Historically, bankruptcy judges have been prohibited from modifying first mortgages to increase liquidity in the mortgage markets and increase home ownership by reducing the cost of mortgage credit. This bill undermines that public policy.

By working together we will have a successful future and help our customers. IMA is proud to present the 2008 Spring Conference with full-day of educational and networking opportunities.

With sessions on coaching your team, thriving on change, industry updates and an inspirational message, the Spring Conference will provide you with what you need to thrive as a mortgage professional! Take this opportunity to network with your peers from around the state, sharing ideas and solutions. As always the Spring Conference will also feature an exhibit hall with the latest products and services for the mortgage industry. Your peers, industry vendors, educational speakers and informative sessions will help you be successful in the mortgage industry. We look forward to seeing you at the conference and know you will discover ideas that will foster professionalism and success in your business!

The members of the 2007 Winner's Circle and President's Club will be honored at the IMA Spring Conference on April 3, 2008.

There is plenty of money available for those interested in refinancing existing Guaranteed and Direct home loans. A 0.5% fee to Rural Development does apply.

The proposal would permit prepayment penalties for the first five years of a loan provided they expire 60 days prior to reset to a higher interest rate. (NOTE: Iowa law is more restrictive than Reg. Z, prohibiting prepayment penalties on residential real estate loans*****) Lenders would be prohibited "from engaging in a pattern or practice" of making loans without considering a borrower's ability to repay, a standard the Fed has indicated is very difficult to prove. Escrows for insurance and taxes would be required for the first year, and borrowers could opt out after that.

Key Provisions of the Fed Proposal
Provisions Applicable to Higher-Priced Mortgage Loans
The proposal would amend the current HOEPA rules by creating a new category of protected loans called "higher-priced mortgage loans." These are closed-end consumer credit transactions secured by the consumer's principal dwelling where the annual percentage rate (APR) on the loan exceeds the comparable Treasuries by three points for first-lien loans or five points for subordinate-lien loans." This category would include home purchase loans, refinancing of such loans, and home equity loans, but not mortgages on vacation properties, open-end home equity plans, reverse mortgages or construction-only loans. The existing requirements for HOEPA loans apply only to closed-end, non-purchase money mortgages secured by the consumer's principal dwelling with an APR exceeding comparable Treasuries by 8 points for first-lien loans (10 points for second liens) or fees and points exceeding 8 percent of the total loan amount or $547.

Because HOEPA high-cost loans capture very few subprime loans, the Fed created this new category in an attempt to cover subprime loans while at the same time excluding prime loans.

The proposal includes four key protections for higher-priced mortgage loans:
1. The HOEPA prohibition on a pattern or practice of extending credit without regard to the borrower's repayment ability would apply. Specifically, creditors would be prohibited from engaging in a pattern or practice of extending credit without considering borrowers' ability to repay the loan, demonstrated by failing to:
a. Verify and document consumer' repayment ability;
b. Determine consumers' ability to repay as determined in the rule for variable-rate loans by adding the
margin and index value as of consummation and for step-rate loans by calculating the highest
interest rate possible within the first seven years of the loan's term;
c. Use the fully-amortizing payment (including taxes and insurances) to determine ability to make loan
payments;
d. Consider consumers' debt-to-income ratio; and
e. Consumers' residual income after paying obligations.
2. Creditors would be required to verify the income and assets they rely upon in making a loan. This would basically eliminate "stated income" loans.
3. The HOEPA rule on prepayment penalties would apply except that no penalty will apply for at least sixty days before any possible payment increase. Specifically, prepayment penalties would be prohibited unless:
a. The consumer's debt-to-income ratio does not exceed 50 percent of his/her monthly gross income;
b. The source of the prepayment funds is not a refinancing by the creditor or an affiliate;
c. The penalty term does not exceed five years; and
d. The penalty will expire at least sixty days prior to any possible payment increase.
4. Creditors would have to establish escrow accounts for taxes and insurance on first-lien loans. Creditors would be permitted-but not required-to offer the borrower the opportunity to "opt-out" of or cancel the escrow twelve months after consummation.

Provisions Applicable to All Home Loans
This part of the proposal amends Regulation Z and applies to all loans secured by a consumer's principal dwelling, regardless of the loan's APR.

