the "help" has ended up hurting.  The efforts to protect people, simplify procedures, and reduce costs of just about anything end up having the opposite effect.  There were MANY consumers who were taken advantage of via shady practices in the mortgage industry between 2000 and 2009.  Shame on them.  The vast majority of those "evil doers" are gone.  … (0 comments)

richard sweum: Richard Sweum : QM (qualified mortgage) Points-and-fees caps! Wow! - 08/19/13 08:33 AM
Richard Sweum : QM (qualified mortgage) Points-and-fees caps! Wow!
We are really diving into the deep end the the pool now... QM (qualified mortgage)...the category that all securitized mortgages with the agencies will be striving to fit into the category of, just had its entry portal's size cut in half.  3% points and related fees limitations are in place on every loan with some exceptions for loan size.  Everything we had been hoping was not going to be included, is in fact at this time included.  Loan Level Price adjustments (fannie and freddie cost of rate adjusters), origination (bucket 1 fees), … (0 comments)

richard sweum: Richard Sweum : ATR a new acronym that every lender will know well! - 08/19/13 08:17 AM
Richard Sweum : ATR  a new acronym that every lender will know well!
ATR... not to be confused with ATM, ATV, or APR... ATR is the new mortgage industry rocking acronym that every lender will know very well by January 1, 2014 when the new QM (qualified mortgage) rules go into effect.  DTI (debt to income) must represent that the borrower has the ATR -- ABILITY TO REPAY.  What, didn't DTI kindof mean that?  Well, sort of.  On VA loan "residual income" is an important factor along with DTI, and residual income is a factor in the new ATR philosophy...more members … (0 comments)

richard sweum: Richard Sweum : Government aims to improve financial literacy..really? - 08/07/13 03:12 AM
Richard Sweum : Government aims to improve financial literacy..really?
Anytime the Government "aims to improve" anything...we should be concerned.  When making application for a home loan, conventional financing, there are over 35 pages of disclosures, on a FHA loan, 40, and on a VA loan 45...add another 5 pages if the borrower chooses an adjustable rate product.  While each disclosure in and of itself may be useful, the sheer volume of pages, information and repetitiveness causes the entire package to lose its efficacy.  Consumers do need protection, but sometimes, the protection prescribed makes them even more vulnerable!
Consumer Financial Protection Bureau … (0 comments)

richard sweum: Richard Sweum: Loan Officer Compensation-- no way around the rules! - 07/26/13 03:03 AM
Richard Sweum:  Loan Officer Compensation-- no way around the rules!
When the Loan Officer Compensation rules changed in 2010...it was a good thing, and it was a bad thing.   In the 9 months prior to the rules issued by the Federal Reserve Board and the Dodd Frank Act going in to effect...you saw a lot of scrambling, trying to find loopholes, outs, and methods of a loan officer being able to make as much money off of a loan as they did in the past.  Ultimately, a loan officer can get paid in 1 of 2 ways...based on volume OR based … (0 comments)

richard sweum: Richard Sweum: New Construction Plats with "Preferred Lenders" - 07/26/13 02:35 AM
 
Richard Sweum:  New Construction Plats with "Preferred Lenders"
So...the CFPB (consumer finance protection Bureau) has been showing that it is interested not just in "finance" but also all things related to finance, a far off the beaten path as RESPA Section 8 violations-- kickbacks.  This is a good thing...ultimately, the only ones that benefited from a captive or preferred lender/builder relationship was the builder and the lender.  Having a "preferred lender" seems innocent enough and good business... a lender that knows the product, the timelines, the unique aspects of a new construction is helpful.  BUT, when a buyer/borrower has to … (0 comments)

richard sweum: Richard Sweum: Off Topic Vent...My Summer Vacation is Boring! - 07/17/13 01:21 AM
Richard Sweum:  Off Topic Vent...My Summer Vacation is Boring!
OK...my mind has been too consumed with all matters of mortgage, real estate and business minutia.  Granting myself 10 minutes to vent on an "off topic" is
"This Summer vacation is boring!"  Ok, a little vent.  When I was growing up, my Summer vacations were pretty unstructured and an "exciting family trip" was not a given...maybe "one" every 4 or 5 years.  I was fortunate to have Scout camp or a 50-miler to look forward to but the rest was left up to my imagination and initiative.  I remember one Summer, the … (0 comments)

richard sweum: Richard Sweum: why financing is more expensive...4 letters... CFPB - 07/09/13 02:16 AM
Richard Sweum:  why financing is more expensive...4 letters... CFPB
I'm not 100% against the creation or the actions of the the CFPB, the Consumer Finance Protection Bureau, but as with any governmental agency empowered with rule making authority and enforcement...it has the tendency to try to solve the problems of the past and in their efforts to make things simpler, cheaper and more safe for the public, they end up making things more complex, more expensive, and more dangerous...yes, dangerous.  Not in the "fall off of a cliff" variety of dangerous, but in a "my options are limited" type of dangerous.
(0 comments)

richard sweum: Richard Sweum: Builders with "Preferred Lenders" beware of the CFPB! - 07/05/13 12:47 AM
Richard Sweum:  Builders with "Preferred Lenders"  beware of the CFPB!
We all know the scenario:  Buyers get pre-approved for a $300k purchase and they have just enough to put for a downpayment, but are going to need the seller to constribute some duckets for closing costs.  They find a new construction plat that is everything they ever dreamed of and pick out the model of the home they want.  Their realtor informs them, that per the terms of the purchase and sale, if they want ANY upgrades OR concessions to closing costs from the builder/seller, they have to use the builder's … (0 comments)

richard sweum: Richard Sweum : Limited Denials of Participation...stay off the list! - 07/03/13 10:10 AM
Richard Sweum : Limited Denials of Participation...stay off the list!
When the real estate market get's hot and folks are looking for anyway to secure financing to buy a home before prices go up further, the plow starts moving closer to the cotton, ethics become flexible, wording in pre-approval letters becomes more obscure, and normal fair minded real estate professionals and lenders start looking for loopholes and the reality that the Department of HUD is too busy with other things than to have time to focus on individual real estate transactions.
Getting on a HUD LDP/GSA list is not something that … (0 comments)

 
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