2009 IMA Annual Convention

2009 IMA Annual Convention
"In Search of….Opportunities in Changing Mortgage Worlds"

Designed to help you be "In Search Of...." the 2009 IMA annual convention is a must for any mortgage professional. This year's event has sessions on business strategies in a down market, regulatory updates, building networking connections, tools for first time home buyers and more.

Take the opportunity to network with your peers, explore the products and services available in the exhibit hall and gain perspective from the educational speakers.

September 2 - Golf Outing at Briarwood Golf Course in Ankeny
September 3-4 - Convention at Downtown Des Moines Marriott

To register for the Convention see the IMA Calendar of Events. Don't miss this great event!

IMA Iowa Certified Mortgage Professional Designation

IMA Iowa Certified Mortgage Professional Designation

Ready to achieve a new level of professional growth and recognition? The Iowa Certified Mortgage Professional Designation (ICMP) program is designed to elevate professional standards, enhance individual performance, and designate association professionals who demonstrate the knowledge essential to the mortgage industry.

Getting the ICMP isn't simply a one-time thing, but an ongoing commitment to professional growth. Professionals holding the designation pledge to continually advance their knowledge and achieve higher levels of excellence in the industry. The Iowa Mortgage Association encourages you to learn more about becoming an ICMP.

We invite you to learn more about becoming an Iowa Certified Mortgage Professional and take this crucial step that tells others they are working with a recognized expert in the mortgage industry. For more information about the ICMP designation process or to download an application see the IMA website or call IMA's Darcy Burnett at 800-800-2343 with questions.

Iowa Civil Rights Commission to Conduct Survey and Public Forums on Status of Fair Housing in Iowa

Iowa Civil Rights Commission to Conduct Survey and Public Forums on Status of Fair Housing in Iowa

The Iowa Civil Rights Commission is currently working to determine the most pressing obstacles or impediments to fair housing in Iowa and the most effective ways of addressing these challenges. Fair housing means all persons have equal opportunity to be considered for rental units, purchase of property, housing loans, property insurance, or other housing services without regard for race, color, sex, sexual orientation, gender identity, religion, national origin, mental disability, physical disability, and familial status (presence of children). The Iowa Civil Rights Commission will be conducting an online survey and holding public forums in several communities around the state that are not entitlement communities receiving CDBG or HOME program funding.

The results of the survey will be tabulated and placed on the Iowa Civil Rights Commission website, along with the full report of the Analysis of Impediments to Fair Housing in Iowa. The Commission has been contracted by the Iowa Department of Economic Development to meet this federal requirement t determine the status of fair housing and to recommend ways to address any identified areas of concern.

This short survey for Iowa residents will be available through August 31, 2009 and should only take about five minutes. To complete the survey, please click on the
following link: http://www.surveymonkey.com/s.aspx?sm=0LMB1f3wfLcF0fDXNmCXEQ_3d_3d

CSBS Launches SAFE Act-Required Mortgage Testing and Education Programs

CSBS Launches SAFE Act-Required Mortgage Testing and Education Programs

The Conference of State Bank Supervisors (CSBS) has implemented its testing and education programs as required under Title V of the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act). Additionally, nearly all states have enacted legislation requiring mortgage loan originators to take the SAFE Mortgage Loan Originator Test and meet pre-licensure and continuing education requirements with NMLS approved courses.

SAFE Mortgage Loan Originator Test
State-licensed mortgage loan originators and those seeking licensure may, at the direction of their state regulator, schedule their SAFE Mortgage Loan Originator Test through the Nationwide Mortgage Licensing System and Registry (NMLS) and take the test at any one of nearly 500 testing sites throughout the country.
The SAFE Mortgage Loan Originator Test includes two components: a National Component and a State Component. The National Component needs only to be taken once and is accepted in all states participating on NMLS. The State Components, which need to be taken in each state in which the individual maintains or is seeking licensure, are available today in: Arizona, Idaho, Iowa, Louisiana, Massachusetts, New Hampshire, North Carolina, Pennsylvania, Rhode Island, Vermont, and Washington. Detailed instructions regarding how to prepare for the test components and schedule appointments are contained in the MLO Testing Handbook which is available in the NMLS Resource Center at http://www.stateregulatoryregistry.org/AM/Template.cfm?Section=Testing

Candidates scheduling the test components will have nearly 500 testing sites from which to choose. There are testing sites in every state, the District of Columbia and each territory. The test centers are administered by Pearson VUE and Prometric.

