MORE Red Tape for Lenders

The State Regulatory Registry ("SRR") has issued proposed changes to the Mortgage Call Reports ("MCRs") that state mortgage licensees are required to file with the National Mortgage Licensing System and Registry ("NMLS") on a quarterly basis.  An announcement was released in the National Mortgage Professional Magazine on January 6, 2015 and is located HERE.  The SRR owns and operates the NMLS and was formed by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators.

The MCR is a report of financial condition and loan activity of each state mortgage licensee.  The MCRs are required under the SAFE Act of 2008.  They are filed electronically through NMLS.  There are two types of MCRs, a standard MCRs (S-MCRs") and an expanded MCRS (E-MCRs").  Most companbies file the S-MCRs.  Those companies that are Fannie Mae or Freddie Mac approved sellers/servicers or Ginnie Mae issuers are required to file the E-MCRs.

The SRR is seeking comments on four proposed changes: (1) the definition of "application"; (2) required reporting on the amount and count of "Qualified Mortgages"; (3) required nationwide and state-specific reporting; and (4) additional fields to reflect changes in the number of loan applications. 

Currently, the NMLS standard definitions for MCRs dewfine an application as, "An oral or written request for a home purchase loan, a home improvement loan, or a refinancing that is made in accordance with procedures used by a financial institution for the type of credit requested (Per Reg B). Examples of requests that are considered an application for the NMLS MCR include, but are not limited to, any HMDA reportable application, pre-approval requests, request without a property address, or requests which include access to the borrower's credit information". 

The SRR, according to the NMP announcement is seeking to define an application as, "an oral or written request for an extension of credit encumbering a one- to four-family residential property.” This includes prequalification requests resulting in an adverse action. In addition, the proposal also outlines what application date should be used for reporting.

Loans which would fall under the “application” definition include, but are not limited to:

►One- to four-family residential properties (including second homes and investment) as well as preapprovals;
►One- to four-family residential properties for construction (made directly to the borrower);
►Lines of credit (reported at maximum approved credit line);
►Reverse mortgages;
►Refinance loans; and
►All purchases loan requests in which an Equal Credit Opportunity Act (ECOA) notice is issued.

The SRR according to NMP, is also looking to include more information regarding Qualified Mortgages in MCRs.  The SRR would define a QM as any loan that meets the minimum product feature requirements with a DTI of less than 43%, loans that are GSE eligible, and "small creditors" where the organization has less than $2 billion in asstes and originates 500 or less first mortgages annually.

The NMLS standard definitions as currently exist and required information for an MCRs can be found HERE.  The NMLS "Navigation Guide" for MCRs can be found HERE.  The complete explanation of the proposed changes for MCRs and the request for proposals can be found HERE.  Contact information for the CSBS and SRR can be found HERE.  

I encourage you to weigh in on this proposed change.  The mortgage industry does not need more red tape and reporting requirements.  We need to spend more time processing the mortgage applications of your clients and tending to the needs of your clients!