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SEPTEMBER 2013

THE INFORMERTHE INFORMERTHE INFORMER Compliance and Regulatory News

October 2013

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IN THIS ISSUEIN THIS ISSUEIN THIS ISSUE

4 CFPB: ARE YOU READY? 5 INDUSTRY NEWS

5 Proposed Risk Retention Rule 5 FHA’s Oversight of Fannie Mae’s 2013 Settlement with Bank of America

7 CFPB issues Final Ruling 7 HUD Proposed Rule 7 FNMA Servicing Notice 9 FHFA Launches National Education Campaign 9 NJ Flood Insurance Premiums Rising 11 Banks Abandon Mortgage Preapprovals

10 Meet Bunk Wurth

THE INFORMERTHE INFORMERTHE INFORMER NEWS TO HELP INDUSTRY EXPERTS CREATE A STRATEGIC METHOD TO

ACCOMMODATE NEW REGULATORY COMPLIANCE REQUIREMENTS

A publication of ELM Services, LLC. Follow us on:

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Our Company

ELM Services, LLC (ELMS) was formed by a group of accomplished, well-respected leaders in the mortgage in-

dustry to provide a broad range of solutions to meet your needs. The principals and consultants of ELMS have an

average of 20 years of experience in their chosen fields derived from executive positions in several private and

public companies including: Goldman Sachs, Fannie Mae, FDIC, GE, First American Corporation, Bank of Ameri-

ca, WAMU, Ocwen, and others. ELMS is dedicated to the needs of the mortgage industry, and we pride ourselves

on our ability to provide world-class subject matter expertise in the areas of Foreclosure Claims Management,

Credit Risk Solutions, Due Diligence and Technology Solutions. By combining a rare blend of experience, compe-

tencies and unparalleled service, ELMS has the capability to fully understand your business and the skill set to

craft the best results for your firm.

Our Mission

At ELMS, our mission is to provide state of the art Single Source Risk Management solutions which in turn allow our

clients to maximize profits while minimizing risks.

Our Core Values

At ELMS, these are the words we live by: Integrity. Quality. Leadership.

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2014 CFPB Changes

INDUSTRY UPDATE Did you know that the Mortgage Bankers Association has a New Brand, New Logo and a New Street Address? Go to www.mba.org & update your records today!

The Mortgage Servicing Industry will experience major changes as a result of

CFPB rulings beginning January 2014. Are you Ready?

Effective January 10, 2014

Qualified Mortgage/Ability to Repay Rule Loan Originator Compensation TILA HPML Appraisals ECOA Valuations Escrows 2013 HOEPA Rule Servicing TILA Servicing RESPA

Effective March 18, 2014 Disparate Impact Rule

Do you need assistance with understanding and preparing for these changes?

ELMS Services, LLC has knowledgeable staff available to help your

company prepare for these industry changes.

Contact Elm Services LLC for more information 1-877-303-3567 (ELMS)

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Agencies Request Comment on Proposed

Risk Retention Rule (2013-287)

This risk retention reproposal

is being issued jointly by the Board of Governors of the Fed-eral Reserve System, the De-partment of Housing and Urban Development, the Federal De-posit Insurance Corporation, the Federal Housing Finance Agen-cy, the Office of the Comptroller of the Currency, and the Securi-ties and Exchange Commission, in coordination with the Secre-tary of the Treasury. The origi-nal Dodd-Frank proposal gener-ally measured compliance with the risk retention requirements

based on the par value of secu-rities issued in a securitization transaction and included a so-called premium capture provi-sion. The agencies are now pro-posing that risk retention gener-ally be based on fair value measurements without a premi-um capture provision. The new proposal equates Qual-ified Residential Mortgage (QRM) to the definition of a Qualified Mortgage (QM), as de-fined under the rule that the CFPB recently finalized. Securit-izations of QRMs are exempt from risk retention. The QM rule does not include underwrit-ing based on credit history, LTV, or down payment. It does in-clude an analysis of the bor-

rower’s ability to repay, with a maximum DTI of 43 percent. In addition, the QM definition pro-hibits some types of loans and certain loan features, such as interest-only loans, balloon pay-ments, or negatively amortizing loans. QM allows exceptions for rural lenders or small lenders, and allows loans that meet GSE underwriting standards to quali-fy for QM status, even with DTIs above 43 percent. The agencies are requesting comment on the revised pro-posed rule by October 30, 2013. Full News Release: http://www.sec.gov/News/

PressRelease/Detail/PressRe-

FHFA Office of Inspector General Evaluation Re-

port: FHA’s Oversight of Fannie Mae’s 2013 Set-tlement with Bank of America (2013-288)

The Office of Inspector Gen-

eral (OIG) reviewed FHFA’s ap-proved $11.6 billion settlement between Fannie Mae and Bank of America. Their findings in-clude that the FHFA should de-velop a standardized review pro-cess for compensatory fee set-tlements and mortgage servic-

ing rights transfers. In addition, the FHFA should engage policy and supervision staff earlier in the approval process and link checklists to documentation showing the applicable require-ments were satisfied. The FHFA has

agreed to enact OIG’s recom-mendations by January 31, 2013. Full News Release: http://

fhfaoig.gov/Content/Files/EVL-2013-009.pdf

INDUSTRY NEWS

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Get the attention of the Mortgage Servicing Industry at Reasonable Rates!

