These PPT slides are for students who are studying to pass the NationalLoan Originator Licensing Exam with Uniform State Component, and are students of Jillayne Schlicke, CE Forward, Inc.
The document contains a review test with 56 multiple choice questions covering various topics in mortgage lending such as loan applications, appraisals, income and debt calculations, flood insurance requirements, and compliance with laws such as the Truth in Lending Act and Equal Credit Opportunity Act. The questions test knowledge of key terms, ratios, and guidelines used in the origination and underwriting process.
This document provides an overview of a 20-hour mortgage licensing course. It covers several key sections:
1. The national mortgage licensing exam costs $92, takes 2.5 hours, has 100 multiple choice questions including 10 sample questions, requires a 75% score to pass, and provides feedback on strong and weak areas.
2. The exam tests on federal law (35%), general mortgage knowledge (25%), loan origination (25%), and ethics (15%).
3. The document reviews important concepts like underwriting ratios, documentation requirements, title insurance, non-traditional lending guidelines, fiduciary duties, fair housing laws, consumer protection, and mortgage fraud.
4. Key laws covered include
The document provides an overview of a presentation on preparing for the mortgage loan originator exam. It discusses the exam process, including registering online, paying fees, and scheduling the national and state exams. It also reviews strategies for taking multiple choice exams and covers sample exam topics, such as laws governing lending practices like the Truth in Lending Act and Equal Credit Opportunity Act.
Step by step process to buying a home. Everything you need to know from making the offer, to getting the proper inspections, the paperwork, and closing process.
Mike Hall
Http://www.myohiohouse.com
614-937-4162
Homebuyer seminar - Everything you need to know to purchase your homefvcollins
This document provides information about a first time homebuyers seminar. It covers topics like why buy a home, being ready to buy, types of homes, understanding loans and financing options, the home buying process, and closing on a home purchase. The seminar is intended to help first time buyers understand what is involved in purchasing a home and make it an easy and affordable process.
Cindee Stone has over 15 years of experience helping people achieve homeownership through her mortgage lending expertise. She founded People Want Info to educate homebuyers on the loan process and stresses the importance of pre-approval to feel comfortable throughout the process. With her positive attitude and focus on clients, Cindee has achieved success in the mortgage industry by ensuring the best outcomes for each individual borrower.
The document contains a review test with 56 multiple choice questions covering various topics in mortgage lending such as loan applications, appraisals, income and debt calculations, flood insurance requirements, and compliance with laws such as the Truth in Lending Act and Equal Credit Opportunity Act. The questions test knowledge of key terms, ratios, and guidelines used in the origination and underwriting process.
This document provides an overview of a 20-hour mortgage licensing course. It covers several key sections:
1. The national mortgage licensing exam costs $92, takes 2.5 hours, has 100 multiple choice questions including 10 sample questions, requires a 75% score to pass, and provides feedback on strong and weak areas.
2. The exam tests on federal law (35%), general mortgage knowledge (25%), loan origination (25%), and ethics (15%).
3. The document reviews important concepts like underwriting ratios, documentation requirements, title insurance, non-traditional lending guidelines, fiduciary duties, fair housing laws, consumer protection, and mortgage fraud.
4. Key laws covered include
The document provides an overview of a presentation on preparing for the mortgage loan originator exam. It discusses the exam process, including registering online, paying fees, and scheduling the national and state exams. It also reviews strategies for taking multiple choice exams and covers sample exam topics, such as laws governing lending practices like the Truth in Lending Act and Equal Credit Opportunity Act.
Step by step process to buying a home. Everything you need to know from making the offer, to getting the proper inspections, the paperwork, and closing process.
Mike Hall
Http://www.myohiohouse.com
614-937-4162
Homebuyer seminar - Everything you need to know to purchase your homefvcollins
This document provides information about a first time homebuyers seminar. It covers topics like why buy a home, being ready to buy, types of homes, understanding loans and financing options, the home buying process, and closing on a home purchase. The seminar is intended to help first time buyers understand what is involved in purchasing a home and make it an easy and affordable process.
Cindee Stone has over 15 years of experience helping people achieve homeownership through her mortgage lending expertise. She founded People Want Info to educate homebuyers on the loan process and stresses the importance of pre-approval to feel comfortable throughout the process. With her positive attitude and focus on clients, Cindee has achieved success in the mortgage industry by ensuring the best outcomes for each individual borrower.
This document summarizes the key steps and considerations for first-time homebuyers. It discusses getting pre-approved for a mortgage, choosing between government and conventional loans, understanding closing costs and down payment requirements, working with a real estate agent and loan officer, and going through the home buying process from offer to closing. The overall message is to educate yourself on your financing options and work with professionals to ensure you purchase a home that fits within your budget and financial goals.
This document summarizes a home buyer seminar presented by a realtor and mortgage lender. It discusses the benefits of homeownership over renting, current market conditions making it a good time to buy, various loan programs available, and the basic steps involved in the home buying process. Key points covered include how much house one can afford, the importance of pre-approval, costs of owning vs renting over 5 years, how to qualify for different loan types, and the many professionals involved in a real estate transaction. Questions from attendees are invited at the end.
First Time Home Buyer Class Sacramento CaliforniaHomeBoom.com
Learn about first time home buyer programs to purchase real estate. First time home buyer loan programs are our there to help you buy your first home. Down payment assistance and special government programs can help with closing costs. HomeBoom.com is a great place to search for the perfect house.
What Does a Recession Mean for the Real Estate Industry?Tom Blefko
Sales meeting for the North Pointe office of Berkshire Hathaway HomeServices Homesale Realty covering the following topics: 1. NEW Cinch Home Services' home warranty plans, 2. BHHS Awards Criteria, 3. Homesale Listing Packages, 4. Google Drive, 5. Cloze CRM, 6. Ninja Selling installation, 7. What does a recession mean for the real estate industry.
A rental property business is a great way of earning a passive income. It can help you have great finances if you go about it in the right way. The rental property market stood at a size of 174.2 bn dollars in the US in 2021. And with the subsiding pandemic isn’t about to shrink any time soon. Now, if you are planning to become a landlord, you might need just one thing before you start your business. A business plan. A business plan would become a guide in your business journey. It would also make your journey a less difficult and successful one. So, if you are ready to start your business, read on to find out all about a rental property business plan.
Homebuying seminar for realtors to useheatherjs821
This homebuying seminar provides information to help families make the right decision for homeownership. It discusses the benefits of owning over renting, getting pre-approved for a loan, choosing a realtor, making an offer, and completing the closing process. Resources are also included to help with the homebuying process.
Our Steps to Success Buyer Presentation is about educating your buyer clients right from the beginning. As a Realtor®, you are a trained, knowledgeable, experienced professional. You know the market nationally, regionally and locally. With a strong buyer presentation such as ours, you will get the commitment of buyer prospects to work with you. We all know that working with buyers can be like herding cats. Our Buyer Presentation is a tool designed to help designate you as the real estate professional and establish control of your client.
1. The document provides information for first time home buyers on the steps involved in purchasing a home, including obtaining mortgage approval, finding a home, making an offer, negotiations, inspections, appraisal, title work, and closing.
2. It discusses the advantages of home ownership, defining search criteria for finding a home, tips for working with a realtor, the mortgage qualification and approval process, and requirements for condo/HOA purchases.
3. The key steps are outlined as obtaining mortgage pre-approval, working with a realtor to find a suitable home, making an initial offer, potentially negotiating terms, completing inspections and appraisal, handling title work, and finalizing the purchase at closing
The document provides information about the home buying process for first-time homebuyers. It discusses determining how much home you can afford, the importance of credit, mortgage options including government and conventional loans, closing costs, and the steps involved in the mortgage application and approval process. The overall goal is to educate homebuyers so they can choose the right mortgage program and home to fit their needs and budget.
Luxury Real Estate Listing PresentationGary Grimes
After building four websites for this client, he approached me about creating a luxury listing presentation for his high-end real estate clients on Florida's beautiful Emerald Coast. Here's what I came up with. He was thrilled and so were clients!
Gambling provides significant economic benefits. It increases tourism as casinos draw visitors who boost local economies. Gambling also creates many jobs directly through casinos and indirectly through related businesses. Gambling generates substantial tax revenue for states and communities. However, gambling also has social costs like problem gambling and bankruptcy that affect individuals and families. Overall, the economic benefits of gambling through increased tourism, employment, and tax revenue outweigh these costs.
LCAR Unit 22 - Leasing and Property Management - 14th Edition RevisedTom Blefko
This document provides an overview of leasing and property management. It discusses key concepts such as different types of leases, the responsibilities of property managers, and financial reports used in property management. Specifically, it covers lease agreements, the management plan and agreement, the property manager's responsibilities, renting procedures, and types of leases including gross, net, percentage, and ground leases.
Real Estate Sales Strategy PowerPoint Presentation SlidesSlideTeam
Need to present marketing ideas for real estate, our content-ready real estate sales strategy PowerPoint presentation will be helpful for you. Market conditions change very quickly so marketing plan should be flexible. The property sales plan PPT design includes set of slides such as business snapshot, market size, business activity, average price, trends, property demand, opportunities, major investments, policy support, market summary, market analysis info graphics, outlook, business growth, home price index, project price appreciation, foreclosures files vs completed, mortgage rates, REO and short sales, new home loan application, home rents, types of property purchased, potters five forces model, growth drivers, trade comparison, price comparison, real estate investment types, top towns for investors, most inexpensive metro areas, pie chart info graphic etc. This home selling plan PPT slides can be used to present topics like real estate marketing, real estate selling tactics, steps to selling property, real estate sales plan, property sales strategy, property selling techniques, pricing strategy and home selling plan. Download our real estate sales strategy PowerPoint templates to effectively target the audience. Get them to acknowledge your excellence with our Real Estate Sales Strategy PowerPoint Presentation Slides. It helps bring down the competition.
So its the time for you to buy your first home and you need a mortgage. In this seminar learn about all of the options for a mortgage, and how you can qualify for a loan. We will cover all of the details and answer your questions. If you are a professional, this is the perfect seminar to help your customer learn about the mortgage loan process and we can customize it to your needs. Just contact us for details.
FREE Sample California security deposit dispute letterLegalDocsPro
This free sample California security deposit dispute letter is designed to be used by a tenant whose landlord is making a bad faith claim against their security deposit, or is retaining their security deposit in bad faith. The letter threatens legal action under California Civil Code section 1950.5 in the amount of 3 times the security deposit for bad faith claims or retention of the security deposit.
FORECLOSURE Response to JP Morgan Chase Foreclosurelauren tratar
WAKE UP AMERICA! Banks are STEALING HOUSES they do not own nor did they pay a dime for! Mortgages were PRE-SOLD to Investors of Mortgage-Backed Securities. A bank CANNOT foreclose if it has NOTHING TO LOSE! The banks shifted the risk to the Investors and the banks took the PROMISSORY NOTES cashed them into the FRAUDULENT FEDERAL RESERVE, and then SOLD the exact same NOTES to MBS Trusts MULTIPLE TIMES!!!
Real estate agency business plan exampleupmetrics.co
A real estate agency is one of the best ways of getting paid for your expertise in the real estate business. If you have a thorough knowledge of the market, are a brilliant negotiator, and can think on your feet then being a real estate agent might be the right career for you. The property sales and brokerage market in the US stood at a sum of 156.2 billion dollars in 2021. It is a great market to be in, but you need a well-designed business plan to succeed as a real estate agent. A business plan can help you in having a clear strategy and also in keeping a track of your progress.
Proposal for financial joint venture partnerLukman Oyebode
1) ABC seeks a financial partner to provide $750 million in credit to purchase oil commodities from suppliers at a discount, which ABC will then immediately sell to end-users at a profit.
2) ABC proposes a joint venture where the financial partner's funds remain in their current account and a bank issues ABC a line of credit backed by those funds.
3) For example, ABC could purchase 3 million barrels of jet fuel for $306 million, sell it immediately for a $45 million profit, and the end-user would pay over 12 months via a letter of credit. The financial partner's capital would be secured after the first transaction.
Loan Originator Pre-Licensing and Exam Prep Powerpoint Slide Deck for students of Jillayne Schlicke and CE Forward, Inc. To be used in tandem with your course book.
SAFE 20 Hour Loan Originator Pre-licensing Class SlidesJillayne Schlicke
The document outlines an agenda for a 20-hour mortgage loan origination training course. It includes sections on the Uniform State Test, exam components, exam preparation strategies, the history of mortgage lending, an introduction to the different entities in the mortgage industry, requirements for loan applications, qualifying borrowers, and underwriting guidelines. The trainer leads discussions on topics like occupancy requirements, income and asset verification, and gaps in employment history. Case studies are used to have students evaluate loan approval decisions.
This document summarizes the key steps and considerations for first-time homebuyers. It discusses getting pre-approved for a mortgage, choosing between government and conventional loans, understanding closing costs and down payment requirements, working with a real estate agent and loan officer, and going through the home buying process from offer to closing. The overall message is to educate yourself on your financing options and work with professionals to ensure you purchase a home that fits within your budget and financial goals.
This document summarizes a home buyer seminar presented by a realtor and mortgage lender. It discusses the benefits of homeownership over renting, current market conditions making it a good time to buy, various loan programs available, and the basic steps involved in the home buying process. Key points covered include how much house one can afford, the importance of pre-approval, costs of owning vs renting over 5 years, how to qualify for different loan types, and the many professionals involved in a real estate transaction. Questions from attendees are invited at the end.
First Time Home Buyer Class Sacramento CaliforniaHomeBoom.com
Learn about first time home buyer programs to purchase real estate. First time home buyer loan programs are our there to help you buy your first home. Down payment assistance and special government programs can help with closing costs. HomeBoom.com is a great place to search for the perfect house.
What Does a Recession Mean for the Real Estate Industry?Tom Blefko
Sales meeting for the North Pointe office of Berkshire Hathaway HomeServices Homesale Realty covering the following topics: 1. NEW Cinch Home Services' home warranty plans, 2. BHHS Awards Criteria, 3. Homesale Listing Packages, 4. Google Drive, 5. Cloze CRM, 6. Ninja Selling installation, 7. What does a recession mean for the real estate industry.