State Test Components for the remaining states will be available later this year and in 2010. Licensed Mortgage Loan Originators and those seeking licensure should consult their state regulator(s) for state specific information and deadlines.

NMLS Approved Education Course
The SAFE Act requires Nationwide Mortgage Licensing System and Registry (NMLS) to approve courses which meet state pre-licensure and continuing education requirements that meet minimum national standards. NMLS has implemented policies, procedures and systems to review and approve all pre-licensure and continuing education courses.

NMLS began accepting applications on June 22, 2009 from course providers who want to offer courses. To date over 60 providers have submitted applications and over 40 have been approved. It is currently taking approximately two weeks for applications to be evaluated. On July 15, 2009 NMLS began accepting course applications from NMLS Approved Course Providers. To date 55 course applications have been submitted and are being reviewed. Each course evaluation will take approximately 30 days to complete.

Beginning later this summer, state licensed mortgage loan originators will be able to register for NMLS approved education courses. After an MLO completes a course, the NMLS Approved Course Provider will automatically report course completion information to NMLS. Mortgage loan originators can check the status of their NMLS approved course hours through their individual accounts on NMLS. Licensed Mortgage Loan Originators and those seeking licensure should consult their state regulator(s) for state specific information and deadlines.

NMLS is giving priority status to Approved Course Providers who submit applications for pre-licensure courses intended for mortgage loan originator licensees and candidates in the following states: Arizona, Iowa, Louisiana, Massachusetts, Maryland, New Hampshire, North Carolina, Pennsylvania, Rhode Island, Vermont, Washington and Virginia.

Additional information about the NMLS Education Program is available online at the NMLS Resource Center. For more information or questions regarding SAFE Act testing and education, please contact Pete Marks, Vice President National Mortgage Testing and Education Programs, 202-728-5723 or pmarks@csbs.org.

Fed Adjusts TILA Fee Disclosure Trigger

Fed Adjusts TILA Fee Disclosure Trigger

The Federal Reserve has published its annual adjustment of the dollar amount of fees that triggers additional disclosure requirements under the Truth in Lending Act for home mortgage loans that bear rates or fees above a certain amount. The new dollar amount of the fee-based trigger is $579, effective January 1, 2010. The adjustment does not affect the rules, adopted in July 2008, for "higher-priced mortgage loans." Those rules use a different rate-based trigger. Click here to read the notice.

Fed Publishes Consumer Guide to Home Equity Lines

Fed Publishes Consumer Guide to Home Equity Lines

The Federal Reserve has released "5 Tips for Dealing with a Home Equity Line Freeze or Reduction," a consumer guide explaining consumers' rights and lenders' responsibilities related to reduced credit lines. Click here to download a copy.

MDIA Compliance Q&A

MDIA Compliance Q&A

On May 14th the Federal Reserve Board approved the final revisions to Regulation Z to implement the Mortgage Disclosure Improvement Act (MDIA). The MDIA was the result of two 2008 Congressional actions: the Housing and Economic Recovery Act passed on July 30, 2008 and later, the MDIA was further amended by Congress in October 2008 with the enactment of the Emergency Economic Stabilization Act of 2008. The final revisions to Regulation Z resulting from the MDIA can be found online at http://edocket.access.gpo.gov/2009/pdf/E9-11567.pdf.

The revisions to Regulation Z dramatically expand the number of loans subject to the early Truth-in-Lending (TIL) disclosure requirement. In addition, the revisions expand the timing requirements for delivery of the early TIL, impose fee limitations, require redisclosure of the early TIL in certain circumstances and add an additional Fed Box disclosure requirement.

The Iowa Bankers Association Compliance Department has received many questions related to the MDIA changes. The following questions and answers were prepared by IBA Compliance Staff and originally published in The Disclosure, the IBA's monthly Compliance journal.

Q. If we mail the initial early TIL to our applicant, do we have to apply the three-day mailing period before we can start counting our seven-day waiting period to close the loan?
A. The seven-day waiting period begins when the lender "delivers" or places the early TIL in the mail - not when it is received by the consumer. (The three-day mailing time frame becomes an issue for fee restriction purposes and when you have to provide a revised early TIL.)

Q. If we make a loan that is a covered HOEPA (or Section 32) loan, do we have to wait to give the borrowers the HOEPA notice (required to be given to the borrower three days prior to consummation) until after the TIL seven-day waiting period has expired?
A. No - the HOEPA three-day disclosure period and the MDIA seven-day waiting period can occur at the same time (run concurrently).