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About Anchor Risk Management, LLC.

Anchor Risk Management, LLC. was formed by a group of accomplished, well-respected leaders in the

mortgage and technology industry to create a new paradigm in Default Mortgage solutions and Cloud-

based Workflow applications. The principals and consultants of Anchor have an average of 20 years of

experience in their chosen fields derived from executive positions in several private and public compa-

nies including: Goldman Sachs, Fannie Mae, FDIC, GE, First American Corporation, Bank of America,

WAMU, Ocwen, and others.

Introducing our Cloud-based Claims Management System!

Anchor Risk Management, LLC. Is proud to announce the availability of our Claims Management System . Key

features of the system are:

Cloud-based Claims Processing system – eliminates the need for any software or hardware purchase or internal implementation

Configurable Workflow – allows for customization of process to match internal process flows

Role Based Dashboard Configuration lets you decide what functions and maintenance utilities are available for each user

Role-based security model allowing tiered access to all steps within customized workflow

Edit checks and customizable business rules to provide high data accuracy rates

Compliance notifications and messaging so processors stay up to date on regulations

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The Bureau of Consumer

Financial Protection (CFPB) issued a final rule under the Equal

Credit Opportunity Act, Real Estate Settlement Procedures Act, and the

Truth in Lending Act amending and clarifying its January 2013 mort-

gage rules.

Topics in the rule include:

Clarifying the scope of activ-

ities prohibited during the 120-day ban on foreclosure referral.

Addressing the process for

correcting mistakes that may occur when servicers perform initial

completeness evaluations of loss mitigation applications, but later discover the appli-cation

was incomplete. Facilitating the ability of ser-

vicers to offer short-term forbearance plans.

Clarifying the definition of a

loan originator. Facilitating lending by cer-

tain small creditors, includ-ing those predominantly op-erating in rural or under-served areas.

Clarifying application of the

prohibition on creditors fi-nancing credit insurance premiums.

Slightly revising effective

dates of several provisions of the Loan Originator rule.

Full News Release: http://files.consumerfinance.gov/

HUD Proposed Rule: Housing Counseling

Program: New Certification

Requirements

HUD's Housing Counseling

Program provides, through HUD-approved counseling agencies and state housing finance agen-cies, including their affiliates and branches, counseling to in-dividuals seeking information about financing, maintaining,

renting, or owning a home. The Dodd-Frank Wall Street Re-form and Consumer Protection Act amended the housing coun-seling statute to improve the effectiveness of the program by, among other things, requir-ing that the entities and individ-ual counselors be certified by HUD as competent to provide such services, and prohibiting distribution of grant funds to agencies found in violation of Federal election laws or who have employees found in viola-

tion of Federal election laws, and requiring the reimburse-ment of grant funds for misuse of funds. This proposed rule would revise HUD's Housing Counseling Pro-gram regulations to adopt the new requirements applicable to counseling agencies and individ-ual counselors, and the use of grant funds.

Full News Release: https://

www.federalregister.gov/articles/2013/09/13/2013-

FNMA Servicing Notice: Updates to Allowable Foreclosure Time Frames

Fannie Mae is adjusting the maximum number of allowable days for routine foreclosure proceedings

for three states (Nevada, Washington, and New Mexico), effective for foreclosure sales on or after September 1, 2013.

Full Foreclosure Timetable: https://www.fanniemae.com/content/guide_exhibit/foreclosure-timeframes-compensatory-fees-allowable-delays.pdf

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Martin, Leigh, Laws & Fritzlen P.C.

Banking and

Creditors’ Rights

Litigation

Corporate and

Business Law

Real Estate

Transactions

Kansas City

1044 Main Street, Suite 900

Kansas City, MO 64105

Tele: 816.221.1430

Fax: 816.221.1044

St. Louis 16305 Swingley Ridge Road, Suite 350

Chesterfield, MO 63017

Tele: 636.534.7600

Fax: 636.534.5520

Overland Park

6800 West 64th Street Overland Park, KS 66202

Tele: 913.671.3464

Fax: 816.221.1044

http://www.mllfpc.com/

What was the first law passed by the U.S. Senate in 1779?

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FHFA Launches National

Education Campaign

Federal Housing Finance Agen-

cy (FHFA) launched a nation-wide campaign to inform home-owners about the Home Afforda-ble Refinance Program (HARP).

The campaign is designed to en-courage homeowners to contact

their current lender or any other mortgage lender offering HARP refinances to review their refi-nancing Options.

