October was a busy month. In mid-October I attended the MBA conference in Boston. I took many notes the sessions offered valuable information. One overwhelming message, which was discussed many times over, is the threat of increased government oversight in our industry. Good, bad, or otherwise, we are coming up on an election year and one hot election year topic is cleaning up the mortgage industry. Your national association is gearing up to educate lawmakers, the media, and the general public in an effort to focus on sensible, rather than token, legislation to best serve the interest of the consumer and the people in our industry. One of their most visible efforts is their consumer focused website to give consumers unbiased information about the mortgage process. The website for the Home Loan Learning Center can be found at www.homeloanlearningcenter.com. Take a look at this website today and then let your customers know about it.

We were also reminded about the value of our PAC and how important these funds will be in the year to come. Please consider a donation to the IMA PAC if you have not already done so. If you have, thank you and we look forward to your contribution in 2008. This is our industry and the PAC is a vital tool to help us steer through the legislative challenges ahead. Watch for articles in this and future Prime Times for updates on legislative items. If there is immediate action needed, watch your emails and respond to the IMA “Call-to-Action”.

During the state and local portion of the conference, I spent a great deal of time networking with other state associations. Most of the states were represented and we had time to discuss best practices. As I listened to members from other states share their best practices, I felt good because we, in the Iowa Mortgage Association, have already implemented many of their best ideas. Some of these things included technology, networking, legislative efforts and education. While we are pretty good at most of these things already, I know we have room for improvement. One area we continue to focus on is membership benefits. This year our areas of focus will be to provide more education and networking opportunities to our members. We also hope to reach out to affiliate companies and provide them membership opportunities as well.

One of our goals is to have additional networking events in all four corners of the state. Our first event will be in the Northwest part of the state before the year is up. While the date is not yet set, be watching your email and snail mail for more information. We are looking for ideas, so don’t be shy if you have a good idea to bring people together.

At our last board meeting in October, we voted to bring in a new committee to our committee structure. The new committee is the Settlement Service Providers committee chaired by Jack Hosking and Rhonda Kimble. This is a committee to give an industry voice to all those in our state providing settlement or closing services to our member lenders. The board felt this was a great way to share information and broaden our membership base with our affiliate companies. Please let your closing and title companies know about this new committee and welcome them to join the IMA.

Finally, with all that is going on in the industry today, many of our lender and MI partners have tweaked their product offerings and underwriting guidelines. Make sure you are aware of these changes before you make promises to your customers. The best way to make sure you have the most up to date information is to check the company websites or contact your company representative.

Remember the veterans on Veteran’s Day!

Make time to remember the things you are thankful for on Thanksgiving.

Your president,
David Horak

The IMA is planning another great year, continuing to make significant strides to improve the mortgage industry. We encourage to you join forces with your fellow mortgage professionals and take advantage of all the IMA has to offer.

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Summary of Manager’s Amendment to
H.R. 3915
Title I (Mortgage Origination)
Subtitle A. Licensing System for Residential Mortgage Loan Originators.
• This subtitle is from Rep. Bachus’ bill (HR 3012) and provides for licensing and registration of individual
mortgage brokers and registration of bank employees that originate mortgages, as well as the establishment of a
Nationwide Mortgage Licensing System and Registry (NMLSR).
-- Applicants for State license and registration will furnish certain information to the NMLSR, including
fingerprints and personal history and experience, and meet minimum standards including pre-licensing
education and written tests.
-- Federal banking agencies will develop and maintain a system for registering the employees of banks and their
subsidiaries as registered loan originators with the NMLSR.
-- If a State does not have a system that meets the minimum standards for State-licensed loan originators or does
not participate in the NMLSR, then HUD will establish a backup licensing system for loan originators that
operate in that State. HUD will be granted enforcement authority over such loan originators similar to banking
regulators.

Subtitle B. Residential Mortgage Loan Origination Standards
• Federal Duty of Care: All mortgage originators (including individuals as well as companies and banks that
originate mortgages) will be subject to a federal duty of care that requires (1) licensing and registration, as
applicable, under State or Federal law (including under subtitle A), (2) presenting consumers with appropriate
mortgage loans (i.e., consumer has reasonable ability to repay and receives net tangible benefit, and loan does not
have predatory characteristics), (3) making full disclosures to consumers, (4) certifying to lenders compliance with
mortgage origination requirements, and (5) including a mortgage originator’s unique identifier in loan documents.

• Anti-Steering: For mortgage loans that are not prime loans, no mortgage originator can receive, and no person can
pay, any incentive compensation (including yield spread premiums) that varies with the terms of the mortgage loan
(except for size of the loan and number of loans). Regulations will be promulgated to prohibit mortgage
originators from (1) steering any consumer to a loan that the consumer lacks a reasonable ability to repay, does not
provide net tangible benefit, or has predatory characteristics, (2) steering any consumer from a prime loan to a
subprime loan, and (3) engaging in abusive or unfair lending practices that promote disparities among consumers
of equal credit worthiness but different race, ethnicity, gender, or age.

