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URLA Revisions

• Revised Uniform Residential Loan Application (URLA) • Now 7 pages in length w/ Spanish version available

• Interactive PDF w/ drop down boxes & calculation tools

• New “unmarried” addendum

• Incorporates HMDA 2018 revised applicant demographic info which must be collected starting Jan. 1, 2018

• Fannie provided sample purchase & refi app

• More info - https://www.fanniemae.com/singlefamily/uniform-residential-loan-application

https://www.fanniemae.com/singlefamily/uniform-residential-loan-applicationhttps://www.fanniemae.com/singlefamily/uniform-residential-loan-applicationhttps://www.fanniemae.com/singlefamily/uniform-residential-loan-applicationhttps://www.fanniemae.com/singlefamily/uniform-residential-loan-applicationhttps://www.fanniemae.com/singlefamily/uniform-residential-loan-applicationhttps://www.fanniemae.com/singlefamily/uniform-residential-loan-applicationhttps://www.fanniemae.com/singlefamily/uniform-residential-loan-application

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URLA Revisions • Approved by CFPB on Sept. 29th

• URLA deemed to be in compliance w/ Reg. B

• No plan to update Reg. B or OSC

• CFPB said creditors MAY as of Jan. 1, 2017:

• begin to use the form

• let borrowers self-select sub-aggregate ethnicity & race codes

• However, for 2017 HMDA reporting purposes, report aggregate ethnicity and race codes as they exist today

• Creditors may also wait until Jan. 1, 2018 to collect expanded data & use revised URLA

DOL Fiduciary Rule

• Effective – April 10, 2016

• Mandatory • April 10, 2017 – New definition of fiduciary

• January 1, 2018 – Best Interest Contract and Principal Transaction Exemption

• Intent: • Avoid Conflicts of Interest in providing investment advice

• Define/acknowledge “investment fiduciaries”

• Promote, educate and empower retirement investors when making retirement choices

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DOL Fiduciary Rule

• Fiduciary Advisor – person giving investment advice

• Covered Investment Advice

• Recommendation for fee or other compensation

• Advising customer to buy, hold, sell, exchange securities or other investment property

• Includes securities or property rolled over, transferred, or distributed from a plan or IRA

DOL Fiduciary Rule

• Not Investment Advice • Education – options available without customizing

• General Communication:

• Newsletters

• Commentary in publicly broadcast talk shows

• Speeches at conferences

• Research or news reports prepared for general distribution

• General marketing materials

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DOL Fiduciary Rule

• Exemptions

• Principal Transaction Exemption (Sales or Hire Me)

• Allows an exemption if selling own products

• Adhere to impartial conduct standards (best interest)

• Avoid misleading statements

• No compensation that is not in best interest

DOL Fiduciary Rule • Exemptions

• BICE – Best Interest Contract Exemption

• Requires bank to have best interest of customers in mind when providing investment advice

• Cannot steer investor to product based on compensation

• Avoid making misleading statements

• Contract required

– Acknowledges “fiduciary” status

– Full and fair disclosure of important information (material conflicts of interest, fees, charges, compensation, etc.)

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DOL Fiduciary Rule

• Impact of Rule

• Prohibited Transactions – if non-compliant

• Advertisements – more customized, greater possibility it becomes advice

• Sales Activities

• Initial Purchase

• Rollover, transfer, distribution

DOL Fiduciary Rule • Policies and Procedures

• Mitigate harmful impacts of conflicts of interest

• Basic info on any conflicts of interest

• Cost of advice

• Website

• Business Model

• Material Conflicts of Interest – third party arrangements

• Written description of policies and procedures that mitigate conflicts of interest

• Disclosure of compensation and incentive arrangements with advisors

• Etc.

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2016 Mortgage Servicing Rule

• Revisions applicable to ALL Servicers

• Successors in Interest • Persons to whom an ownership interest is transferred by

means detailed in rule including:

– Transfers resulting from the death of the borrower

– Transfers to the borrower’s spouse or children

– Transfers resulting from divorce

• Servicer must treat Successor in Interest as “borrower” for servicing purposes even if they are not obligated on debt

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2016 Mortgage Servicing Rule

• Revisions applicable to ALL Servicers

• Delinquency • A period of time during which a borrower’s mortgage loan

obligation is delinquent (unpaid)

• Delinquency period begins on the date a periodic payment sufficient to cover principal, interest, and (if applicable) escrow becomes due and unpaid, until such time as no periodic payment is past due and unpaid.

– Regardless of whether or not a late fee will be assessed

2016 Mortgage Servicing Rule

• Delinquency Example • Borrower’s loan requires payments on the

1st each month

• A late fee will not be assess if payment is made by the 15th of the month

• Borrower fails to make the Jan. 1st payment, the period of delinquency begins on Jan. 2nd, not Jan. 16th

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2016 Mortgage Servicing Rule • Rolling Delinquencies

• If a servicer applies a borrower’s payment to the oldest outstanding periodic payment, must advance the date that the delinquency began

• Example

• Payment due 1st of each month & borrower doesn’t pay

• On Jan. 31, borrower is 30 days past due

• On Feb. 3 borrower makes payment and servicer applies to Jan. 1 payment

• On Feb. 4, borrower is 3 days past due

2016 Mortgage Servicing Rule

• Delinquency under other mortgage provisions

• E.g., failure to maintain insurance or pay taxes

• NOT covered by this servicing rule

• Servicer may act based on rights outlined in mortgage loan contract and applicable state law