Borrowers affected are those that have been making their mortgage payments but owe more on their home than it’s worth.

As part of this campaign, FHFA has launched a new website, www.HARP.gov, and is working

with mortgage companies across the U.S. and HGTV personality and star of "Power Broker" Mike Aubrey to help reach homeown-ers who may qualify.

Full News Release: http://w w w . b l o o m b e r g . c o m /a r t i c l e / 2 0 1 3 - 0 9 - 2 3 /av0TUA9Jxw4E.html

NJ Flood Insurance Premiums Rising

If you are a resident of New Jersey, and you own

a property that is located in a mandatory flood zone, you could soon see an increase of 25% in flood insurance premium's. In July 2012, Congress passed the Biggert-Waters Flood Insurance Reform Act of 2012. This act called on FEMA (Federal Emergency Management Act), to make changes to the way NFIP is run. The following are key provisions of the legislation: Raise rates to reflect “true flood risk”, Make the program more financially stable, Change how Flood Insurance Rate Map (FIRM)

updates impact policyholder For Full Details, along with Q &A about this reform act visit: http://www.fema.gov/flood-insurance-

reform-act-2012 Watch the video below from the Flood Insurance Forum that explains the history of NFIP and also provides details on the premium changes that will be phased in beginning 2013: http://youtu.be/tpeqSQr3ngY

The OATH ACT http://www.senate.gov/artandhistory/history/minute/The_Senates_First_Act_-

_The_Oath_Act.htm The_Senates_First_Act_-_The_Oath_Act.htm

THE INFORMER A Publication of ELM Services, LLC.

Corporate Offices: 10801 Mastin Boulevard. Suite 600

Overland Park, KS 66210

1-877-303-ELMS

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STRENGTHSTRENGTHSTRENGTH SURVIVALSURVIVALSURVIVAL LOVELOVELOVE

Meet Bunk Wurth!Meet Bunk Wurth!Meet Bunk Wurth!

Alec (Bunk) Wurth grew up in Orange, California. At 36,

Bunk was an excellent and dedicated special education teacher,

a strong athlete, a committed friend, and a devoted son and

brother.

Bunk sustained a serious spinal cord injury while playing in a

rugby match on February 25, 2006 in Southern California. The

C4 and C5 vertebrae were dislocated into his spine, and he im-

mediately lost all movement and sensation from the shoulders

down. Initially, Bunk was able to move his shoulders and

breathe on his own; however, since the surgical repair to the

vertebrae and in the weeks following the injury, bruising elevat-

ed up the spine to the C2 level, which is currently rendering him

unable to breathe on his own and dependent on a ventila-

tor. Family, friends, and especially Bunk are confident that

through his hard work and determination, the unconditional

support of his family and friends, a strong faith, sincere prayers

and modern medicine, Bunk will recover. Bunk has never fal-

tered in maintaining the clear vision of his full recovery and

healing.

Through this ordeal Bunk has proven to be an inspiration to

everyone around him. Around the age of 15 or 16, Bunk took

an interest in painting the American Flag. The accident and his

inability to walk did not discourage him from continuing with

this gift that he shares with students at the Speech and

Language Development Center in Buena Park, a school for

young adults with language and behavioral disorders.

Wurth did not let his injury stop him from painting. He current-

ly cannot use his hands to paint, so he paints with a tool de-

signed for him to guide a paintbrush with his mouth.

For more information about the work that Bunk Wurth offers

to the world, watch this video from Fox News:

http://youtu.be/TYadVuec_Do

Visit his website at:

WWW.BUNKWURTH.ORG

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Banks Abandon Mortgage Preapprovals.

What the decline of preapprovals means for

homebuyers

Mortgage preapprovals re-

assure prospective home own-ers that the American dream is r e a c h a b l e . According to research provided by Anamaria Aandriotis of Dow Jones to Mortgage Watch , “ Preapprovals accounted for 4% of purchase mortgages

that were originated by these lenders last year, down from 9% in 2007”. Housing experts, however, say the decline in preapprovals is largely due to dwindling compe-tition among mortgage lenders for new clients. “Prior to the recession, lenders used preapprovals as way to attract would-be borrowers. Buyers who had this commit-ment from a lender were more likely to turn to this company when they were ready to get the actual mortgage, “ says Keith Gumbinger, Vice Presi-

dent at mortgage-info site HSH.com. Based on information provided in this report a more detailed pre-qualification provides a “conditional approval” in the home buying process. This process is more common, alt-hough there is no written com-mitment, it allows the borrower to know where they stand in homeownership. Full News Release: http://www.marketwatch.com/story/banks-abandon-mortgage-preapprovals-2013-10-02

THE INFORMER A Publication of ELM Services, LLC.

Corporate Offices:

10801 Mastin Boulevard, Suite 600 Overland Park, KS 66210

1-877-303-ELMS

www.elmservices.com

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