Q. Both the Truth-in-Lending revisions effective July 30, 2009 and the RESPA revisions effective January 1, 2010 have a fee restriction provision. Does this mean we are prohibited from collecting a rate lock fee? We have had so many customers withdraw their applications after we have locked in a rate, we have started assessing a "rate lock fee."
A. You will still be able to charge a rate lock fee, but will not be able to assess the fee as of July 30, 2009 until the early TIL has been "received" by the applicant and as of January 1, 2010, until the GFE has been "received" by the applicant.
If the GFE and early TIL are provided at the time of a face-to-face application, the fee can be imposed immediately. If the GFE and early TIL are mailed to the applicant, the disclosures are not considered to have been "received" until three days after they are mailed. So the bank could impose its rate lock fee the third day after placing the disclosures in the mail.

Q. I am always a little confused about construction loans. If we are doing a construction loan secured by the dwelling but not the permanent financing, would this loan be covered by the new MDIA rules, or still be exempt because it is not subject to RESPA? And can you explain the difference from a compliance perspective when a person is financing the land purchase as well asthe construction of the home as opposed to financing only the construction of the home alone when the borrowers already owns the land?
A. The early TIL requirements are only applicable to loans subject to RESPA - so if the loan is exempt from RESPA because it meets the definition of "temporary financing", it would exempt from the early TIL requirements. See Reg. Z, §226.19(a):

RESPA has many exemptions from coverage including the temporary financing exemption. However, there two "exceptions" to the temporary financing exemption. You cannot use the temporary financing exemption if the bank "may or will" be doing the permanent financing of the construction loan OR if a portion of your loan proceeds will be used to transfer title to the first user ( purchase the land). So if the borrower already owns the land and has a take-out commitment for permanent financing, the loan can be exempted from RESPA and the early TIL requirements. However, if the borrower does not have a take-out commitment for the permanent financing or if he does not already own the lot and will use the first draw from the loan to purchase the lot, the loan is subject RESPA and thus, also subject to the early TIL requirements.

Q. Our forms vendor has placed the new TILA disclosure (''You are not required to complete this agreement merely because you have received these disclosures or signed a loan application.'' ) at the bottom of the TIL disclosure, not in the Fed box area. Can you provide clarification as to what the regulation requires?
A. See revised Reg. Z section 226.19(a)(4):

The reference to paragraph (a)(1) or (a)(2) of this section relates to the disclosures required by Reg. Z section 226.18, which are essentially the Truth-in-Lending disclosures. Section 226.17's general disclosure requirements detail how the disclosures required by 226.18 should be made: "The disclosures shall be grouped together, shall be segregated from everything else, and shall not contain any information not directly related to the disclosures required under § 226.18."
This is not to say that this new disclosure is required in the box(es) that state the APR, finance charge, amount financed and total of payments - however, as a "material disclosure" it should be included in that portion of the "note and disclosure" that typically contains a box around its borders and includes the content requirements found at section 226.18. This section typically includes such information as itemization, payment schedule, security, filing fees, late charge, required deposit, prepayment, assumption, demand clause, etc.

If your forms vendor disagrees with our understanding of the disclosure requirement, it would be best to obtain an opinion from your bank's federal regulatory agency.

Final Revisions to Flood Insurance Q & A Released

Final Revisions to Flood Insurance Q & A Released

The Office of Thrift Supervision, Federal Deposit Insurance Corporation, Federal Reserve Board, the Office of the Comptroller of the Currency, Farm Credit Administration and the National Credit Union Administration--collectively, "the Agencies"--have issued their final revisions to the Interagency Questions and Answers Regarding Flood Insurance (Q&As) to help financial institutions meet their responsibilities under federal flood insurance legislation and to increase public understanding of the flood insurance regulation. The revised Q&As contain guidance for agency personnel, financial institutions and the public. The Agencies also seek comment on five new proposed questions and answers.

To develop the current proposal, the Agencies proposed revisions to the existing Interagency Q&As in March 2008. Among the changes the Agencies proposed were the introduction of new questions and answers in a number of areas including second lien mortgages, the imposition of civil money penalties, and loan syndications/participations. The Agencies also propose substantive modifications to previous Q&As pertaining to construction loans and condominiums. Prior to the March 2008 proposal, the Q&As had not been revised since they were first issued in 1997. The revised Q&As supersede the existing Q&As and supplement other guidance and interpretations issued by the Agencies.

