Leadership and Vision in Mortgage

Leadership and Vision in Mortgage

IMA Annual Convention
September 1-3, 2010 - Downtown Des Moines Marriott

In today's ever-changing market, the mortgage industry depends on leadership and vision. To be successful you need to use your leadership skills to seek out the new opportunities in the mortgage industry - with clients, co-workers and your peers across the industry. For over 50 years, the Iowa Mortgage Association has helped members by providing leadership and vision, promoting the industry and continually striving to meet the needs of our diverse membership.

The Iowa Mortgage Association is proud to present the 57th Annual Convention. Designed to help you become more knowledgeable about the mortgage industry and increase your awareness about pressing issues, the convention is a must for any mortgage professional. This year's event has sessions on business leveraging influence in a high-speed world, credit scoring, marketing with social networking, an economic update 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 1 - Golf Outing at Legacy Golf Course in Norwalk
• September 2-3 - Convention at Downtown Des Moines Marriott

To increase your vision in the mortgage industry, advance your career and profession, register today!

The Mortgage Bankers Association has prepared a summary of the bill. The Iowa Mortgage Association will continue to keep IMA members informed on the impact of the legislation.

New Income and Purchase Price Limits

New Income and Purchase Price Limits
The Iowa Finance Authority (IFA) now has the 2010 income limits and purchase prices for IFA's single-family programs. Lenders may easily view the new eligibility criteria for the counties they serve using the lender eligibility tool, or a comprehensive list is available here. You may request a supply of flyers for home buyers that reflects these changes.

Key changes:

• FirstHome Non-Targeted purchase price is now $243,000
• FirstHome Plus household income limit is now $49,900
• FirstHome and Homes for Iowans have the same county household income limit

The home buyer may select a lender that participates in IFA's homeownership programs or a facilitating lender. A facilitating lender does not participate in IFA's homeownership programs but obtains approval from IFA to offer the Military Homeownership Program assistance with qualifying mortgage options. Full details of this change are outlined here. Please contact us with any questions about this change.

House Passes Flood Insurance Bill

House Passes Flood Insurance Bill
On July 15, the House passed legislation (H.R. 5114) that would reauthorize the National Flood Insurance Program for five years, through fiscal year 2015, while making several changes to the program. The Senate must still consider the legislation, which would create a new risk-rate schedule for homeowners in newly-designated special flood-hazard areas, phased in over five years. Homeowners in those areas would have to purchase flood insurance in five years. The legislation also would increase the program's coverage limits and allow premium increases of up to 20 percent annually. The flood insurance program is currently authorized through September.

Existing-Home Sales Slow in June, Housing Starts Fall 5 Percent

Existing-Home Sales Slow in June, Housing Starts Fall 5 Percent
With the scheduled closing deadline for the home buyer tax credits, existing-home sales slowed in June but remained at relatively-elevated levels, according to a July 22 report from the National Association of Realtors (NAR). Existing home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, fell 5.1 percent to a seasonally-adjusted annual rate of 5.37 million units in June from 5.66 million in May, but are 9.8 percent higher than the 4.89 million-unit pace in June 2009.

NAR chief economist Lawrence Yun said the market shows uncharacteristic yet understandable swings as buyers responded to the tax credits. "June home sales still reflect a tax credit impact with some sales not closed due to delays, which will show up in the next two months," he said. "Broadly speaking, sales closed after the home buyer tax credit will be significantly lower compared to the credit-induced spring surge. Only when jobs are created at a sufficient pace will home sales return to sustainable healthy levels."

Meanwhile, a June 20 report released by the Commerce Department's Census Bureau and the Department of Housing and Urban Development (HUD) showed that housing starts fell 5.0 percent in June to a seasonally adjusted annual rate of 549,000 units, the largest decline since October 2009. Permits for new construction, however, rose 2.1 percent, signaling future improvement.

Congress Extends Deadline for Homebuyer Tax Credit

Congress Extends Deadline for Homebuyer Tax Credit

On June 30, Congress approved an extension to the June 30 deadline for the federal homebuyer tax credit. The extension gives home buyers until Sept. 30 to finish qualifying for federal tax incentives of up to $8,000. Homebuyers must meet the required deadlines to be eligible to claim the credit. Homebuyers must have purchased - or entered into a binding contract to buy - a principal residence on or before April 30, 2010. If a homebuyer entered into a binding contract by April 30, 2010, he/she must close on the home on or before Sept. 30, 2010. Click here for more information from the IRS.

Fannie Mae 1003 Update

Fannie Mae 1003 Update
Lenders selling loans to Fannie Mae (or Fannie Mae investors) are reminded the revised 1003 Uniform Residential Loan Application must be used for all applicable loan applications taken on or after July 1, 2010. The new form was originally slated to be effective Jan. 1, 2010, but was subsequently delayed until July 1, 2010. The new form can be found on Fannie Mae's website here.

The revised 1003 includes a place for mortgage loan originators (MLOs) to include their "Loan Originator Identifier." This number will be assigned by the Nationwide Mortgage Licensing System and Registry (NMLSR) once it is functional. All MLOs must register on the NMLSR as required by the SAFE Act.

Lenders originating loans and retaining the loans within their own loan portfolio are not covered by this Fannie Mae requirement.