A rental property business is a great way of earning a passive income. It can help you have great finances if you go about it in the right way. The rental property market stood at a size of 174.2 bn dollars in the US in 2021. And with the subsiding pandemic isn’t about to shrink any time soon. Now, if you are planning to become a landlord, you might need just one thing before you start your business. A business plan. A business plan would become a guide in your business journey. It would also make your journey a less difficult and successful one. So, if you are ready to start your business, read on to find out all about a rental property business plan.
Homebuying seminar for realtors to useheatherjs821
This homebuying seminar provides information to help families make the right decision for homeownership. It discusses the benefits of owning over renting, getting pre-approved for a loan, choosing a realtor, making an offer, and completing the closing process. Resources are also included to help with the homebuying process.
Our Steps to Success Buyer Presentation is about educating your buyer clients right from the beginning. As a Realtor®, you are a trained, knowledgeable, experienced professional. You know the market nationally, regionally and locally. With a strong buyer presentation such as ours, you will get the commitment of buyer prospects to work with you. We all know that working with buyers can be like herding cats. Our Buyer Presentation is a tool designed to help designate you as the real estate professional and establish control of your client.
1. The document provides information for first time home buyers on the steps involved in purchasing a home, including obtaining mortgage approval, finding a home, making an offer, negotiations, inspections, appraisal, title work, and closing.
2. It discusses the advantages of home ownership, defining search criteria for finding a home, tips for working with a realtor, the mortgage qualification and approval process, and requirements for condo/HOA purchases.
3. The key steps are outlined as obtaining mortgage pre-approval, working with a realtor to find a suitable home, making an initial offer, potentially negotiating terms, completing inspections and appraisal, handling title work, and finalizing the purchase at closing
The document provides information about the home buying process for first-time homebuyers. It discusses determining how much home you can afford, the importance of credit, mortgage options including government and conventional loans, closing costs, and the steps involved in the mortgage application and approval process. The overall goal is to educate homebuyers so they can choose the right mortgage program and home to fit their needs and budget.
Luxury Real Estate Listing PresentationGary Grimes
After building four websites for this client, he approached me about creating a luxury listing presentation for his high-end real estate clients on Florida's beautiful Emerald Coast. Here's what I came up with. He was thrilled and so were clients!
Gambling provides significant economic benefits. It increases tourism as casinos draw visitors who boost local economies. Gambling also creates many jobs directly through casinos and indirectly through related businesses. Gambling generates substantial tax revenue for states and communities. However, gambling also has social costs like problem gambling and bankruptcy that affect individuals and families. Overall, the economic benefits of gambling through increased tourism, employment, and tax revenue outweigh these costs.
LCAR Unit 22 - Leasing and Property Management - 14th Edition RevisedTom Blefko
This document provides an overview of leasing and property management. It discusses key concepts such as different types of leases, the responsibilities of property managers, and financial reports used in property management. Specifically, it covers lease agreements, the management plan and agreement, the property manager's responsibilities, renting procedures, and types of leases including gross, net, percentage, and ground leases.
Real Estate Sales Strategy PowerPoint Presentation SlidesSlideTeam
Need to present marketing ideas for real estate, our content-ready real estate sales strategy PowerPoint presentation will be helpful for you. Market conditions change very quickly so marketing plan should be flexible. The property sales plan PPT design includes set of slides such as business snapshot, market size, business activity, average price, trends, property demand, opportunities, major investments, policy support, market summary, market analysis info graphics, outlook, business growth, home price index, project price appreciation, foreclosures files vs completed, mortgage rates, REO and short sales, new home loan application, home rents, types of property purchased, potters five forces model, growth drivers, trade comparison, price comparison, real estate investment types, top towns for investors, most inexpensive metro areas, pie chart info graphic etc. This home selling plan PPT slides can be used to present topics like real estate marketing, real estate selling tactics, steps to selling property, real estate sales plan, property sales strategy, property selling techniques, pricing strategy and home selling plan. Download our real estate sales strategy PowerPoint templates to effectively target the audience. Get them to acknowledge your excellence with our Real Estate Sales Strategy PowerPoint Presentation Slides. It helps bring down the competition.
So its the time for you to buy your first home and you need a mortgage. In this seminar learn about all of the options for a mortgage, and how you can qualify for a loan. We will cover all of the details and answer your questions. If you are a professional, this is the perfect seminar to help your customer learn about the mortgage loan process and we can customize it to your needs. Just contact us for details.
FREE Sample California security deposit dispute letterLegalDocsPro
This free sample California security deposit dispute letter is designed to be used by a tenant whose landlord is making a bad faith claim against their security deposit, or is retaining their security deposit in bad faith. The letter threatens legal action under California Civil Code section 1950.5 in the amount of 3 times the security deposit for bad faith claims or retention of the security deposit.
FORECLOSURE Response to JP Morgan Chase Foreclosurelauren tratar
WAKE UP AMERICA! Banks are STEALING HOUSES they do not own nor did they pay a dime for! Mortgages were PRE-SOLD to Investors of Mortgage-Backed Securities. A bank CANNOT foreclose if it has NOTHING TO LOSE! The banks shifted the risk to the Investors and the banks took the PROMISSORY NOTES cashed them into the FRAUDULENT FEDERAL RESERVE, and then SOLD the exact same NOTES to MBS Trusts MULTIPLE TIMES!!!
Real estate agency business plan exampleupmetrics.co
A real estate agency is one of the best ways of getting paid for your expertise in the real estate business. If you have a thorough knowledge of the market, are a brilliant negotiator, and can think on your feet then being a real estate agent might be the right career for you. The property sales and brokerage market in the US stood at a sum of 156.2 billion dollars in 2021. It is a great market to be in, but you need a well-designed business plan to succeed as a real estate agent. A business plan can help you in having a clear strategy and also in keeping a track of your progress.
Proposal for financial joint venture partnerLukman Oyebode
1) ABC seeks a financial partner to provide $750 million in credit to purchase oil commodities from suppliers at a discount, which ABC will then immediately sell to end-users at a profit.
2) ABC proposes a joint venture where the financial partner's funds remain in their current account and a bank issues ABC a line of credit backed by those funds.
3) For example, ABC could purchase 3 million barrels of jet fuel for $306 million, sell it immediately for a $45 million profit, and the end-user would pay over 12 months via a letter of credit. The financial partner's capital would be secured after the first transaction.
Loan Originator Pre-Licensing and Exam Prep Powerpoint Slide Deck for students of Jillayne Schlicke and CE Forward, Inc. To be used in tandem with your course book.
SAFE 20 Hour Loan Originator Pre-licensing Class SlidesJillayne Schlicke
The document outlines an agenda for a 20-hour mortgage loan origination training course. It includes sections on the Uniform State Test, exam components, exam preparation strategies, the history of mortgage lending, an introduction to the different entities in the mortgage industry, requirements for loan applications, qualifying borrowers, and underwriting guidelines. The trainer leads discussions on topics like occupancy requirements, income and asset verification, and gaps in employment history. Case studies are used to have students evaluate loan approval decisions.
The document outlines an agenda for a 20 hour mortgage licensing preparation course. It includes sections on exam preparation, the history of mortgage lending, the roles of various players in the mortgage industry, how to underwrite a loan, and a credit reporting module. Students will learn about the exam components, underwriting ratios, verifying borrower income and assets, the ability to repay rule, and order a practice credit report. The course uses discussions, activities, and case studies to help students learn key concepts needed to obtain their mortgage license.
The document outlines an agenda for a 20-hour mortgage lending training course, including sections on licensing exams, the mortgage origination process, underwriting, credit, title insurance, escrow, appraisals, and insurance. The course will cover federal and state laws, various mortgage products and terms, the roles of people involved in originating and funding loans, and how to qualify borrowers and analyze applications. The trainer will use presentations, case studies, and group discussions to prepare attendees to obtain their mortgage loan originator license.
This document outlines a 20-hour training course for mortgage loan originator licensing and exam preparation. The course covers many key mortgage topics through modules, including the state licensing exam, federal laws, loan origination, underwriting, credit reports, title insurance, appraisals, mortgage math, and government loan programs like FHA and VA. Interactive exercises are included, such as case studies and group work. The trainer introduces herself and reviews learning styles to engage different types of students. The goal is to provide a comprehensive overview of the mortgage process and exam content.
This document outlines an agenda for a 20 hour mortgage pre-licensing course. It covers several modules on topics like loan origination, underwriting, title insurance, escrow, appraisals, and mortgage programs. The course instructor introduces themselves and reviews learning objectives and exam preparation strategies. It also includes several group activities like analyzing a loan application, case studies, and exercises to practice mortgage math calculations.
Utilize ACCION USA's online resources to craft a business plan.
While a formal business plan may not always be required, ACCION USA does recommend having a plan in place - especially for start-up businesses that have not yet achieved profitability. ACCION USA's website contains helpful templates and articles that can guide Alejandro in developing an initial business plan to strengthen his loan application.
Get Out of Debt With the Debt Settlement OptionDave Falvey
Debt settlement and debt consolidation are two decent alternatives to bankruptcy. I help my clients with debt settlement/consolidation all the time, and make sure it's the best route they can take before suggesting it vs bankruptcy.
Read the booklet I put together. I give this information to my clients when they visit my office. It will help you understand all the ins and outs of dealing and getting rid of your debt issues.
The Georgia Dream Neighborhood Stabilization Program provides $14,000 loans for down payments to assist home buyers purchase foreclosed properties in selected counties. The loan is forgiven gradually over 5 years as long as the buyer occupies the home. To qualify, buyers must complete a homebuyer education course, purchase a foreclosed home in an area of high need below 85% of its appraised value, and earn less than the income limits. The program aims to help buyers purchase affordable foreclosed homes using FHA rehab loans while stabilizing hard-hit neighborhoods.
The document discusses various options for homeowners facing foreclosure, including reinstatement, forbearance plans, selling the property, refinancing, mortgage modification, deed-in-lieu, bankruptcy, and pursuing a short sale. It notes that more than 70% of homeowners enter foreclosure without intervention and explains the foreclosure process and potential consequences of foreclosure and short sales like tax liabilities and credit impacts.
This document provides biographies of three speakers at the American Conference on Mortgage Servicing:
- James M. Milano is a partner at Weiner Brodsky Kider PC who focuses on mortgage banking, consumer finance, and real estate law. He represents mortgage companies and financial institutions.
- Thomas O. Freeburger is Assistant General Counsel at the California Housing Finance Agency. He previously worked in private practice in real estate and finance law.
- Jonathan N. Ledsky is a founder and shareholder of Varga Berger Ledsky Hayes & Casey, where he handles complex litigation and advises finance clients on compliance.
- David Eghbali, a former Wells Fargo loan originator, is suing the bank for wrongful termination.
- He claims Wells Fargo failed to provide him proper training on RESPA compliance over his 12 years at the bank.
- Eghbali alleges he shifted escrow fees to other customers to circumvent Wells Fargo's rate lock policy, but says this was due to flaws in the bank's policy that should have been foreseen.
- He also argues Wells Fargo managers treated him in a mean manner.
Dan Keller Mortgage Planning Guide For First Time Home BuyersDan Keller
The document provides an overview of potential sources of "turbulence" or challenges that may arise when obtaining a home loan. It lists 83 possible issues divided into those relating to the buyer/borrower (32 items), the seller (24 items), and the property (9 items). Some examples include the borrower losing their job or having incorrect information on their loan application, the seller backing out or being unable to clear liens, and issues with the property like unresolved repairs or the home not appraising for the agreed upon value. The overall message is that there are many potential complications that could delay or derail the loan process.
This document provides an agenda and materials for an 8 hour continuing education course for loan originators. The course covers federal lending laws including TILA, RESPA, HMDA, appraisal rules, and the TRID rule. It also discusses non-traditional lending, ethics, consumer protection, fair lending, and mortgage fraud. Presentation materials include case studies, questions for discussion, and a quiz. A separate 1 hour section focuses on Washington state-specific requirements and includes a DFI rulemaking update, security best practices, and a case study on a DFI enforcement action.
The document provides an overview of various FHA loan programs offered through Affinity Lending Group including standard FHA, FHA jumbo, FHA streamline, and FHA secure programs. It outlines eligibility guidelines, underwriting guidelines, and other details of the programs. Affinity Lending Group has been assisting first-time homebuyers and those needing down payment assistance since 2003 through these FHA loan options.
Dan Keller 2019 Mortgage Planning Packet for Home BuyersDan Keller
Seattle Mortgage Professional and top 1% in America Loan Officer shares his exclusive mortgage planning educational packet that he gives to all home buyer clients. How to get a great rate, how to ensure there are no hick-uos in the buying process, how to make the best financial choice when buying a home!
Similar to 20 Hour Loan Originator Pre-Licensing Slides 2021 (20)
SAMP Dinner Meeting September 15, 2021
Current Issues in Mortgage Lending
RESPA Affiliated Business Arrangements, Bitcoin and Blockchain, Climate Change, Pricing Exceptions
This document summarizes Jillayne Schlicke's presentation to the Spokane Mortgage Lenders Association on June 16, 2021. The presentation covers RESPA violations, mortgage fraud schemes that emerge during real estate bubbles, and trends in money laundering. Specific topics discussed include affiliated business arrangements, mortgage fraud cases involving misrepresentation of employment or property value, and "silent second" mortgage schemes used to obscure additional debt from lenders.
The document discusses credit, credit cards, credit scores (FICO), and building credit history. It provides the following key points:
- Avoid getting credit card offers as soon as you turn 18 and instead get a credit card from your bank with a small $500 limit to begin building credit history.
- Making only minimum payments on a credit card balance will result in interest payments that prolong paying off the balance for years.
- A FICO credit score measures credit risk based on payment history (35%), amount owed (30%), length of credit history (15%), new credit (10%), and credit mix (10%).