• Remedies: Remedies will be up to three times broker fees plus costs.

Title II (Minimum Standards for All Mortgages)
• Ability to Repay/Net Tangible Benefits: Based on Federal bank regulatory guidance and North Carolina standard.
Requires creditors to make a reasonable determination, at the time the mortgage is consummated, that:
-- the consumer has a reasonable ability to repay the loan; or
-- for refinancing, the refinanced loan will provide a net tangible benefit to the consumer.

• Safe Harbor: A presumption can be made that the minimum standards (reasonable ability to repay and net tangible
benefit) are met for “qualified mortgages” and “qualified safe harbor mortgages.” Qualified mortgages (prime
loans) are presumed to meet the minimum standards and this presumption may not be rebutted. For qualified safe
harbor loans, the presumption may be rebutted only against creditors.
-- Qualified mortgages are prime loans with APRs that do not exceed the North Carolina standard.
-- Qualified safe harbor mortgages are loans with (1) documented consumer income, (2) underwriting process
based on fully indexed rate (taking into account taxes, insurance, and assessments), (3) no negative
amortization, (4) other requirements that may be established by regulation, AND (5) one of the following: (i)
fixed payment for at least 5 years, (ii) for variable-rate loans, APR that varies less than 3% over the interestrate
index, OR (iii) DTI not greater than a percentage prescribed by regulation.

• Assignee/Securitizer Liability (does not extend to trusts and investors): Subject to exemptions below, for loans
that violate the minimum standards (reasonable ability to repay and net tangible benefits), a consumer has an
individual cause of action against assignees and securitizers for rescission of the loan and the consumer’s costs for
rescission.
-- Exemption from Liability: An assignee/securitizer will not be liable for a loan that violates the minimum
standards if the assignee/securitizer provides a cure to make the loan conform to the minimum standards
within 90 days of receiving notice from the consumer, OR (1) has a policy against buying mortgage loans that
are not qualified mortgages or qualified safe harbor mortgages and exercises reasonable due diligence to
adhere to such policy AND (2) has obtained representations and warranties from the seller or assignor of the
loan regarding not selling or assigning loans that violate the minimum standards.

• Defense to Foreclosure: When the holder of a mortgage loan or anyone acting on behalf of the holder initiates a
judicial or non-judicial foreclosure, (1) the consumer who has a rescission right under this bill may assert such
right as a defense to foreclosure against the holder to forestall foreclosure, or (2) if the rescission right has expired,
the consumer may seek actual damages (plus costs) against the creditor, assignee, or securitizer.

• Effect on State Laws: Provides limited preemption of State laws relating only to assignee/securitizer liability (but
not to creditor liability). Provides for a national standard and unique Federal remedy for assignee/securitizer
liability arising from a claim regarding lack of reasonable ability to repay and lack of net tangible benefit. States,
however, may pass laws or add remedies relating to the liability of other parties, including the creditors.

• Renters: Provides certain protections for renters when the homes they rent go into foreclosure.

• Additional Standards and Requirements: Prohibits certain prepayment penalties, as well as single-premium credit
insurance and mandatory arbitration, for mortgage loans.

Title III (High-Cost Mortgage)
• This title is from the Miller-Watt bill of 109th Congress (HR 1182) and expands the scope of and enhances
consumer protections for “high-cost loans” under HOEPA by, among other provisions:
--lowering the APR trigger from 10% to 8% over comparable Treasuries (codifies existing Board standard),
--lowering the points and fee trigger from 8% to 5% and including additional costs and fees in the trigger,
-- prohibiting the financing of points and fees,
-- prohibiting excessive fees for payoff information, modifications, or late payments,
-- prohibiting practices that increase the risk of foreclosure, such as balloon payments, encouraging a borrower to
default, and call provisions, and
-- requiring pre-loan counseling.

Title IV (Office of Housing Counseling)
• This title is from Rep. Biggert’s bill (HR 3019) and establishes within HUD an Office of Housing Counseling that
will conduct activities relating to homeownership and rental housing counseling.
-- Requires HUD to provide for the certification of various computer software programs for consumers to use in
evaluating different residential mortgage loan proposals.
-- Authorizes appropriation not to exceed $3 million for national public service multimedia campaigns for
homeownership counseling services for fiscal years 2008, 2009, and 2010.
-- Requires HUD to provide financial and technical assistance to States, local governments, and nonprofit
organization regarding the establishment and operation of related educational programs, and authorizes
appropriation of $45 million for each of fiscal years 2008 through 2011.
-- Directs HUD to study and report to Congress on the root causes of the default and foreclosure of home loans.