FinCEN Releases Analysis of Foreclosure Rescue Scams

FinCEN Releases Analysis of Foreclosure Rescue Scams
The Financial Crimes Enforcement Network (FinCEN) released its first analysis of suspicious activity reports (SARs) containing information about potential foreclosure rescue scams. The report, "Loan Modification and Foreclosure Rescue Scams - Evolving Trends and Patterns in Bank Secrecy Act Reporting," involved an analysis of more than 3,500 SARs filed from 2004 through 2009, of which the great majority, 3,000, were filed last year. The report can be found on FinCEN's website here. Additionally, FinCEN provided updated guidance (found here) to the financial industry concerning new scam techniques that financial professionals should watch for and report.

In addition to the increase in reported activity, the analysis shows that the nature of foreclosure rescue scams shifted during the period examined in the study. Early SARs containing information about loan modification/foreclosure rescue scams identified subjects purporting to be loan modification or foreclosure rescue specialists. These subjects targeted financially troubled homeowners with promises of assistance. The scams involved the homeowners signing quit claim deeds and resulted in loss of equity in or title to their property. The scammers used straw borrowers, who misrepresented income, employment, or occupancy, or provided other fraudulent information to deceive a new lender into making a new mortgage loan.

The scams described in later SARs and analyzed in this report, reflect an evolution into advance fee schemes, in which purported loan modification or foreclosure rescue specialists promised to arrange modification of a homeowner's mortgage for more favorable repayment terms. Following receipt of large advance fees, scammers rarely, if ever, provided any service. A variation of the advance fee scam involved phony debt elimination programs in which the homeowners paid advance fees and were given bogus documents, or were instructed to contact their lenders with false assertions that the original mortgage debt was illegal.

Bank Groups Meet with DOL to Discuss Impact of Interpretive Letter

Bank Groups Meet with DOL to Discuss Impact of Interpretive Letter
On July 8, the American Bankers Association (ABA) and other financial trade associations met with Department of Labor (DOL) officials to discuss the March 24 interpretive letter covering loan originators. In that letter, DOL's Wage and Hour Division ruled that typical mortgage loan officers do not meet the "administrative exemption" under the Fair Labor Standards Act (FLSA), and are therefore subject to overtime compensation requirements.

In the meeting, the trade groups explained to DOL officials that the March 24th letter constitutes a considerable and abrupt change in DOL policy, and will have widespread impact on all mortgage lending operations. Industry representatives pointed out a number of shortcomings in the DOL letter, and noted that where far-reaching regulatory changes are promulgated, stakeholders must be consulted and granted adequate opportunity to comment on the rule changes. Industry representatives also stressed the need for adequate implementation periods.

DOL officials agreed to further consider the industry's arguments concerning mortgage loan officers, but declined to rescind the letter or delay the opinion's immediate effective date. The Department expressed that it will continue to issue "Administrator Interpretations" that will set forth general interpretations of labor law and regulations. DOL staff stressed that the general policy they would apply across the board is that if an employee's primary duties involve sales, or are in "direct support of sales," the employee cannot qualify for the "administrative" exemption.

ABA said it will continue to meet with DOL and continue to push for a proper resolution regarding the status of mortgage loan officers. In the meantime, all banks must be diligent in reviewing their current classifications and compensation arrangements with mortgage loan officers to ensure proper compliance with the DOL March 24th ruling.

The DOL's previous opinion (issued in September 2006) that mortgage loan officers may qualify for FLSA's administrative exemption is now rescinded, and compensation policies pertaining to employees who perform the typical job duties of mortgage loan officers must, therefore, be reviewed on a case-by-case basis to conform to the new policies outlined in the March 24th letter.

USDA Rural Development's Farm Labor Housing Program

USDA Rural Development's Farm Labor Housing Program

Despite a funding shortage with its guaranteed home loan program, USDA Rural Development has awarded $143 million in guaranteed loans to help more than 1,500 Iowa families achieve their dream of homeownership in 2010.

In the history of the program, only once, in 2009, has USDA assisted more lenders and families in Iowa. Even though funds are exhausted, conditional commitments are being issued subject to available funding.

Providing guaranteed loans to homeowners isn't the only program available from USDA Rural Development to provide rural Iowans with access to quality housing. The agency's Farm Labor Housing program offers direct loans as low as 1 percent interest to farmer-owners, family farm partnerships, family farm corporations, or packing plants.

Iowa farm operators annually spend around $500 million in hired labor expenses, according to data collected by USDA's National Agricultural Statistics Service in a recent census. The census also indicates there are more than 70,000 hired farm workers in the state.

One way producers can make their businesses an attractive place to work is to offer safe and reliable housing opportunities for laborers and their families. This helps employees feel settled in the area and gives them a chance to become active members in the community.

A wide range of single-family and apartment-style housing opportunities are eligible for financing through this program. Funds can be used to buy or build a new living facility or improve and repair an existing structure. Eligible uses of funds include purchasing or improving land where the facility will be located, or other improvements such as new appliances. Housing units can be located on the farm or in a nearby community.

If you know a producer who would benefit from this Farm Labor Housing program, or for more information about USDA Rural Development's 12 other guaranteed loan, direct loan and/or grant housing programs, please call (515) 284-4666 or visit www.rurdev.usda.gov/ia.

IMA Member Spotlight: Kandes R. Dalbey

IMA Member Spotlight: Kandes R. Dalbey

Kandes R. Dalbey
Vice President, HLC Branch Coordinator
MidWestOne Bank
kdalbey@midwestone.com

Prime Times: What other goals in your career would you like to accomplish?
Response: I would like to pursue the ICMP designation this fall and to pursue a more active role in the Iowa Mortgage Association. Someday I would also like to work on obtaining my Master's in Business.

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