- Do not co-sign loans or accounts for others as you will be responsible
This document is a biography and memorial for Mark Randall Perez who passed away on February 10, 2021 in Edmonds, WA at the age of 71. It includes information about his family and career as a title insurance representative, as well as poems he wrote and photos from his life. Many friends and family shared memories and thoughts about Mark, remembering him as a kind, generous, and caring person who was devoted to his friends and family.
Real estate agents are using drones themselves or hiring third party vendors to take drone footage, either of these meets the definition of "commercial purpose." What are the FAA rules surrounding this new issue?
Real Estate and Mortgage Fraud: Emerging Trends 2016Jillayne Schlicke
This document provides an agenda and materials for a training on emerging trends in real estate and mortgage fraud. The training covers the FBI's definitions of mortgage fraud, case studies of recent local fraud cases, emerging fraud trends like collusion, affinity fraud and inflating income/assets. It includes a quiz and discussion of mitigation efforts. The goal is for attendees to learn about current fraud schemes and how they are evolving.
Marketing Services Agreements: Co-Marketing and RESPAJillayne Schlicke
This document provides an overview and agenda for a training class on Marketing Services Agreements (MSAs) and co-marketing. The class will cover the reasons for switching from Affiliated Business Arrangements to MSAs, how MSAs and co-marketing may or may not violate RESPA, case studies, and best practices. The objectives are to understand how MSAs comply with RESPA and Dodd-Frank regulations regarding referrals, fees, and qualified mortgages. Breakout groups and a quiz are included.
This document provides an agenda and overview for an 8-hour continuing education course for loan originators. The course covers federal lending laws including the TILA/RESPA Integrated Disclosure Rule (TRID) which implements the new Loan Estimate and Closing Disclosure forms. It discusses the requirements for providing the Loan Estimate within 3 days of application, the good faith tolerances for closing costs, requirements for revised disclosures, and timing for delivering the Closing Disclosure. The course also addresses additional federal laws on pre-disclosure fees, consumer intent to proceed, and exceptions to the new TRID rules.
Dodd Frank Act 2015 Rule Implementation: Will The World End?Jillayne Schlicke
The Dodd Frank Act Rule Implementation of 2015 will bring another set of changes to the lending and escrow industries. Spoiler alert: The world will not end.
Marijuana and the Practice of Real Estate Course SlideDeckJillayne Schlicke
This document provides an overview and summary of marijuana laws as they relate to real estate practices in Washington state. It begins with introductions and outlines the agenda. It then discusses key topics like medical vs recreational marijuana laws, federal vs state laws, listing and selling properties involved with marijuana, and issues for property managers. Banking and lending considerations are also reviewed. The document aims to help real estate professionals understand the complex legal landscape around marijuana to properly navigate related issues in their work.
Marijuana and The Practice of Real Estate: Illegal Marijuana Grow House PicturesJillayne Schlicke
For the students from Jillayne Schlicke's class: Marijuana and the Practice of Real Estate. These slides show pictures from illegal marijuana grow houses.
Stand Alone Uniform State Test for Mortgage Loan Originators EXAM PREPJillayne Schlicke
This document summarizes an instructor-led training on preparing for the stand-alone Uniform State Test (UST) required for loan originator licensing. It outlines the agenda which includes introductions, boundaries, objectives, an overview of the UST and SAFE Act, quizzes on relevant sections, definitions, prohibited conduct, and a final practice quiz. Key points covered are that passing the UST allows originators to apply for licensing in participating states, the test contains 25 multiple-choice questions to be completed in 45 minutes, and state requirements may include additional education.
This document provides an overview and agenda for a training on body language and non-verbal communication. It discusses how over 90% of communication is non-verbal and covers gender differences, attention spans, recognizing signals, and meanings behind various hand gestures, facial expressions, and body positions. The goal is for participants to learn how to better understand clients' non-verbal cues and manage their own signals in interactions.
The four Cs of underwriting are:
1. Character - The borrower's credit history
2. Capacity - The borrower's ability to repay based on income
3. Collateral - The value of the property securing the loan
4. Capital - The borrower's available funds, typically a down payment
This document outlines an agenda for a 20 hour mortgage licensing preparation course, which covers topics like federal lending laws, general mortgage knowledge, the loan origination process, and ethics. The course is divided into sections that include modules on the national exam, different types of lenders, completing a loan application, underwriting guidelines, and various loan programs like FHA and VA loans. Interactive exercises are included, such as reviewing a sample credit report and loan application.
The document discusses a training session on clients behaving badly and mental health disorders. The agenda includes introductions, boundaries, market updates, small group assignments, abnormality, values, self-assessment, personality disorders, case studies, counseling clients behaving badly, and large group discussion. Participants share experiences with mental health issues in their families and worst client experiences. The training covers looking at abnormality, values in real estate practice, and mental health disorders including narcissistic personality disorder.
The four Cs of underwriting are:
1. Character - The borrower's credit history
2. Capacity - The borrower's ability to repay based on income
3. Collateral - The value of the property securing the loan
4. Capital - The borrower's available funds, typically a down payment
AVRUPA KONUTLARI ESENTEPE - ENGLISH - Listing TurkeyListing Turkey
Looking for a new home in Istanbul? Look no further than Avrupa Konutlari Esentepe! Our beautifully designed homes provide the perfect blend of luxury and comfort, making them the perfect choice for anyone looking for a high-quality home in the city.
With a wide range of apartment types available, from 1+1 to 4+1, we have something to suit every need and budget. Each apartment is designed with attention to detail and features spacious and bright living areas, making them the perfect place to relax and unwind after a long day.
One of the things that sets Avrupa Konutlari Esentepe apart from other developments is our focus on creating a community that is both comfortable and convenient. Our homes are surrounded by lush green spaces, perfect for enjoying a peaceful stroll or having a picnic with friends and family. Additionally, our complex includes a variety of social and recreational amenities, such as swimming pools, sports fields, and playgrounds, making it easy for residents to stay active and socialize with their neighbors.
https://listingturkey.com/property/avrupa-konutlari-esentepe/
Living in an UBER World - June '24 Sales MeetingTom Blefko
June 2024 Lancaster County Sales Meeting for Berkshire Hathaway HomeServices Homesale Realty covering the following topics: 1. VA Suspends Buyer Agent Payment Plan (article), 2. Frequently Used Terms in title, 3. Zillow Showcase Overview, 4. QuickBuy commission promotion, 5. Documenting Cooperative Compensation, 6. NAR's Code of Ethics - Mass Media Solicitations, 7. Is it really cheaper to rent? 8. Do's and Don't's when Terminating the Agreement of Sale, 9. Living in an UBER World
Stark Builders: Where Quality Meets Craftsmanship!shuilykhatunnil
At Stark Builders our vision is to redefine the renovation experience by combining both stunning design and high quality construction skills. We believe that by delivering both these key aspects together we are able to achieve incredible results for our clients and ensure every project reflects their vision and enhances their lifestyle.
Although we are not all related by blood we have created a team of highly professional and hardworking individuals who share the common goal of delivering beautiful and functional renovated spaces. Our tight nit team are able to work together in a way where we pour our passion into each and every project as we have a love for what we do. Building is our life.
BEST FARMLAND FOR SALE | FARM PLOTS NEAR BANGALORE | KANAKAPURA | CHICKKABALP...knox groups real estate
welcome to knox groups real estate company in Bangalore. best farm land for sale near Bangalore and madhugiri . Managed farmland near Kanakapura and Chickkabalapur get know more details about the projects .Knox groups is a leading real estate company dedicated to helping individuals and businesses navigate the dynamic real estate market. With our extensive knowledge, experience, and commitment to excellence, we deliver exceptional results for our clients. Discover the perfect foundation for your agricultural aspirations with KNOX Groups' prime farm lands. These aren't just plots; they're the fertile grounds where vibrant crops flourish, livestock thrives, and unique agricultural ventures come to life. At KNOX, we go beyond selling land we curate sustainable ecosystems, ensuring that your journey toward agricultural success is seamless and prosperous.
Kumar Codename Fireworks at Hadapsar Link Road, Pune - PDF.pdfmonikasharma630
Codename Fireworks developed by Kumar Properties is a new residential development that offers 2/3 BHK premium residences with easy access to proposed ring road, airport, metro station.
For More Details:
Visit Here: kumar.developerprojects.com
The SVN® organization shares a portion of their new weekly listings via their SVN Live® Weekly Property Broadcast. Visit https://svn.com/svn-live/ if you would like to attend our weekly call, which we open up to the brokerage community.
Anilesh Ahuja Pioneering a Paradigm Shift in Real Estate Success.pptxneilahuja668
Anilesh Ahuja journey is a testament to the power of vision, resilience, and unwavering determination. As a visionary leader, he continues to inspire and empower others to dream big and challenge the status quo. His legacy extends far beyond the realm of real estate, leaving an indelible mark on the industry and the world at large.
Deed 3754 S Honeysuckle Mesa AZ 85212 owner Shawn Freeman - Pamela Brown Nota...
20 Hour Loan Originator Pre-Licensing Slides 2021
1. 20 Hour SAFE Comprehensive
Pre-Licensing and Exam Prep
C-12020
WA State Pre-Licensing
C-11978
Jillayne Schlicke
2. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Welcome!
Please complete the sign-in sheet, including an
address. If you’re not yet employed with a
mortgage company, use your home address.
Read and sign the NMLS Rules of Conduct for
Students.
Photo ID required. Any of these are fine:
Driver’s license, passport, state ID card,
military ID that contains both a picture and a
signature
2
3. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 1 Introduction
Introduction of trainer
Introduction of students
Who are you
Where do you work
What do you do? LOA = Loan Originator Assistant
Exam anxieties
3
5. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
5
Exam Components AS OF APRIL 5, 2021
24% Federal Law
20% General Mortgage Knowledge
programs, products, terms
27% Loan Origination Activities
application, qualifying, title, escrow, math
18% Ethics
consumer protection, fraud, fair housing
11% Uniform State Content
licensing law, prohibited practices
6. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
6
Content Area 2020 2021 Increase or
decrease?
Federal Law 23% 24% increase
Uniform State Content 13% 11% decrease
General Mortgage
Knowledge
23% 20% decrease
Loan Originator
Activities
25% 27% increase
Ethics: Consumer
Protection Fraud, Fair
Housing
16% 18% increase
7. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
7
Section 1 Module 1.1
Exam prep basics: If you understand the purpose of each
law, you are on your way to selecting the best answer
on a multiple choice exam.
There will be two obvious wrong answers. If you know
the purpose of the law, you will be able to spot
these. Of the two that remain, one will be a little bit
better than the other.
Exam writers do not write trick questions. The language
of the test questions look tricky because you are
being tested on law and most lay people are not use
to reading law on a daily basis. This is the only fair
way to deliver a 50-state exam.
9. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
9
Section 1 Module 1.1
What’s your learning style?
Auditory-learns by listening
Visual-learns by processing images
Tactile-learns best when writing
Whole Body-learns best when entire body is engaged
Emotional-learns best when complex info can be tied to
an emotion
Verbal-will send link to article about this learning style
https://www.brightoncollege.edu/study-tips-for-verbal-learners/
Learning disabilities-
You may be eligible for extra accommodations if you have a
diagnosed learning disability. Contact the NMLS after reading
the exam candidate handbook.
10. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 1 Module 1.2
History of Mortgage Lending in America
National Bank Act
Federal Reserve Act
Thrift Institutions
Mortgage Lending Prior to Great Depression
Government Involvement in Banking
FHA, Fannie Mae, VA, USDA
1940s through present day
10
11. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 2 Module 2.0
Depository Bank
Checking,
savings
CAN fund its
own loans
LOs are
“registered”
11
Mortgage Broker
No ck/svgs
Does NOT fund its
own loans
Pure middleman
For a fee, finds the
mortgage money
LOs are licensed.
In some states,
these LOs owe
fiduciary duties
to clients
Non-Depository
Lender
Non-Bank Lender
No ck/svgs
CAN fund its
own loans via
lines of credit
with banks
LOs are licensed
Consumer Loan
Act
12. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
The Mortgage Machine
A mortgage is like a machine with many moving parts.
Shout out all the different entities/different jobs that
are involved with creating a mortgage loan….
12
13. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
The Mortgage Machine
What are the different pieces of the mortgage
machine?
Loan originators...
13
14. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 2 Module 2.1
There are many
moving parts in
the Mortgage
Machine. The
function of loan
origination is just
one piece.
14
Loan Originator
Loan Processor
Underwriter
Funder, Quality Control
Title Insurance
Escrow
Appraiser
Insurance
Builders
Realtors
Secondary Market
Loan Servicing
Regulators and Examiners
Consumer
15. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Definition of an LO
Licensed
(6) MORTGAGE LOAN ORIGINATOR—
(a) IN GENERAL—The term ‘‘mortgage loan originator’’—
(i) Means an individual who for compensation or gain or in the expectation of
compensation or gain—
(A) Takes a residential mortgage loan application; or
(B) Offers or negotiates terms of a residential mortgage loan;
(ii) Does not include an individual engaged solely as a loan processor or
underwriter.
(iii) Does not include a person or entity that only performs real estate
brokerage activities and is licensed or registered in accordance with state law,
unless the person or entity is compensated by a lender, a mortgage broker, or
other mortgage loan originator or by any agent of such lender, mortgage
broker, or other mortgage loan originator; and
(iv) Does not include a person or entity solely involved in extensions of credit
relating to timeshare plans, as that term is defined in section 101(53D) of title
11, United States
15
16. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Licensed Loan Originator
The term ‘‘mortgage loan originator’’
Means an individual who for compensation or gain
or in the expectation of compensation or gain
Takes a residential mortgage loan application;
or
Offers* or negotiates terms of a residential
mortgage loan;
*Example: Advertising, quoting rates, fees loan
programs. That would include social media posts
16
17. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Processing and Underwriting
Processor
Analyzes documents
Calls borrower and
asks questions
Prepares the file for
underwriting
Will be the person
you’ll go to with
questions, when you
can’t reach your
boss.