• Servicer may “accelerate” loan for these defaults according to mortgage loan contract

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2016 Mortgage Servicing Rule

• CFPB Resource

• Factsheet on Delinquency & 2016 Mortgage Servicing Rule

• http://www.consumerfinance.gov/policy-compliance/guidance/implementation-guidance/mortserv/

• 8 pages

2016 Mortgage Servicing Rule • Revisions applicable to ALL Servicers

• Loss Mitigation

• Reg. X prohibits “first notice of filing” for foreclosure until borrower is more than 120 days past due

• Iowa cure notice is NOT “first notice of filing”

• New exception to rule: servicer may join either a superior or subordinate lienholder's foreclosure action even if borrower is NOT delinquent w/ servicer

– Previously, only permitted on subordinate lien

http://www.consumerfinance.gov/policy-compliance/guidance/implementation-guidance/mortserv/http://www.consumerfinance.gov/policy-compliance/guidance/implementation-guidance/mortserv/http://www.consumerfinance.gov/policy-compliance/guidance/implementation-guidance/mortserv/http://www.consumerfinance.gov/policy-compliance/guidance/implementation-guidance/mortserv/http://www.consumerfinance.gov/policy-compliance/guidance/implementation-guidance/mortserv/http://www.consumerfinance.gov/policy-compliance/guidance/implementation-guidance/mortserv/http://www.consumerfinance.gov/policy-compliance/guidance/implementation-guidance/mortserv/

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2016 Mortgage Servicing Rule

• Revisions applicable to ALL Servicers

• Force-Placed (FP) Hazard Insurance

• Reg. X requires servicer to have “reasonable basis” to believe borrower failed to maintain property insurance before charging for FP policy

• Requires initial and reminder notice

• Rule revises disclosures & model forms to cover situations where insurance is insufficient

• Permits loan number on FP notices

2016 Mortgage Servicing Rule • Revisions applicable to ALL Servicers

• Prompt Payment Crediting

• Existing general rule: Credit payments as of date of receipt, unless delay in crediting does not result in additional charge to consumer or negative reporting to CRA

• Revisions: Payments made during mitigation program must continue to be credited according to loan contract

– Payments made per a permanent modification, must be credited under the terms of the permanent agreement

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2016 Mortgage Servicing Rule

• Definition of Small Servicer • A servicer that, together with any affiliates, services 5,000 or

fewer mortgage loans for which the servicer (or an affiliate) is the creditor or assignee

• New clarification:

• Exclude from 5,000 count seller-financed transactions and mortgage loans voluntarily serviced at no charge for a non-affiliate, even if the non-affiliate is not a creditor or assignee

2016 Mortgage Servicing Rule

Small Servicer are exempt from:

• Periodic statement

requirements

• Prohibition on force-placing

when escrow account exists

• General servicing policies,

procedures & requirements

• Early intervention provisions

• Continuity of contact provisions

for early foreclosure

intervention

• Some loss mitigation

provisions

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2016 Mortgage Servicing Rule

• Additional LARGE SERVICER Changes • Reg. X Loss Mitigation provision changes

• Servicers could have to meet loss mitigation requirements more than once if borrower is past due, then current, etc.

• Conditions under which foreclosure judgment can be pursued

• Required responses to complete loss mitigation applications

• Periodic Statement changes

• Modified statements for borrowers in bankruptcy

• Not statements for charged off loans if no additional fees or interest will be charged

2016 Mortgage Servicing

• CFPB Mortgage Servicing Website Resources

• http://www.consumerfinance.gov/policy-compliance/guidance/implementation-guidance/mortserv/

• Executive Summary

• Small Servicer Key Provisions

• Effective Dates

• Most provisions - Oct. 19, 2017

• Successor in Interest & Periodic Stmts – April 19, 2018

http://www.consumerfinance.gov/policy-compliance/guidance/implementation-guidance/mortserv/http://www.consumerfinance.gov/policy-compliance/guidance/implementation-guidance/mortserv/http://www.consumerfinance.gov/policy-compliance/guidance/implementation-guidance/mortserv/http://www.consumerfinance.gov/policy-compliance/guidance/implementation-guidance/mortserv/http://www.consumerfinance.gov/policy-compliance/guidance/implementation-guidance/mortserv/

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And don’t forget…

MLO NMLS Annual Renewal • Nov. 1 – Dec. 31 • See NMLS Resource Center for

details • http://mortgage.nationwidelicen

singsystem.org/slr/common/renewals/Pages/default.aspx

Before we go…

Updated IBA ON-DEMAND webinars

• MLO/LO Annual Training • 2017 Annual Training Requirements - Lending • 2017 Annual Training Requirements - Deposit

http://www.iowabankers.com/aspx/iba/education.aspx?snid=39

http://mortgage.nationwidelicensingsystem.org/slr/common/renewals/Pages/default.aspxhttp://mortgage.nationwidelicensingsystem.org/slr/common/renewals/Pages/default.aspxhttp://mortgage.nationwidelicensingsystem.org/slr/common/renewals/Pages/default.aspxhttp://www.iowabankers.com/aspx/iba/education.aspx?snid=39

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Send your Compliance questions to:

compliance@iowabankers.com

Or call: 844-734-7411

(844-REGS-411)

Julie Gliha, MBA, CRCM jgliha@iowabankers.com Ronette Schlatter, CRCM rschlatter@iowabankers.com

mailto:compliance@iowabankers.commailto:jgliha@iowabankers.commailto:rschlatter@iowabankers.com