Lending and Servicing Practices
1. Lenders would be prohibited from compensating mortgage brokers by making payments known as "yield-spread premiums" unless the broker previously entered into a written agreement with the consumer disclosing the broker's total compensation and other facts. A yield spread premium is the fee paid by a lender to a broker for higher-rate loans. The consumer's written agreement with the broker must occur before the consumer applies for the loan or pays any fees. Lenders may still pay mortgage brokers if they can demonstrate that the compensation is not based in whole or in part on the interest rate of the loan.
2. Creditors and mortgage brokers would be prohibited from coercing a real estate appraiser to misstate a home's value.
3. Companies that service mortgage loans would be prohibited from engaging in four practices.
4. Servicers would be prohibited from failing to:
a. Credit consumers' loan payments as of the date of receipt;
b. Imposing a late fee or when (1) the only delinquency is attributable to late fees assessed on an earlier payment; and (2) the payment is otherwise a full and timely payment for the applicable period;
c. Provide a schedule of fees to a consumer upon request; and
d. Provide an accurate payoff-statement within a reasonable time (generally three business days) after receiving a request for it.

Advertising Restrictions
The proposed revisions to Reg. Z advertising rules require additional information about rates, monthly payments, and other loan features, some of which apply to both closed-end and open-end mortgage credit, while others apply only to closed-end mortgage credit.

Closed- and Open-End Credit. The proposed amendments would require that whenever a rate or payment is included in an advertisement for closed-end or open-end credit secured by a dwelling, all rates or payments that will apply over the term of the loan (and the time periods for which those rates or payments apply) must be disclosed with equal prominence and in close proximity to the advertised rate or payment.

Prime Times: What is your current position?
Response: Vice President/Residential Lender

Prime Times: How did you get started in the mortgage business?
Response: I started my banking career working in the bookkeeping department in the basement of a bank in Huron, SD. There was no where to go but up! As I advanced my banking career by transitioning into other departments, it was a natural progression that led me into mortgage lending.

Prime Times: Were you an immediate success?
Response: I stepped into mortgage lending at the height of the refi boom in 1991. It was hard not to be successful as customers were beating down the doors to refinance their 10% fixed rates and 16% adjustable rates! Talk about "baptism by fire"!

Prime Times: When did you begin to realize that you were successful?
Response: When previous customers began referring their friends and family to me for a home loan.

Prime Times: What mistakes do you think new loan originators typically make?
Response: They do not realize the business just doesn't walk through the door and that you need to constantly market yourself.

Prime Times: How about the veteran loan originators? What mistakes do they make?
Response: Most of us probably slip from time to time into thinking our next application is just another transaction. We do this everyday and tend to forget that even the smoothest transaction can be a highly stressful event for even a second or third time homebuyer.

Prime Times: What differentiates you and your company from other originators and companies?
Response: Our bank has many long-time, seasoned originators, processors, closers and underwriter. It's great to be able to talk face to face with an on-staff underwriter or another originator about the different situations we encounter and draw on previous experience to come up with the best solution.

Prime Times: What is your most successful sales tool?
Response: Communication and more communication with the borrowers, selling agents, listing agents and my processor and closer.

Prime Times: Who or what was the biggest contributor to your success?
Response: When I moved into mortgage lending, I was lucky enough to join a staff of long-time, highly experienced originators and supervisors. They were always there to give me direction and help me work through that really tough deal and not end up with "egg on my face"!

Prime Times: What is your current mix of business and business sources?
Response: It's pretty equal as far as realtors and past customers and Vantus Bank's own customer base.

Prime Times: If you could change one thing about the mortgage business, what would that be?
Response: The news media and all the negative publicity about today's mortgage industry. They seem to have placed the blame on even those of us who practiced prudent lending. Let's place the blame where the blame lies!

Prime Times: What other goals in your career would you like to accomplish?
Response: I simply want to be thought of as an honest and respectable business person by my co-workers and members of the community.

Prime Times: What words of wisdom would you offer other mortgage originators?
Response: Treat the buyer of the $50,000 home with as much respect as the purchaser of the $300,000 home. You never know….that $50,000 buyer could need a loan in a few years to buy that $300,000 home!