17
Underwriter
Makes sure the loan
conforms to all
guidelines set forth by
the secondary market.
Makes sure the
borrower qualifies
4Cs
Character
Capacity
Capital
Collateral
18. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
18
Section 2 Module 2.2
RESIDENTIAL LOAN APPLICATION
~
The acronym ALIENS can help you
remember the six pieces of
information that constitute a loan
application:
~
Address
Loan amount
Income
Estimated value of the home
Name
Social security number
19. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
19
Section 2 Module 2.2
Break into small groups and talk about
sections of the loan application
What sections might the customers ask you
about?
What sections might the customer consider
lying?
What sections might the customer refuse
to provide information?
20. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
20
Section 2 Module 2.2
Large group discussion:
Occupancy
Assets
Date of Birth
Former employer
Ways of holding title
Acknowledgement, signature
Other Real Estate Owned
Marital Status
HMDA (Home Mortgage Disclosure Act)
21. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Fannie Mae Deed of Trust
6. Occupancy. Borrower shall occupy, establish,
and use the Property as Borrower’s principal
residence within 60 days after the execution of this
Security Instrument and shall continue to occupy the
Property as Borrower’s principal residence for at
least one year after the date of occupancy, unless
Lender otherwise agrees in writing, which consent
shall not be unreasonably withheld, or unless
extenuating circumstances exist which are beyond
Borrower’s control.
https://www.fanniemae.com/singlefamily/security-instruments
21
22. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Home Mortgage Disclosure Act
HMDA
When face to face with the borrower, and the
borrower refuses to provide answers, loan originator is
required to check the boxes on behalf of the applicant
based on visual observation and surname. If the
borrower and loan originator are not face-to-face such
as a loan application taken over the phone or over the
Internet, and the borrower refuses to answer the
questions, the loan originator IS NOT required to check
the boxes on behalf of the applicant.
22
24. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Frequently Asked Question:
What’s the difference between
Hispanic and Latino?
Latino is a term that is telling us about
geography
Hispanic is a term that is telling us about
language.
25. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Hispanic and Latino
Latino
From Latin America
Refers mostly to everything south of the United States
including the Caribbean.
Hispanic
From a country whose primary language is Spanish.
26. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Hispanic and Latino
But not every country in Latin America speaks
Spanish, and some countries that speak Spanish are
not located in Latin America.
Brazil
Latin but not Hispanic. Speaks Portuguese
Spain
Hispanic but not Latino. Speaks Spanish
27. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
HMDA Discussion Questions
Why do Federal regulators want to know if a consumer
is a member of one of the sub-categories?
Why aren’t white ethnic categories offered?
Example: Irish, German
What box is checked when your client is from the
Middle East?
28. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 2 Module 2.3
Last two most recent paystubs
Last two years W-2s
Last three months bank statements
Most recent statement on 401Ks or IRAs
Documentation of ownership of stocks, bonds
Last two months statements from any investment account
Information on current mortgage or landlord contact info
Soc number or green card for all borrowers or co-signers
Letter of explanation for any known credit problems
Documentation supporting any other income
For self employed, borrowers paid on commission or in the field
of sales, and borrowers who own other real property:
Two years signed personal tax returns including all schedules
IRS Form 4506-C
28
29. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Qualifying the Applicant: The Four Cs
Character
(credit history)
Capacity
(stable, reliable, sufficient income)
Capital
(verification of funds for down payment)
Collateral
(how much is the home worth?)
29
30. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
30
Section 2 Module 2.4
FIRST RATIO
PITI
Principal, Interest, Taxes, Insurance
plus home owner’s assoc dues, if applicable
Divided by
Total gross monthly income
= %
SECOND RATIO
PITI plus all other monthly revolving debt
Divided by
Total gross monthly income
= %
31. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 2 Module 2.5
Loan Processing
As documents are received, processors compare the
information verified to the original loan application
and consult the credit underwriting guidelines.
A processor is a liaison between the originator, the
borrower, the Realtor, underwriting and
management.
31
32. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 2 Module 2.6
Employment and Income Verification
Verification of Employment
The Work Number (Equifax)
Request for Verification of Employment (Fannie Mae
Form 1005)
Calculating gross pay
Tax returns
Miscellaneous income
32
33. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 2 Module 2.7
Gaps in Employment. Case Study:
Morgan and Elizabeth are applying to refinance their
home. Morgan has a 4-year gap in employment history.
Prior to the time off, Morgan was working in the
financial sector and has recently re-entered the
financial sector, at a similar salary. Both incomes are
needed to qualify.
What will the underwriter ask for?
33
34. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 2 Module 2.7
For borrowers with gaps in employment of six months
or more, the underwriter may consider the
borrower’s current income as effective income if it
can verify:
1) The borrower has been employed in the current
job for at least six months at the time of FHA case
number assignment, AND
2) verification of a two year work history prior to the
absence from employment.
34
35. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 2 Module 2.8
Assets
Acceptable assets for down payment
Assets for reserves
Ineligible assets
Verification of Deposit (VOD)
Gift Letters
35
36. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 2 Module 2.9
Underwriting
Sufficient and stable monthly income
Prior credit history
Assess collateral
Sufficient down payment
Other factors: Payment shock, debt-to-income
ratios, cash on hand after closing, other
compensating factors
36
37. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 2 Module 2.10
Case Study: David and Ryan
Read the case study. Break into small groups and
discuss: Is this an approvable loan?
If yes, why?
If no, why not?
Justify your decision.
Large group recap
37
38. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 2 Module 2.11
Ability to Repay Rule under Dodd Frank Act
Eight factors:
~
1. Current income and assets
2. Current employment
3. Monthly mortgage payment
4. Monthly payment on simultaneous loans
5. Property taxes, fire/flood insurance, HOA dues
6. Debts including alimony or child support
7. Monthly total DTI ratio
8. Credit history
Underwriters CAN consider other factors
38
39. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 3 Credit Module 3.1
What is a credit report?
What are credit reporting agencies?
What information is contained in a credit report?
Have you ever ordered a credit report on yourself?
AnnualCreditReport.com
39
40. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 3 Module 3.2
What’s in a FICO Score?
35% payment history
30% amount owed
15% length of credit history
10% new credit
10% types of credit used
40
41. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
History of land titles in the U.S.
Great movies to watch and their historical time frame
Far and Away (1890s-1893)
There Will Be Blood (1898-1911)
Little House on the Prairie (1871-)
First Cow (2020)
Nomadland (2020)
202106010001 Warranty Deed
202106010002 Deed of Trust
We needed a system of recording the sale of property.
Late 1700s onward
41
42. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
42
Section 4 Title Insurance Module 4.1
What does it mean when we say we hold title
to something?
Is there a document called “title” that we
get when we buy a home?
Can we do anything we want with and to our
home and land?
How deep into the ground and how high up
do our property rights extend?
43. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Can we do anything we want with our property?
Can I build anything I want?
Can I build a house that would take up the entire lot?
Can I paint my house any color I want?
If I dig a hole, how far down do I own?
How far up do I own?
43
44. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
There are limits to what we can do:
Federal law, state law, county laws, city laws
Zoning, set-backs from the boundary line
Local covenants, conditions and restrictions (CCRs)
Mineral rights
Easements
Height restritions
44
47. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
47
----------------Road-----------------------
Easement to replace the water main is located six feet underground throughout the entire plat
48. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
48
Section 4 Title Insurance Module 4.2
For a one time fee, a title insurance company
will check the public records system and
disclose all matters that affect the title of
real property.
They will insure against loss and defend you
should somebody lay claim to your title.
Pay once, it’s good for as long as you or your
heirs own the property.
Starts the day of closing and looks backward
in time.
49. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
49
Section 4 Title Insurance Module 4.3
How does a title company protect residential
homeowners and residential lenders?
Owner’s policy: Paid for by the seller, protects
the brand new home buyer. Policy is good as
long as home owner/heirs own the property.
Lender’s policy: paid for by the home buyer,
protects the LENDER in case of default. Lender
wants insurance that they will be in first lien
position if they ever have to foreclose on the
property. New lender’s policy each time the
homeowner refinances.
50. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Physical Rights of Real Estate
50
Center of
the Earth
Surface
rights
Fly-over
rights
Mineral,
water, oil,
and gas
rights
Air
rights
51. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 4 Module 4.4
Title insurance troubleshooting
Who is in title to sell the home?
Who is in title when refinancing?
Undisclosed liens against seller or homeowner (refi)
Mortgage paid off but reconveyance not recorded
First mortgage being refinanced, but second mortgage
needs to stay in second position (re-subordinate)
Easements
Encroachments
51
52. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
52
Section 4 Module 4.5 Case Study
Small group assignment:
Read the case study “John and Sara”
Come up with 10 things a loan originator
must discuss/discover before moving
forward with this transaction.
53. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
53
Section 4 Module 4.5
Legal rights and responsibilities of a title
company.
A title company has two duties:
Duty of defense
Duty of indemnification
54. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
What is escrow?
To hold something until something happens
Neutral third party
Only accepts instructions in writing
Limited Practice Officer (LPO)
54
55. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
55
Section 5 Module 5.1-5.7
What is escrow?
What is the Closing Disclosure?
What is the difference between an escrow agent
and an escrow officer?
What does an escrow closer do?
What are the Escrow Instructions?
What are the duties of an escrow agent
Borrower’s signatures and requirements
Issues that could delay closing
56. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
56
Section 6 Appraisals Module 6.1-6.7
What is an appraisal?
What are the three types of approaches to
reconciling the appraised value?
How does an appraiser make adjustments?
Borrower’s right to receive a copy of the
appraisal
Appraisal requirements for Higher Priced
Mortgage Loans
57. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Three approaches to an appraised value
Cost
If this home were to burn down, how much would it
cost to rebuild it?
Market data
What are similar homes selling for right now?
Income
How much would this home rent for, right now?
57
58. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
58
Section 7 Insurance Module 7.1-7.4
General fire/hazard property insurance
coverage
Flood insurance
Private Mortgage Insurance
(conventional loans only)
Private Mortgage Insurance Act of 1998
59. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 8
Financial Calculations Used in
Mortgage Lending
1. Calculate the periodic interest rate for an annual
mortgage rate of 5.0%
0.05 divided by 12 = 0.0042 or 0.42%
59
60. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Per diem interest
2. Interest Per Diem (per day)
a. Principal x rate divided by 365
3. Calculate per diem interest with a loan amount of
$300,000 and a note rate of 5.0%
$41.09
60
61. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Deb-to-income ratios
4. Monthly gross income is 8,333.33 Total housing
expense is 2,000. (PITI). Total long term installment
debt is $649 per month. What are the first and
second ratios?
2000 divided by 8333.33 = 24%
2000 + 649 = 2649
2649 divided by 8333.33 = 32%
61
62. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Debt-to-income ratios
5. Monthly gross income is $18,750. Total housing
expense is $4295. (PITI). Total long term
installment debt is $3937 per month. What are
the first and second ratios?
4295 divided by 18,750 = 23%
4295 + 3937 = 8,232
8232 divided by 18,750 = 44%
62
63. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
6. Upfront mortgage insurance premiums
An FHA fixed rate loan with a 30 year term requires a
1.75% up front premium and an annual premium of
.85%. The base loan amount is $200,000.
upfront: 200,000 x 1.75 = 3,500.
annual: 200,000 x .85 = 1,700
monthly: 1700 div by 12 = 141.67
63
64. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
7. Total interest paid over loan term
Your client is borrowing $189,000 on a 30 year fixed
rate loan. His monthly P&I payments will be $1,241.73
He wants to know the total amount of interest that
will be paid over the life of the loan. Your answer is:
1241.73 (principal and interest)
x 360 (multiplied by the loan term. Hint: 30 x 12)
= 447,022.80 (P&I paid over 30 years)
– 189,000.00 (subtract the loan amount)
= 258,022.80 (and what’s left is the interest)
64
65. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
8. Calculating Loan Amount
A homebuyer makes an offer on a home and wants to
make a 20% down payment so she can avoid private
mortgage insurance. What would the loan amount be
in this transaction if the sales price is $400,000 and
the appraised value is $395,000?
Whichever is less x 80%
395,000 x 80% = $316,000
“an 80% LTV loan.”
65
66. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
9. Loan amount when financing MIP
A refinancing homeowner is selecting an FHA loan with
an upfront MIP that she would like to finance into the
loan amount. What is the final loan amount?
Base loan amount: 350,000
Upfront MIP: 1.75%
350,000 x 1.75% = 6,125.00
Final loan amount when financing the MIP =
Base loan amount + MIP = Final loan amount
350,000 + 6125.00 = 356,125.00
66
67. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
10. Escrow (bank) account in loan servicing
Borrower’s monthly mortgage payment breakdown looks
like this:
Principal = 1106.15
Interest = 606.15
Escrow account to pay real estate taxes and hazard
insurance = 203.19
What is the principal and interest payment (P&I) only?
1106.15 + 606.15 = $1712.30
What is the full monthly payment including taxes and
insurance (PITI)?
1106.15 + 606.15 + 203.19 =$1915.49
67
68. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
11. Borrowers always prioritize making their car payment
first each month and then their second mortgage and
finally their first mortgage. How will a first mortgage
lender view this practice?
a) Order of payments makes no difference to an underwriter.
b) Order of payments makes no difference to an underwriter
provided the loans are always paid on time.
c) Underwriters are looking for patterns in credit behavior.
Making the first mortgage payment third priority is a valid
reason for declining the loan if there is a consistent
pattern of late payments.
d) Underwriters are looking for patters in credit behavior.
Making the first mortgage payment third priority is not a
valid reason to decline the loan.
68
69. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
12.New Construction
Sale price of the lot is $100,000
Cost to build the home is $200,000
Closing costs estimated: $9,000
What is the estimated completed value of the home
plus land?
100,000 + 200,000 =$300,000.
What is the estimated down payment if this borrower
would like to put 20% down?
300,000 x 20% = $60,000.
What is the estimated cash needed to close the loan?
