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Atlantic City NAMB Expo. - Mortgage Brokers - and the new Dodd-Frank

By
Mortgage and Lending with Joyce S. Drakeley Real Estate & Cabrillo Mortgage REB#0750714, NMLS#336022

Sorry to cut the title short, but this past week I attended the NAMB Expo in Atlantic City, held at the Tropicana Hotel & Casino. And I was completely engulfed in the new rules, disclosures, and what's around the corner. I was lucky to be one present....

 

To start off, for someone who is always down for some black-jack, I had no interest this time. I was simply astonished at the cast of Leaders, Educators & those who are at the top of the industry nationwide, all present sharing there thoughts, predictions, and forecasts based on Washington's latest set of new rules & enforcers, as well as what got them here.

 

The CFPB - This new Federal agency called The Consumer Financial Protection Bureau, means exactly what it implies in its name. Your new Federal Bureau that looks out for the consumer and protects them in all and every way. This is what it seeks out to do, because of the mess that happened in the late 2000's, someone needs to pay the price of strict regulation & and more transparency. huh, now there's a word I like...."Transparency". Much like the I.R.S., a federal agency itself, The CFPB will be out to audit at random, and anyone showing up on the FBI red flag database. As you may or may not be aware, Licensed Loan Originator, & Mortgage Brokers all go through a yearly check up with the FBI, the 3 Credit bureau's & Education requirements. 

 

I was lucky enough to find myself in a room with some of the supreme thinkers in our industry, as well as educators directly from the NMLS with a clear explanation of whats to come down the road.

 

Now with the Dodd-Frank bill nearing completion, and the many elements of it, consisting of, but not limited to, the QM Rule, the Safe Harbor rule, and new good faith estimates, truth in lending forms, I will take some time here to explain whats coming that's new, and what has been left out.

 

The QM rule - Basically this is the new Conventional guidelines on debt to income ratio's, set @ 43%. This does not include any Government products, such as FHA, VA, USDA, Home-path, etc...

Along with the QM rule, the Safe Harbor requires Lenders & Licensed Originators/Mortgage Brokers to ensure that the client can re-pay the loan.

 

Also - If you have completed or attempted a re-fi or purchase loan in the last 12+ months from a Mortgage Broker, your would have received (supposed to anyways) a GFE & TIL (Good Faith Estimate & Truth in Lending Disclosures) 3 days after application from your Mortgage Broker, showing you your costs of the loan, as well as APR, finance charges over the complete term, etc...

 

Now, or closer to the beginning of the new year, we will have to issue you a new disclosure, really combining these two previous disclosures into one more simple one. This will need to be supplied to the client prior to application.

 

So, when applying for a loan for a purchase, or a re-fi - you will soon see the costs associated with your loan, broken down in a much more friendlier way:)

 

Thanks for reading as always !! Rob D.