The final guidance includes 77 questions and answers, revised based on comments received. The Agencies are also proposing five new questions and answers for public comments. These Interagency Questions and Answers supersede the 1997 Interagency Questions and Answers and supplement other guidance or interpretations issued by the Agencies. The revised guidance will apply to any loan that is made, increased, renewed or extended on or after the effective date of the guidance document, which will be 60 days after publication in the Federal Register.

Highlights of the final Q&As include the following:

FLOOD INSURANCE REQUIREMENTS FOR RESIDENTIAL CONDOMINIUMS. The Agencies had previously provided supervisory guidance that stated that a Residential Condominium Building Association Policy (RCBAP) with coverage at 80 percent of replacement cost value was sufficient. The revised guidance will require lenders to obtain flood loss coverage at 100 percent of replacement cost. However, absent a loan refinance, increase, extension or renewal, lenders will not be required to ensure that RCBAP coverage is increased to 100 percent replacement cost on previously compliant loans made prior to the effective date of the new guidance.

AMOUNT OF FLOOD INSURANCE FOR JUNIOR LIENS. The final guidance clarifies steps junior lienholders should take in determining the appropriate amount of flood insurance when making, increasing, extending or renewing a second lien.

1. A junior lienholder should work with the borrower, senior lienholder, or both of these parties to determine how much flood insurance is needed to adequately cover the improved real estate collateral to the lesser of: the total outstanding principal balance on the junior lien and any senior loans; the maximum coverage available under the Act; or the insurable value of the structure.
2. The junior lienholder should also ensure that the borrower adds the junior lienholder's name as mortgagee/loss payee to an existing flood insurance policy.
3. The junior lienholder should obtain the borrower's consent in the loan agreement or otherwise for the junior lienholder to obtain information on balance and existing flood insurance coverage on senior lien loans from the senior lienholder.
4. During the life of the loan, when the lender increases, extends or renews the loan, the lender could also review the borrower's credit report to establish the outstanding balances of senior liens to aid in determining `how much flood insurance is necessary upon renewal of the junior lien.
5. Where the lender is unable to obtain information about the amount of flood insurance in place on the outstanding balance of a senior lien, the lender may presume that the amount of insurance coverage in place at the time the senior lien loan was made continues to be sufficient.

The July 21, 2009 Federal Register notice which explains the final and proposed questions and answers can be found at http://edocket.access.gpo.gov/2009/pdf/E9-17129.pdf. Comments on the proposed questions and answers are due by September 21, 2009.

Millions of Dollars Still Available through USDA Rural Development's Guaranteed Home Loan Program

Millions of Dollars Still Available through USDA Rural Development's Guaranteed Home Loan Program

Applications are Encouraged Prior to Sept. 30 Fiscal Year End to Ensure Timely Approval

Even with a record year that has seen more than $118 million in guaranteed home loans provided to rural Iowans, USDA Rural Development still has plenty of funds available as the end of the fiscal year quickly approaches on September 30.

Applications for guaranteed loans are encouraged prior to September 30 to ensure timely closing ability during the fiscal year transition of funds.

So far in 2009 USDA Rural Development has assisted nearly 2,200 families purchase homes in rural Iowa with guaranteed and direct loans, more than twice as many as the same time last year.

Also, guaranteed funds with interest credit are available through USDA Rural Development to assist with rehabilitation and building of apartment complexes in any of Iowa's 78 counties that were included in the August 26, 2008 federal disaster declaration (FEMA-1763-DR).

Approximately $8 million is available nationwide for this program. Applications will be accepted as long as funds remain available.

New and rehabilitated apartment complexes must be located in communities with fewer than 20,000 people to be eligible. When repairing facilities costs must be at least $6,500 per unit to result in "like new" condition. Eligible costs include building materials, as well as professional service fees, bond fees, developer's fees, land acquisition and development and financing costs.

Please contact your local USDA Rural Development area office for more information about any of the agency's programs. Feel free to call the state office at (515) 284-4666 or visit www.rurdev.usda.gov/ia if you are unsure of the area office serving your community.


ICMP Member Spotlight

ICMP Member Spotlight

Name: Linda Bessey
Company: Community Savings Bank
E-mail address: linda.bessy@csbiowa.com

Prime Times: Any final thoughts?
Response: We are in a constantly changing business. To be successful you have to be able to adapt to those changes and use those to the benefit of all the stakeholders in a transaction. Take charge of your own career and continuing education.

To remove yourself from this mailing list, click here.