60,000 + 9,000 = $69,000
69
70. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
13. Purchase money loan
See course book for loan details.
265,000 – 13,250 = 251,750 loan amount
Next add together sales price and closing costs
265,000 + 4,000 = 269,000
Now take the above 269,000 and subtract out the loan
amount 269,000 – 251,750 = 17,250
Homebuyer has paid $800 up front for an appraisal and
put down $5,000 earnest money. We need to credit
this to the borrower. 800 + 5000 = 5800
Now subtract out the credits and we have the cash
needed to close the loan. 17,250 – 5800 = 11,450
70
71. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
14. Calculate the down payment for the following sale:
Purchase price is $500,000
Calculate a 20% down payment:
500,000 x 20% = $100,000.
Uh oh, appraisal comes in at $490,000
Now calculate the 20% down payment:
490,000 x 20% = $98,000.
Note: Cash needed to close the loan will be higher,
but that’s not what the question is asking.
71
72. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
15. Calculating Loan-To-Value
What is the loan to value ratio for a loan amount of
$405,000 where the sales price and appraised value
of the property are both $450,000?
405,000 div by 450,000 =
90%
72
73. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
16. Calculating Loan-To-Value
Borrower would like to avoid paying
mortgage insurance on a conventional loan
and has plenty of money for a down
payment. Sales price is $375,000 and the
appraised value is $365,000. What is the
loan amount in order to provide this
borrower with an 80% loan-to-value
mortgage?
$365,000 x 80% = $292,000.
73
74. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Discount Points
Note Rate: 4.00 % = 1% Lender Credit. This can be used
to pay costs on a refi or purchase
Note Rate: 3.50 % = Par
Note Rate: 3.00 % = 1% Discount points paid by borrower
_______________________________________________
Example: 200,000 loan amount
Note Rate: 4.00 % = 1% Lender Credit of $2,000
Note Rate: 3.50 % = 0 No cost to the borrower and no
credit given to the borrower
Note Rate: 3.00 % = 1% Discount Points will cost the
borrower $2,000
74
75. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
75
Rate Points Consumer’s
Situation
Consumer Might
Decide to:
What This Means to
the Consumer
4.00% 1.0%
Lender
Credit
Consumer does not want
to pay a lot of cash up
front and can afford a
slightly higher monthly
payment.
Pay a slightly higher
payment each month. Pay
a higher interest rate over
the life of the loan and not
have to come up with any
money up front to cover
closing costs.
Consumer chooses a
higher rate of 4.00%, in
exchange for $2,000. To
cover closing costs.
Today: Consumer receives
$2,000.
Over the life of the loan:
Consumer pays slightly
more each month.
3.5% 0 Par Consumer is satisfied with
the rate and chooses not
to pay discount points to
buy a lower rate OR
choose a higher rate to
cover closing costs with a
lender credit.
Pay zero points The par rate does not
require consumer to pay
points.
The par rate does not
provide a lender credit.
3.00% 1.0%
Discount
Points
Consumer plans to keep
the mortgage for a long
time. Consumer can
afford to pay more cash
at closing.
Consumer wants a slightly
lower payment
Pay discount points and
select a lower rate. This
will save the consumer
money over the life of the
loan.
Consumer might agree to
pay $2,000. more in
closing costs in exchange
for a lower rate of
3.005%.
Now: Pay $2,000.
Over the life of the loan:
Pay slightly less each
month
76. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
17. Discount points
The purpose of discount points is:
a) To allow lenders to charge a higher rate due to a
low credit score.
b) To allow the consumer to pay some of the
interest up front by purchasing a lower rate, in
order to pay less interest over the life of the
loan.
c) To allow the borrower to obtain a credit from the
lender to cover closing costs, and reducing the
amount of up front money to close the loan.
d) To allow the loan originator to earn additional fee
income.
76
77. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
18. Using the Lender Credit
Consumer chooses a slightly higher rate of 5.125% in
order to obtain a credit from the lender. LOs may use
the lender credit to:
A.Cover the closing costs with the lender credit
B.Cover the closing costs with the lender credit and LO
may also keep what’s left over as a bonus.
C.Cover the closing costs with the lender credit and
distribute what’s left over to the Realtor
D.Cover the closing costs with the lender credit and
may give what’s left over to the consumer in the form
of $14.00 gift cards to cover the monthly payment for
a while
77
78. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Prepaids
19. Calculate the following pre-paid items to be
collected from the borrower at closing:
a) Homeowner’s insurance premium: $125/month for 6
months
125 x 6 = $750.
b) Mortgage insurance premium: $48/month for 3
months
48 x 3 = $144
c) Prepaid, daily interest $20.38/day for 15 days
20.38 x 15 = $305.70
d) Real estate taxes $145.33 per month for 4 months
145.33 x 4 = $581.32
78
79. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Closing Costs
20. A buyer is purchasing a home with a 95%
conventional fixed rate mortgage of $104,500. The
maximum dollar amount the seller may contribute to
the buyer in this case is 3% of the sales price.
Hint: First compute the sales price then multiply by 5%
Loan Amount 104,500 divided by .95 =
The sales price: 110,000
Seller contribution: 110 x 3 percent = 3,300
79
80. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Loan origination charges
21. A homeowner is refinancing and would like to pay
no more than 1 percentage point in loan origination
charges. Loan amount is 375,000. Your company
charges the following loan origination fees:
Loan Origination fee .50
Underwriting fee .25
Processing fee .25
Will you be able to serve this customer?
.50 x 375,000 = 1,875.00
.25 x 375,000 = 937.50
.25 x 375,000 = 937.50
Total $3750
80
81. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
22. Seller buy-downs
A homebuyer would like to have the seller buy down the
interest rate by contributing 2 percent of the sales price to
purchase discount points in order to lower the note rate on
the loan by 1 percent.
Sales price: $325,000
Loan amount: $292,500
Note rate at par is 4.75%
Borrower will have how much money contributed by the
seller? 325,000 x 2% = $6,500.
Purchasing 1 discount point to obtain a lower rate will cost:
292,500 x 1% = $2925.
How much will the borrower have
left over to cover other costs? 6500 – 2925 = $3575.
81
82. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
23. Adjustable Rate Mortgages
5/1/1 Treasury Securities Indexed ARM loan has a
starting rate of 2.0%. At the first adjustment, the
index is 3.0% and the margin is 2.25%. What is the
fully indexed rate?
3.0 + 2.25 = 5.25%
The Index is an economic indicator used to calculate
interest rate adjustments for ARM loans. The index
rate can increase or decrease at any time.
The Margin remains stable over the life of the loan
82
83. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 9: Qualified Mortgages
How to understand the role of Federal Law and The
Secondary Market in the practice of mortgage lending.
Federal Law is our foundation and everything is built
on top of that.
83
84. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Your mortgage company’s product “overlays”
Example: Credit score can be no lower than 620
Conventional Loan Products | Government Loan Products
Example: 30 year fixed rate loan
Conventional Loan Programs | Government Loan Programs
Mortgage-backed securities GNMA (Ginnie Mae Bonds)
Example: Owner Occupied Single Family Purchase or Refi
Fannie Mae and Freddie Mac | FHA/VA/USDA
The Secondary Market provides guidelines
on loans eligible for purchase
State Law
Federal Law
84
85. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 10
The Secondary Market: Conventional Loans
Fannie Mae and Freddie Mac purchase mortgages
from banks and lenders.
F and F turn a bundle of mortgages into
“mortgage-backed securities”
F and F guarantee principal and interest to the investor,
if the borrower does not make their payment
85
86. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 9 Module 9.2
Financial crisis of 2008 led to:
Fannie Mae and Freddie Mac being taken into
government conservatorship.
FHA eventually went insolvent as well, after absorbing
the collapse of subprime loans in 2008.
All three entities received a direct draw from the U.S.
Treasury.
As such, consumers asked for and received massive
regulatory reform: The Dodd Frank Act of 2010
86
87. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 9 Module 9.3
Ability to Repay Rule under Dodd Frank Act of 2010
Eight factors:
~
1. Current income and assets
2. Current employment
3. Monthly mortgage payment
4. Monthly payment on simultaneous loans
5. Property taxes, fire/flood insurance, HOA dues
6. Debts including alimony or child support
7. Monthly total DTI ratio
8. Credit history
Underwriters CAN consider other factors
87
88. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 9
Qualified Mortgages and The Dodd Frank Act
Regular periodic payments that are substantially equal
~
Loan term does not exceed 30 years
~
Total points and fees do not exceed 3% for loans over $100K
~
Total debt to income back-end ratio does not exceed 43%*
~
*If loan conforms to guidelines set forth by Fannie & Freddie
(aka Conventional loans,) FHA, VA, USDA then loan is
automatically a QM UNTIL Oct 1, of 2022
~
Ability to Repay: 5 Years
88
90. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
The Secondary Market: Gov Loans
Banks and lenders bundle government loans into a
pool of mortgage backed securities, called Ginnie
Mae Bonds.
GNMA = Government National Mortgage Association,
nicknamed Ginnie Mae
Ginnie Mae guarantees principal and interest to
the investor, if the borrower does not make their
payment
90
91. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 10 The Secondary Market
The secondary market consists of different entities that
purchase residential mortgage loans from banks and non-
bank lenders. Once the loan is purchased, the money
returns to the banks and non-bank lenders so they may
re-lend the money over and over again. This helps
guarantee an ongoing flow of mortgage money available
to banks and non-bank lenders and ultimately consumers.
Not all banks and non-bank lenders sell their loans on the
secondary market. Some companies hold the loans in
their own portfolio. However, the majority of loans you
will be originating will be sold on the secondary market.
91
92. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 10 Fannie Mae and Freddie Mac
Responsibilities
Conventional loan programs
Limits on closing cost concessions
Loan Level Pricing Adjustments
AUS
N.O.O. rental 20%
Acceptable down payment amounts
Hazard/fire insurance requirements
Pre-payment requirements
92
93. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 11 Government Loan Programs
Types of government guarantors
FHA
FHA Loan Limits
FHA Eligible Property
FHA’s required Mortgage Insurance Premium (MIP)
FHA monthly MIP scenarios
Practice: Calculate the Monthly MIP
Required Documentation
93
94. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 11, Module 11.7
Calculate MIP
Calculate the MONTHLY Mortgage Insurance
Premium for the following loan:
Loan Amount 450,000
30 year fixed
Loan to Value is greater than 95%
450,000. x .85 = $3,825.00 annually. Divided by 12 =
$318.75 per month
94
95. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 11 Mod 11.9 VA Loans
VA loan facts
VA loan limits
VA funding fee
Eligible property for a VA loan
Certificate of Eligibility (COE)
Entitlement
Acceptable funds for down payment and closing costs
Residual income
95
96. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 11 Mod 11.18 USDA loans
What is a USDA loan?
Minimum down payment
96
97. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 12 Most Common, Conforming
Loan PRODUCTS
Fixed Rate Mortgages (FRM)
Characteristics of a FRM
Situations that effect a FRM payment
Comparison of types of loan scenarios
Percentage of down payment to lessen
monthly payment
FRM’s with escrow
97
98. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 12 Most Common, Conforming
Loan PRODUCTS
Adjustable Rate Mortgages (ARMs)
Facts on ARM loans
Examples of ARM loans
Hybrid ARMs
Timeline for notifying customer of rate change
98
99. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 13 Non Traditional Mortgage Loans
Definition:
According to the SAFE Mortgage Licensing Act of
2008, the term “nontraditional mortgage product”
means any mortgage product other than a 30-year
fixed rate loan.
99
100. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 13: Statement on Subprime
Generally subprime borrowers will display a range of credit
risk characteristics that may include one or more of the
following:
1. Two or more 30-day delinquencies in the last 12 months,
or one or more 60-day delinquencies in the last 24 months
2. Judgment, foreclosure, repossession, or charge-off in the
prior 24 months
3. Bankruptcy in the last 5 years
4. Relatively high default probability as evidenced by, for
example, a credit bureau risk score (FICO) of 660 or below
5. Debt service-to-income ratio of 50% or greater
100
101. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 13 Mod 13.3
CSBS/AARMR Guidance on Non-Traditional
Lending
CSBS = Conference of State Bank Supervisors
AARMR = American Association of Residential Mortgage
Regulators
Oct 2006 those^ banking regulators published guidelines
on non-traditional lending.
101
102. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 13 CSBS/AARMR Guidance
Ability to repay
Watch for payment shock
Assure borrower understands the loan terms
Avoid misleading claims…payment, rates, refi-out
Risk management strategies
102
103. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 14 DFA: HPMLs
The Dodd Frank Act (full name: Dodd Frank Wall Street
Reform Act) was passed in 2010 and brought the
guidelines we just reviewed, into federal law.
Instead of subprime loans, we use new language to
describe subprime without saying that word:
Non-prime, Non-traditional, non-conforming, and now:
Higher Priced Mortgage Loans (HPMLs)
103
104. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Qualified Mortgages
~
Regular periodic payments that are substantially
equal
~
Loan term does not exceed 30 years
~
Total points and fees do not exceed 3% for loans
over $100,000
~
Total debt to income ratio does not exceed 43%
~
If loan conforms to guidelines set forth by Fannie
& Freddie (aka Conventional,) FHA, VA, USDA Loan
is automatically a QM Until 2021.
~
Ability to Repay: 5 Years
104
105. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Qualified Mortgages
~
Regular periodic payments that
are substantially equal
~
Loan term does not exceed 30
years
~
Total points and fees do not
exceed 3% for loans over $100,000
~
Total debt to income ratio does
not exceed 43%
~
If loan conforms to guidelines set
forth by Fannie & Freddie (aka
Conventional,) FHA, VA, USDA
Loan is automatically a QM Until
Oct of 2022
~
Ability to Repay: 5 Years
105
Higher Priced Mortgage
Loans (HPMLs)
Loans formerly known as Subprime
Non-Traditional = Any loan that’s not
a 30 year fixed rate mortgage
Non-prime
Non-QM
A loan is an HPML When:
Annual Percentage Rate (APR) is:
1.5 or more points higher on a fixed
rate mortgage
OR
2.5 or more points higher on a non-
conforming mortgage (jumbo)
OR
3.5 or more points higher for a
subordinate lien
When compared with the Average
Prime Offering Rate (APOR)
Ability to Repay: 7 years
106. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Average Prime Offering Rate (APOR)
sample test question
What are the trigger thresholds under the Dodd Frank
Act for Higher Priced Mortgage Loans?
