Compliance Updates

December: Weekly Compliance Updates

Did You Know Series: FHA Announced Model Form Changes in Response to CFPB QM/ATR

December 26, 2014

The Federal Housing Administration (FHA) announced several changes to forms and model mortgage documents that accompany two final rules published in August that were passed to align FHA-insured mortgages with the Consumer Financial Protection Bureau’s (CFPB) Ability-to-Repay (ATR) and Qualified Mortgage (QM) standards—part of the Truth in Lending Act (Regulation Z).

FHA previously published two new final rules in August 2014 that addressed the need to change how prepayments are handled and how look-back periods are being changed to 45 days. The changes to their model forms comply with these new FHA final rules.

TRID Hot Topic Series: Update on MBA’s List of Top 20 Issues

December 19, 2014

IDS has been addressing a different topic from the MBA List of Top 20 Issues related to TRID implementation through these weekly IDS General Updates. On October 3, 2014, IDS published this list and marked each of the topics that had been covered up to that point. The following is an updated list of which topics have been covered as of December 19, 2014. Remember, the Resources website can be searched for any of the addressed topics. (Previously addressed topics are bold).

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TRID Hot Topic Series: Fees with Limited Dedicated Lines on the Loan Estimate and Closing Disclosures

December 12, 2014

§ 1026.37 is the section of the TRID rule dedicated to preparing the Loan Estimate (LE). 37(f)(1) and (2) of the TRID rule refer to the subsections on the second page of the LE titled “A. Origination Charges” and “B. Services You Cannot Shop For,” respectively. Per the second romanette in each of these sections, the total number of lines dedicated will be a maximum of thirteen. § 1026.37(f)(6), entitled “Use of Addenda,” limits itemization for these sections to just the number of lines available, which means that no addenda will be allowed even if a creditor has more than 13 items to list. For these two sections, the itemization will be truncated at 12 lines, the 13th line will be labeled “Additional Charges,” and the 13th line will have an aggregate of all additional charges that could not be listed due to space restrictions. The whole second column of page two of the LE works the same way. Cf., 1026.37(g)(8).

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TRID Hot Topic Series: “Good Faith” and “Best Information Reasonably Available” Standards

December 5, 2014

What used to be called “Good Faith Estimate” (GFE) will now be known as just “Loan Estimate.” The name “Good Faith Estimate” shows the previous focus on creditors to perform a good faith analysis of fees charged. As the term “good faith” is technical jargon, legal in nature and not readily understood by the majority of consumer, the name “Loan Estimate” shows the current focus on helping consumers to understand and analyze the fees charged by creditors. Even though the name and appearance of the form has changed to the benefit of consumers, the rule still requires a good faith analysis by creditors.

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