1) The law superseded by the new subprime loans
is a ridiculous law with a funny name
2) 1.5 percentage points above the average
prime offering rate (APOR)
3) 2.5 percentage points above the average prime
offering rate (APOR)
4) There are no trigger thresholds.
106
107. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
107
Section 15
Higher Priced Mortgage Loan Products
Conforming Jumbo Loans
Non-conforming Jumbo Loans
Interest-only Mortgages
Balloon Payment Mortgages
Construction Loans
Hard Money
Private Money
Option ARMs
Reverse Mortgages (HECM)
Suitability
108. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 15
Module 15.9
Suitability
Break into small groups and come up with at least 2
loan program suggestions for the borrower scenarios in
the course book.
108
109. 20 Hour SAFE Comprehensive
Pre-Licensing and Exam Prep
Jillayne Schlicke
DAY 2
110. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Agenda
Washington State Law
Uniform State Law
SAFE Act Quiz
Case Study
Ethics
Consumer Protection
Fair Housing
Fraud
Anti-Money Laundering and Suspicious Activity Reports (SARS)
110
111. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
111
People on the left side
of the bell curve will
never understand
anything we give
them. They don’t
know how to balance
their checkbook.
Simple interest?
Compound Interest?
Everything we do is
WAY over their head.
People on the right
side of the bell curve
know more than we
know about the
mortgage machine,
rates, fees, your
compensation, when
is the right time to
buy or sell, etc.
Laws and rules are written for people
whose understanding of mortgage lending
is in the MIDDLE of the bell curve.
Once you are licensed, you will know MORE
than the average random person in the
middle of the bell curve.
We are not allowed to use our advanced
knowledge of the mortgage machine to
de-fraud people
112. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
112
Rate Points Consumer’s
Situation
Consumer Might
Decide to:
What This Means to
the Consumer
4.00% 1.0%
Lender
Credit
Consumer does not want
to pay a lot of cash up
front and can afford a
slightly higher monthly
payment.
Pay a slightly higher
payment each month. Pay
a higher interest rate over
the life of the loan and not
have to come up with any
money up front to cover
closing costs.
Consumer chooses a
higher rate of 4.00%, in
exchange for $2,000. To
cover closing costs.
Today: Consumer receives
$2,000.
Over the life of the loan:
Consumer pays slightly
more each month.
3.5% 0 Par Consumer is satisfied with
the rate and chooses not
to pay discount points to
buy a lower rate OR
choose a higher rate to
cover closing costs with a
lender credit.
Pay zero points The par rate does not
require consumer to pay
points.
The par rate does not
provide a lender credit.
3.00% 1.0%
Discount
Points
Consumer plans to keep
the mortgage for a long
time. Consumer can
afford to pay more cash
at closing.
Consumer wants a slightly
lower payment
Pay discount points and
select a lower rate. This
will save the consumer
money over the life of the
loan.
Consumer might agree to
pay $2,000. more in
closing costs in exchange
for a lower rate of
3.005%.
Now: Pay $2,000.
Over the life of the loan:
Pay slightly less each
month
113. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
113
Section 16
SAFE Mortgage Licensing Act
The SAFE Act of 2008
SAFE = Secure and Fair Enforcement Act
Passed in order to increase uniformity, reduce
regulatory burden, enhance consumer protection, and
reduce fraud. Establishes the Nationwide Mortgage
Licensing System and Registry.
Title V SAFE Mortgage Licensing Act of 2008
http://mortgage.nationwidelicensingsystem.org/SAFE/NMLS%20
Document%20Library/SAFE-Act.pdf
114. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 16 SAFE ACT
1. Provides uniform license applications and reporting requirements for
State-licensed loan originators.
2. Provides a comprehensive licensing and supervisory database.
3. Aggregates and improves the flow of information to and between
regulators.
4. Provides increased accountability and tracking of loan originators.
5. Streamlines the licensing process and reduces the regulatory burden.
6. Enhances consumer protections and supports anti-fraud measures.
7. Provides consumers with easily accessible information, offered at no
charge, utilizing electronic media, including the Internet, regarding
the employment history of, and publicly adjudicated disciplinary and
enforcement actions against, loan originators.
8. Establishes a means by which residential mortgage loan originators
would, to the greatest extent possible, be required to act in the
best interests of the consumer.
114
115. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 16 SAFE ACT
State Examination Authority. The State may:
1. Review, investigate and examine any loan
originator, as often as necessary
2. Examine books and records
3. Retain authority
4. No person may destroy records
The State has broad enforcement authority
115
116. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 16 SAFE Act
State Exam Authority
Definitions
Licensing or registration
Supervised processors and underwriters
Independent contractors
116
117. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
117
Section 16 SAFE Act
“Registered Loan Originator”
An employee of:
a depository institution;
a subsidiary that is:
owned and controlled by a depository
institution AND
regulated by a federal banking agency OR
An institution regulated by the Farm Credit Admin
Title V SAFE Mortgage Licensing Act of 2008
http://mortgage.nationwidelicensingsystem.org/SAFE/NMLS%20
Document%20Library/SAFE-Act.pdf
118. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
118
Section 16 SAFE Act
State or Federally Chartered Depository
Banks:
Bank LOs are exempt from testing and education.
Bank LOs are NOT exempt from “registering.”
Register with the Nationwide Mortgage Licensing
System (NMLS) and will be given a unique identifier.
“Registered” LOs
Title V SAFE Mortgage Licensing Act of 2008
http://mortgage.nationwidelicensingsystem.org/SAFE/NMLS%20
Document%20Library/SAFE-Act.pdf
119. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
119
Section 16 SAFE Act
Issuance of a License
Never revoked
No felony last 7 years
No felony at any time re fraud, dishonesty, breach of
trust, money laundering
Financial responsibility
Pre-licensing education
Written test
Net worth or surety bond
Title V SAFE Mortgage Licensing Act of 2008
http://mortgage.nationwidelicensingsystem.org/SAFE/NMLS%20
Document%20Library/SAFE-Act.pdf
120. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
120
Section 16 SAFE Act
LO exam:
75% to pass
Can retake 3 X at 30 day intervals
If fail 3 X, must wait 6 months
5 year lapse in license: must retake the test
Title V SAFE Mortgage Licensing Act of 2008
http://mortgage.nationwidelicensingsystem.org/SAFE/NMLS%20
Document%20Library/SAFE-Act.pdf
121. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
121
Section 16 SAFE Act
Continuing Ed
3 hours Federal Law
2 hours Ethics, Consumer Protection, Fraud, Fair
Housing
2 hours Non Traditional Lending
1 hour Undefined
No carry-overs
Can’t take the same class each year.
Title V SAFE Mortgage Licensing Act of 2008
http://mortgage.nationwidelicensingsystem.org/SAFE/NMLS%20
Document%20Library/SAFE-Act.pdf
122. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
122
Section 16 Model State Law
Module 16.6 Definitions
Module 16.7 Exemptions
Module 16.8 Issuance of License
Module 16.9 Pre-Licensing of LOs
Module 16.10 Licensing Renewals
Module 16.11 Enforcement Authority
Module 16.12 Investigations & Exam
Module 16.13 Prohibited Practices
Module 16.14 Unique Identifier
Module 16.15 Initial Registration
Module 16.16 Records Retention
123. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 16 SAFE Act/Uniform State
Content
Take the SAFE Act/Model State Law Quiz
123
124. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 17 Ethics
1) What is ethics?
2) Who do you admire, living or dead? Why do you
admire that person?
3) Have you ever faced an ethical dilemma in
business? How did you solve it?
124
125. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
125
Aristotle Kant J.S. Mill
Respect
honesty
(promotes
autonomy)
Loyalty
Responsibility
Integrity
Beneficence
Non-maleficence
Compassion
Justice
384 BC-322 BC
Duty-based
ethics
If we have a
duty to do
something,
we ought do
it.
What I want for
myself, I must
also want for
the other.
1724-1804
Utilitarianism
Maximize good
consequences for
the most number
of people and also
minimize bad
consequences
for the most
number of people
1806-1873
126. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 17 Ethics
Ethics
When there’s no clear statement in the law telling
us what to do.
“Ought, should.”
Law
Minimum moral standard
“Have to”
126
127. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 17 Ethics
Different sources of moral authority
Religion
We can’t use religion to solve ethical dilemmas
when holding a professional role because there are
thousands of different religions in the world.
Which one would we use?
Intuition
Intuition can sometimes steer us in the wrong
direction
Emotion
“If I can’t sleep at night it’s not ethical.”
If the only reason we’re choosing to do/not do
something is out of fear, that’s a pretty low
standard of motivation 127
128. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
128
Section 17 Ethics
Moral Development
The intrinsic worth, value and dignity
of all human persons.
Some laws might not be moral
Law , society’s rules
The good, norms, roles, shared values
Practical agreements
Morality comes from external sources
22+
16 to 22
12 to 16
6 to 12
3 to 5
0 to 2
129. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
What is ethics? Who do you admire?
Compassion
Empathy
Beneficence
To to good
Non-maleficence
to avoid harm
129
Honesty
Respect for persons
Integrity
consistent commitment
to a set of values
Trust…loyalty
Responsibility
Responsive to a set of job
duties
130. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 17 Ethics
Different sources of moral authority
Written codes of ethics
There is no source of moral authority over
LOs other than the law. What written codes
of ethics that do exist are voluntary and not
mandatory. The written codes of ethics that
exist are weak, vague, have no sanctions for
violations and in most cases, just simply re-
state federal law.
Philosophical ethics
Moral philosophical ethical theories can take
the place of a mandatory code of ethics
until one is written.
130
131. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
131
Aristotle Kant J.S. Mill
Respect
honesty
(promotes
autonomy)
Loyalty
Responsibility
Integrity
Beneficence
Non-maleficence
Compassion
Justice
384 BC-322 BC
Duty-based
ethics
If we have a
duty to do
something,
we ought do
it.
What I want for
myself, I must
also want for
the other.
1724-1804
Utilitarianism
Maximize good
consequences for
the most number
of people and also
minimize bad
consequences
for the most
number of people
1806-1873
132. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
132
Are Loan Originators “Professionals?”
Specialized knowledge
Formal, pre-licensing education
Mandatory continuing education
Test
Licensing
Fiduciary Duties (Reminder: The SAFE Act contains a requirement
to act in the best interests of the consumer.)
Code of ethics with sanctions for violations
^This is not yet in place, so LOs are classified as “an emerging
profession.”
133. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
133
Fiduciary Duties Come from Agency Law
Agency:
Consent by one person (principal) that the
other (agent) act on his or her behalf.
Agency can be created by oral or written
agreement OR it may be implied through
conduct.
“I can get you the best loan”
“I can get you the best rate”
Section 17 Ethics
134. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
134
Duty of Loyalty
Duty of Care
What Fiduciary does will,
in good faith, advance the
interests of the client and
not the Fiduciary’s
personal interests
Act in good faith
Reasonable person test
Informed
Section 17 Ethics
135. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
135
Manipulation
Coercion
Completely
Controlled
Influences
Completely
Non-Controlled
Influences
Persuasion
Substantially
Not Controlling
Substantially
Controlling
Section 17 Ethics
136. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
136
Section 17 Ethics
Fiduciary Duties May Include…
1. Disclose all loan information to
the borrower
2. Act in good faith and deal fairly
3. Avoiding secret fees or
undisclosed fee splitting
4. No self dealing
137. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
137
Fiduciary Duties are Higher When…
LO has higher level of knowledge,
experience, skills
Client has limited knowledge
Client is relying exclusively on you
Greater the imbalance the higher the duty
Section 17 Ethics
138. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 17 Ethics: A Methodology
1. Define the problem
2. Collect facts
3. Reframe
4. Is this a legal issue?
5. Are you a manager?
6. Are you a partner?
7. Formal policies at
your company?
138
8. Professional Code of
Ethics?
9. Identify values
10. Consider all choices
11. Good reasons for and
against each choice
12. Decide
13. Act
14. Reflect
139. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
139
Are Loan Originators “Professionals?”
Specialized knowledge
Formal, pre-licensing education
Mandatory continuing education
Test
Licensing
Fiduciary Duties (Reminder: The SAFE Act contains a requirement
to act in the best interests of the consumer.)
Code of ethics with sanctions for violations
^This is not yet in place, so LOs are classified as “an emerging
profession.”
140. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Strategy for any question on the test
containing the word, “ETHICS”
Regulators do not regulate ethics, they regulate law.
It is the job of an industry to self-regulate the
ethical conduct of its members.
Our regulators see “ethics” through a legal lens:
consumer protection, fraud, fair housing
Ask yourself: What is in the best interest of my
client?
140
141. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Sample Ethics Question
Q: An appraiser approaches you with a deal to give
you the values you need in exchange for referrals of
your next 10 appraisals.
a. This is unethical
b. This is allowed under certain circumstances
c. This is only allowed with a special agreement fee
worksheet approved by DFI
d. This conduct could be allowed but only if the
appraisal company was owned by the mortgage
company
141
142. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Sample Ethics Question
A LO discovers that his/her co-worker is signing
client documents for the client. The LO asks
his/her co-worker about this practice, and the co-
worker answers, “my customer gave me permission
to sign her name on her behalf.”
a. This is unethical
b. It’s possible that this could be allowed
c. Federal law “signatures are cool” allows this
d. This practice is normal
142
143. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 18
Consumer Protection Case Study
Carnell v. KMC Funding
Read the case. Break into small groups and discuss the
case with members of your small group.
Elect a group leader and share your answers with the
rest of the class.
143
144. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
144
1968 Civil Rights Act
1968 Fair Housing Act
~
Protected Classes:
Race
Color
Religion (Creed)
Sex
LGBTQ added in 2021 by
executive order.
National Origin
Familial Status
Disability
Section 19
Fair Housing
Intent v. Effect
Realtors and lenders
have great power to
affect neighborhoods
Fair Housing/Fair Lending
http://www.hud.gov/offices/fheo/lending/index.cfm
145. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Intent v. Effect
It doesn’t matter what our good intentions are.
The only thing that matters is the effect, or the result
of our actions.
If we treat people differently based on nothing but
their protected class, we have violated Fair Housing.
Disparate Impact
145
146. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Additional protected classes in WA State
Sexual orientation
Gender identity
Honorably discharged military Veteran
The use of a service animal
Retaliation against a whistleblower
146
147. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 19
Redlining
Denying or
increasing the
cost of
services to
residents of a
racially
specific
geographical
area
Steering
Guiding
prospective
homebuyers to
or away from a
specific
neighborhood
based on his/her
race
147
Blockbusting
Encouraging
white property
owners to sell
their homes at a
loss by
fraudulently
implying that
racial or
religious
minorities were
moving into their
neighborhood
Fair Housing/Fair Lending
http://www.hud.gov/offices/fheo/lending/index.cfm
148. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 19 Module 19.4 Fair Lending
In Mortgage Lending: No one may take any of the
following actions based on race, color, national
origin, religion, sex, familial status or handicap
(disability):
Refuse to make a mortgage loan
Refuse to provide information regarding loans
Impose different terms or conditions on a loan, such as
different interest rates, points, or fees
Discriminate in appraising property
Refuse to purchase a loan or
Set different terms or conditions for purchasing a loan.
Fair Housing/Fair Lending http://www.hud.gov/offices/fheo/lending/index.cfm
148
149. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 19 Module 19.7
Fair Housing Thought Questions
Should we make a woman on maternity leave return
to work before counting her income when qualifying
for a loan?
Should we make long term disabled applicants
provide additional documentation proving that they
will stay disabled?
149
Fair Housing/Fair Lending http://www.hud.gov/offices/fheo/lending/index.cfm
150. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Sample Test Question:
Verification of Employment confirms employment of your
applicant and probability of employment is “excellent.”
In the comments box: “on maternity leave.”
1. Lender should close the loan.
2. Lender should not originate loans to new parents.
3. Lender should originate the loan only after asking
female applicant to provide additional
documentation and detailed motivational letter
regarding her intent to return to work.
4. Lender should follow some law you’ve never heard
of.
150
151. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 19 Module 19.7
Fair Housing Thought Questions
A mortgage company creates a policy that they
will not lend money on manufactured housing.
Could this create a Fair Housing violation?
151
Fair Housing/Fair Lending http://www.hud.gov/offices/fheo/lending/index.cfm
152. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 19 Module 19.8
Disparate Impact: Intent v. effect
Under Fair Housing, the lender’s good intentions
of lending on good quality collateral or our
intent to make sure that people have the ability
to repay do not matter. Instead, the effect of
our lending decisions is what matters.
If the effect of our lending decisions treats
people differently like higher rates, fees, more
documentation, or creates more segregated
neighborhoods, we have violated Fair Housing.
152
Fair Housing/Fair Lending http://www.hud.gov/offices/fheo/lending/index.cfm
153. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 19 Module 19.5: Redlining
Fair Lending Case Study:
U.S. and CFPB
v.
Bancorp South
153
156. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 20 Mortgage Fraud
Fraud for Housing, or fraud for property, is
perpetrated by borrowers and/or one or more
industry professionals when they misrepresent
information on the loan application. This type of
fraud does not usually result in significant losses to
a financial institution.
156
FBI
US Department of Justice
Financial Crimes Report to the Public 2010-2011
http://www.fbi.gov/stats-services/publications/financial-crimes-report-2010-2011
157. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 20 Mortgage Fraud
Fraud for profit consists of systematic transactions by
industry professionals who are attempting to steal a
significant amount of the funds associated with one or
more mortgage transactions. This type of fraud usually
involves multiple parties in various disciplines within the
mortgage industry, such as mortgage originators,
appraisers, real estate brokers, escrow closers, builders
and title companies. Fraud for profit usually results in
significant—if not catastrophic—losses to financial entities
involved in mortgage loan transactions and it is of major
concern to the mortgage industry
157
FBI
US Department of Justice
Financial Crimes Report to the Public 2010-2011
http://www.fbi.gov/stats-services/publications/financial-crimes-report-2010-2011
158. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 20 Module 20.2
General Red Flags of Mortgage Fraud
Red flags are inconsistencies in the information
presented in an application or a loan file that would
cause someone to take a second look or be
suspicious. Red flags are potential indicators that
should be explored; but they do not necessarily
mean that fraud occurred.
Lenders can help protect themselves if they can
identify red flags and learn to sense when something
“isn’t quite right.”
158
159. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 20 Module 20.3
Loan Application Red Flags
Occupancy
Borrower and co-borrower scenarios
Employment and income fraud
Information supplied by borrowers
Undisclosed income
Assets, bank activity, deposits
Liabilities
Credit
Down payment fraud: gifts, silent second
159
160. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 20 Mortgage Fraud
Appraisal Fraud
Fraud at settlement/escrow
Cyber crime
Red flags on the purchase and sales agreement
Change of info from the initial loan app
160
161. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 20 Mortgage Fraud
Module 20.10
Requirement to Report Mortgage Fraud
All employees who work for a depository bank,
non-bank lender, or mortgage broker are
required to promptly report possible mortgage
fraud to their supervisor.
161
162. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 20 Mortgage Fraud
Module 20.10
Mortgage Fraud is investigated by the Federal
Bureau of Investigation and is punishable by up
to 30 years in federal prison or $1,000,000 fine,
or both. It is illegal for a person to make any
false statement regarding income, assets, debt,
or matters of identification, or to willfully
overvalue any land or property, in a loan and
credit application for the purpose of influencing
in any way the action of a financial institution.
162
163. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 21
Bank Secrecy Act of 1970 Nixon
U.S. Patriot Act of 2001 W.
SARS: Suspicious Activity Reports
AML: Anti Money Laundering
163
Financial Crimes Enforcement Network
Anti-Money Laundering Program and Suspicious Activity Report Filing
Requirements for Residential Mortgage Lenders and Originators
AGENCY: Financial Crimes Enforcement Network (‘‘FinCEN’’), Treasury.
ACTION: Final rule.
Federal Register / Vol. 77, No. 30 / Tuesday, February 14, 2012 / Rules and
Regulations Page 8159
Subpart C—Reports Required To Be Made by Loan or Finance Companies
http://www.gpo.gov/fdsys/pkg/FR-2012-02-14/pdf/2012-3074.pdf
164. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 22 Practice Quiz
Take the practice quiz:
Ethics, Consumer Protection, Fraud, Fair Housing,
SARS/AML
164
165. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 22
Reflect on everything learned today and yesterday.
…any final questions?
Preview of tomorrow.
165
166. 20 Hour SAFE Comprehensive
Pre-Licensing and Exam Prep
Jillayne Schlicke
DAY 3
167. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
CFPB =
Consumer Financial Protection Bureau
All federal laws governing mortgage lending
are now regulated by the CFPB with one
exception:
Fair Housing stays with HUD
Each state also regulates it’s own state laws
governing mortgage lending. State laws can
be tougher than federal law.
167
168. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 23 CFPB Core Functions
Rooting out unfair, deceptive, or abusive acts or
practices by writing rules, supervising
companies, and enforcing the law
Enforcing laws that outlaw discrimination in
consumer finance
Taking consumer complaints
Enhancing financial education
Researching the consumer experience of using
financial products
Monitoring financial markets for new risks to
consumers
168
169. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 23 CFPB Consumer Complaints
1. Complaint submitted
2. Review and route
3. Company responds
4. Complaint published
5. Consumer review
Consumer complaint database:
https://data.consumerfinance.gov/dataset/Consumer-
Complaints/s6ew-h6mp
169
170. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 23 HUD
Programs offered by HUD
Community Planning and Development
Federal Housing Administration (FHA)
Public and Indian Housing
Fair Housing
Policy Development
Government National Mortgage Association (Ginnie Mae)
Office of Housing Counseling
Lead Hazard Control and Healthy Homes
170
171. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 23 HUD
HUD oversees the following entities:
Banks, Lenders, Mortgage Brokers
Real Estate Brokers
Appraisers
Housing Counselors
Housing Inspectors
Landlords
Non-Profits
HUD Grant Recipients
171
172. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
The Main Fed Law Acronyms
TILA
Truth in Lending Act
MDIA
Mortgage Disclosure Improvement Act
RESPA
Real Estate Settlement
And Procedures Act
TRID
TILA/RESPA Integrated Disclosure
ECOA
Equal Credit Opportunity Act
SAFE
Secure and Fair Enforcement Act 172
173. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Patterns
What was going on in the late 1960s and 1970s in the
United States?
The Economy?
The American Family?
If you understand WHY a law was passed, you will be
able to isolate and rule out the two, dead-wrong
answers. Two answers will remain. One will be a little
bit better than the other.
173
174. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Federal
Laws
The laws shown in
blue were passed
during the late
1960s/early 1970s and
notice that we are
currently living
through another wave
of consumer
protection laws
directed at the
mortgage lending
industry.
Truth in Lending Act
2009 Changes to TILA = MDIA
2011 FRB Rule on LO Comp
R.E. Settlement and Proc. Act
2010 Dodd Frank Act
2015 TRID
Equal Credit Opportunity Act
Fair Credit Reporting Act
Fair Housing
Other Fed Laws
2008 SAFE Act
2010 Dodd Frank Act
2015 TILA/RESPA Integrated Discl.
174
175. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
175
To promote informed use of credit.
Requires disclosure of Annual Percentage Rate (APR)
Gives consumers the right to cancel some transactions
(owner occupied refi)
Imposes cost limits on home equity loans
Regulates variable rate loans
CHARM Booklet required on ARM loans
continued
Section 24 Module 24.2 TILA Core Concepts
Truth in Lending Act
http://www.fdic.gov/regulations/laws/rules/6500-200.html
176. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
176
Delineates and prohibits unfair and deceptive mortgage
lending practices
At the beginning of the transaction:
Consumers receive disclosures 3 days from date on
the loan application.
At the end of the transaction:
Consumers receive their final disclosures 3 days prior
to consummation (signing.)
Section 24 Module 24.2 TILA Core Concepts
continued
Truth in Lending Act
http://www.fdic.gov/regulations/laws/rules/6500-200.html
177. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 24 Module 24.3 TILA
Loans Covered by TILA and Regulation Z
1. Purpose of credit is for personal, family, or
household use, and;
2. Credit is extended to a consumer, and;
3. Credit is extended by a creditor (a lender,) and;
4. Credit or loan is secured by real property
(dwelling.)
177
178. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 24 Module 24.3 Definitions
Business Day
Business day means a day on which the creditor's
offices are open to the public for carrying on
substantially all of its business functions.
Generally, all calendar days except Sundays and the
legal public holidays specified in 5 U.S.C. 6103(a),
such as New Year's Day, the Birthday of Martin
Luther King, Jr., Washington's Birthday, Memorial
Day, Independence Day, Labor Day, Columbus Day,
Veterans Day, Thanksgiving Day, and Christmas
178
179. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
TILA requires us to quote APR when
quoting a note rate
A. Actually available terms
B. Clear and conspicuous standard
C. Finance charge advertising rules
D. Additional disclosures required
E. Catalog, multi-page, electronic ads
F. Disclosures
G. TV and radio ads
H. Taxes and insurance
I. Prohibited practices
179
180. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
180
Annual Percentage Rate/APR
The cost of the loan expressed in the form of a rate
that has been annualized over one year.
APR was designed as a shopping tool for consumers.
The APR calculation contains the following:
Loan amount, closing costs, note rate, loan term.
APR is always quoted when we quote a note rate.
We are allowed to use a sample APR for
advertising.
Tolerances
Section 24 Truth in Lending Act
Truth in Lending Act
http://www.fdic.gov/regulations/laws/rules/6500-200.html
181. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
181
APR Tolerances…Can we make a mistake
and still be in compliance? Yes:
Example:
|________|_______ APR 7.75_______|________|
.25 .125 .125 .25
ARM FRM FRM ARM
ARM = Adjustable Rate Mortgage
FRM = Fixed Rate Mortgage
Truth in Lending Act
http://www.fdic.gov/regulations/laws/rules/6500-200.html
182. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Common consumer question:
What finance charges (also called settlement costs
or closing costs) are included when calculating APR?
At a typical mortgage company, software systems
are already programmed to do this for LOs.
However, customers ask questions about the TILA
disclosure forms and regulators expect licensees to
know how to answer basic questions about the
information contained in the TILA disclosure form.
182
Section 24 Truth in Lending Act
A closer look at APR (Annual Percentage Rate)
Truth in Lending Act
http://www.fdic.gov/regulations/laws/rules/6500-200.html
183. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Included
Prepaid interest
Mortgage insurance premiums
Wire transfer fees
Recording fees
Loan origination fee
Underwriting fee, processing
fee, admin
Mortgage broker fee
Escrow fee (also called settlement or
closing)
Borrower paid discount points
Flood Ins. premiums
Pest inspection (VA only when prop is
located in mod to high probability of area of
pest infestation and lender is paying for it.
183
Hazard Insurance
(IF obtained from a
neutral company)
Seller paid discount
points
Document prep fee
Title insurance
Notary fee
Appraisal
Credit report
Impounds for taxes & ins
Flood Hazard Check
Excluded
http://www.fdic.gov/regulations/laws/rules/6500-200.html
184. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 24 Module 24.3 Definitions
Finance Charge
The finance charge is a measure of the cost of
consumer credit represented in dollars and cents.
Along with APR disclosures, the disclosure of the
finance charge is central to the uniform credit cost
disclosure envisioned by the TILA.
The finance charge does not include any charge of a
type payable in a comparable cash transaction.
184
185. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
185
Section 24 Truth in Lending Act
A closer look at APR (Annual Percentage Rate)
Tip: How to remember which costs are included/excluded
when calculating APR:
Costs included
These are costs
that benefit the
lender or costs
that the lender
requires in order
to obtain a loan.
Costs excluded
These are costs
that are paid to
and benefit third
parties other than
the lender.
Truth in Lending Act
http://www.fdic.gov/regulations/laws/rules/6500-200.html
186. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Sample APR question
If seller contributes 1% to buy down the interest rate
and the buyer also contributes 1% to buy down the
interest rate, what is included in the APR calculation?
A. buyer’s 1%
B. seller’s 1%
C. neither
D. both the buyer and seller’s 1% for a total of 2%
discount points included in the APR Calc.
186
187. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Sample APR question:
What items are included when we calculating APR?
a) loan amount, closing costs
b) term, note rate, loan amount, appraisal
c) Prepaids, term, note rate, loan amount
d) term, note rate, loan amount
187
188. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Sample APR Question:
What is the APR for the following loan?
Closing costs: $2,000
Loan term: 360 months
Note rate: 5.0%
Loan amount: $200,000
a) 5.0
b) 4.9
c) 5.08
d) 6.98
188
189. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 24 MDIA
Consumer fees
Re-disclosure
Timing
Seven business day waiting period
Waiver of waiting period
Consumer notice
Imposition of fees
Interactions with appraisers
189
190. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Federal
Laws
The laws shown in
blue were passed
during the late
1960s/early 1970s and
notice that we are
currently living
through another wave
of consumer
protection laws
directed at the
mortgage lending
industry.
Truth in Lending Act
2009 Changes to TILA = MDIA
2011 FRB Rule on LO Comp
R.E. Settlement and Proc. Act
2010 Dodd Frank Act
2015 TRID
Equal Credit Opportunity Act
Fair Credit Reporting Act
Fair Housing
Other Fed Laws
2008 SAFE Act
2010 Dodd Frank Act
2015 TILA/RESPA Integrated Discl.
190
191. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Sample MDIA Question:
is this ad deceptive?
Call us! Acme Mortgage for your 30 year loan!
1.50%
1.95% APR
a) Yes
b) No
c) This is a violation of the TILA/MDIA advertising
rules requiring loan terms be clear and
conspicuous.
d) It may or may not be deceptive depending on
the day of the week that ends in the word “day”
191
192. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
192
On an owner occupied refinance, the borrower
has 3 days after signing the final loan
documents to cancel and receive a full refund
from the lender. Lenders must refund any
money collected for third party services, even
if spent.
For TILA RESCISSION purposes, business days
include Saturday (full 24 hours.)
Can the 3 day right of rescission ever be
waived?
Section 24 Module 24.8 Truth in Lending Act
Rescission
Truth in Lending Act
http://www.fdic.gov/regulations/laws/rules/6500-200.html
193. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 24 TILA Module 24.8
Case Study: What is the first business day on
which funds may be disbursed if:
Signing date: Thurs, May 2
1st bus. day: Fri, May 3
2nd bus. day: Sat, May 4
Sun, May 5
3rd bus. day: Mon, May 6
The loan can fund on Tuesday May 7th
193
Truth in Lending Act
http://www.fdic.gov/regulations/laws/rules/6500-200.html
194. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
How many copies of the rescission notice are printed?
3
1---stays in the escrow closer’s file
2 are provided (not mailed) to the borrower
If the borrower rescinds, one is signed and mailed to
escrow, and the other the borrower keeps
194
Section 24 TILA Module 24.8
195. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
HOEPA
High Cost Mortgage Loans
H.O.E.P.A. =
Home Ownership and Equity Protection Act
Revised HOEPA Coverage Tests:
APR exceeds APOR by more than 6.5% for first lien
mortgages, or;
APR exceeds APOR by 8.5% for first lien mortgages
under $50,000. or;
APR exceeds APOR by more than 8.5% for junior or
subordinate liens.
195
196. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Qualified
Mortgages
Regular periodic payments
that are substantially equal
~
Loan term does not exceed
30 years
~
Total points and fees do not
exceed 3% for loans over
$100,000
~
Total debt to income ratio
does not exceed 43%
~
If loan conforms to
guidelines set forth by
Fannie & Freddie (aka
Conventional,) FHA, VA,
USDA Loan is automatically a
QM Until 2021.
Ability to Repay: 5 Years
196
Higher PRICED
Mortgage Loans
HPMLs
Loans formerly known as
Subprime
Non-Traditional = Any loan
that’s not a 30 year fixed
rate mortgage
Non-prime
Non-QM
A loan is an HPML When:
Annual Percentage Rate (APR)
is:
1.5 or more points higher on a
fixed rate mortgage OR
2.5 or more points on a non-
conforming loan OR
3.5 or more points higher for a
subordinate lien
When compared with the
Average Prime Offering Rate
(APOR)
Ability to Repay: 7 Years
High COST
Mortgages
~
H.O.E.P.A.
Home Owner Equity
Protection Act
Originally for second mortgages,
also known as Home Equity
Lines of Credit. These are VERY
EXPENSIVE mortgages, with
higher costs due to a higher
risk.
~
Annual Percentage Rate (APR)
exceeds Average Prime Offering
Rate (APOR) by more than:
~
6.5% for first lien mortgages
OR
8.5% for first lien mortgages
under $50,000.
OR
8.5% for junior or subordinate
liens.
~
Borrower must attend a
counseling class
197. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Fun Fact
High-Cost loans are considered “Section 32
loans”
12 CFR 1026.32
Higher Priced loans are considered “Section 35
loans”
12 CFR 1026.35
…because these are the names of the sections
within the Truth in Lending Act, that describe
these loans.
197
198. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
HOEPA Thresholds for 2021
Effective January 1, 2021 for purposes of determining under
§ 1026.32(a)(1)(ii) the points-and-fees coverage test under
HOEPA to which a transaction is subject, the total loan
amount threshold is $22,052, and the adjusted points-and-
fees dollar trigger under§ 1026.32(a)(1)(ii)(B) is $1,103.
If the total loan amount for a transaction is $22,052 or more,
and the points-and-fees amount exceeds 5 percent of the
total loan amount, the transaction is a high-cost mortgage.
~
If the total loan amount for a transaction is less than
$22,052, and the points-and-fees amount exceeds the lesser
of the adjusted points-and-fees dollar trigger of $1,103 or 8
percent of the total loan amount, the transaction is a high-
cost mortgage.
198
199. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 24 Module 24.9 TILA
Records Retention
General Records Retention
Lenders must retain TILA records on residential mortgage loans
for three years. Other federal or state laws may require
lenders to retain records for a longer period of time.
Closing Disclosure
Lenders must retain a copy of the Closing Disclosure for five
years
Loan Originator Compensation
Lenders must retain records of loan originator compensation for
3 years unless another federal or state law requires maintaining
LO compensation records for a longer time period.
199
200. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 24 Module 24.10 HOEPA
The following loans will be covered by HOEPA
APR exceeds APOR by 6.5% for first lien mortgages, or
8.5% for a first lien mortgage if the dwelling is personal
property and the transaction is under $50,000
The APR exceeds the applicable APOR by more than 8.5%
for subordinate and junior liens
Points and fees exceed 5% of the total transaction amount
or, for loans less than $20,000 the lesser 8% of transaction
amount or $1,000 (adjusted annually for inflation)
200
201. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 24 Module 24.10 HOEPA
A lender must provide a written list of HUD-approved, housing
counseling agencies to all applicants for federally-related
mortgages
It must list the ten counseling agencies that are closest to the
centroid of the zip code of the borrower’s current address, in
descending order of proximity to the centroid. Lenders, should
they choose can put in a more precise geographic marker like the
borrower’s street address. Additionally, they can give the borrower
the option of inputting a different location then the borrower’s
current zip code, but they are not required to do so.
The list must include the following text: “The counseling agencies
on this list are approved by the U.S. Department of Housing and
Urban Development
201
202. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Qualified
Mortgages
Regular periodic payments
that are substantially equal
~
Loan term does not exceed
30 years
~
Total points and fees do not
exceed 3% for loans over
$100,000
~
Total debt to income ratio
does not exceed 43%
~
If loan conforms to
guidelines set forth by
Fannie & Freddie (aka
Conventional,) FHA, VA,
USDA Loan is automatically a
QM Until 2021.
Ability to Repay: 5 Years
202
Higher PRICED
Mortgage Loans
HPMLs
Loans formerly known as
Subprime
Non-Traditional = Any loan
that’s not a 30 year fixed
rate mortgage
Non-prime
Non-QM
A loan is an HPML When:
Annual Percentage Rate (APR)
is:
1.5 or more points higher on a
fixed rate mortgage OR
2.5 or more points on a non-
conforming loan OR
3.5 or more points higher for a
subordinate lien
When compared with the
Average Prime Offering Rate
(APOR)
Ability to Repay: 7 Years
High COST
Mortgages
~
H.O.E.P.A.
Home Owner Equity
Protection Act
Originally for second mortgages,
also known as Home Equity
Lines of Credit. These are VERY
EXPENSIVE mortgages, with
higher costs due to a higher
risk.
~
Annual Percentage Rate (APR)
exceeds Average Prime Offering
Rate (APOR) by more than:
~
6.5% for first lien mortgages
OR
8.5% for first lien mortgages
under $50,000.
OR
8.5% for junior or subordinate
liens.
~
Borrower must attend a
counseling class
203. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Sample HOEPA question
What is the APR trigger on a first lien mortgage under
HOEPA?
a) APR exceeds APOR by 6.5%
b) APR exceeds APOR by 8.5%
c) APOR is not a factor
d) APR trigger rules are irrelevant on a first lien
mortgage under the special provisional “APR Sucks”
amendment to the HOEPA section of the Dodd Frank
Act.
203
205. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Federal
Laws
The laws shown in
blue were passed
during the late
1960s/early 1970s and
notice that we are
currently living
through another wave
of consumer
protection laws
directed at the
mortgage lending
industry.
Truth in Lending Act
2009 Changes to TILA = MDIA
2011 FRB Rule on LO Comp
R.E. Settlement and Proc. Act
2010 Dodd Frank Act
2015 TRID
Equal Credit Opportunity Act
Fair Credit Reporting Act
Fair Housing
Other Fed Laws
2008 SAFE Act
2010 Dodd Frank Act
2015 TILA/RESPA Integrated Discl.
205
206. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 25
Federal Reserve Board (FRB) rule
on Loan Originator Compensation
206
Module 25.1
Background
FTC v. Golden Empire Mortgage
Federal Reserve
Regulation Z: Loan Originator Compensation and Steering 12 CFR 226
http://edocket.access.gpo.gov/2010/pdf/2010-22161.pdf
207. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 25
Federal Reserve Board Rule on
Loan Originator Compensation
207
Module 25.2 Three main prohibitions:
P1: Compensation based on a transaction’s term
or conditions.
P2: Compensation by lender OR consumer but not
both.
P3: Prohibitions against steering.
Federal Reserve
Regulation Z: Loan Originator Compensation and Steering 12 CFR 226
http://edocket.access.gpo.gov/2010/pdf/2010-22161.pdf
208. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 25
Federal Reserve Board Rule on
Loan Originator Compensation
208
Module 25.2 Three main prohibitions:
P1: Compensation based on a transaction’s term
or conditions:
> Payment based on transaction terms or conditions.
> Compensation cannot go up or down based on the
loan’s terms or conditions.
> Minimum or max dollar amount of compensation
may not vary with each loan.
Federal Reserve
Regulation Z: Loan Originator Compensation and Steering 12 CFR 226
http://edocket.access.gpo.gov/2010/pdf/2010-22161.pdf
209. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 25
Federal Reserve Board Rule on
Loan Originator Compensation
209
Module 25.2 Three main prohibitions:
P2: Compensation by someone other than the
consumer.
If an LO will be compensated by the
consumer, the LO may not also receive
compensation from the lender funding the
loan, or any other person connected with
that transaction.
Federal Reserve
Regulation Z: Loan Originator Compensation and Steering 12 CFR 226
http://edocket.access.gpo.gov/2010/pdf/2010-22161.pdf
210. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 25
Federal Reserve Board Rule on
Loan Originator Compensation
210
Module 25.2 Three main prohibitions:
P3: Prohibitions against steering.
LOs may not steer a consumer to a loan only
because the LO will be compensated at a
higher rate by selling that product, unless the
loan is in the best interest of the consumer.
Federal Reserve
Regulation Z: Loan Originator Compensation and Steering 12 CFR 226
http://edocket.access.gpo.gov/2010/pdf/2010-22161.pdf
211. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 25 Module 25.5
Test your knowledge:
Complete the LO Comp practice quiz questions.
211
212. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 2 Module 2.0
Depository Bank
Checking,
savings
CAN fund its
own loans
LOs are
“registered”
212
Mortgage Broker
No ck/svgs
Does NOT fund its
own loans
Pure middleman.
Like an “agent”
For a fee, finds the
mortgage money
LOs are licensed.
In some states,
these LOs owe
fiduciary duties
to clients
Non-Depository
Lender
Non-Bank Lender
No ck/svgs
CAN fund its
own loans via
lines of credit
with banks
LOs are licensed
Consumer Loan
Act
213. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Federal
Laws
The laws shown in
blue were passed
during the late
1960s/early 1970s and
notice that we are
currently living
through another wave
of consumer
protection laws
directed at the
mortgage lending
industry.
Truth in Lending Act
2009 Changes to TILA = MDIA
2011 FRB Rule on LO Comp
R.E. Settlement and Proc. Act
2010 Dodd Frank Act
2015 TRID = TILA/RESPA Integrated
Disclosure Rule
Equal Credit Opportunity Act
Fair Credit Reporting Act
Fair Housing
Other Fed Laws
2008 SAFE Act
213
214. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 26 RESPA
RESPA =
Real Estate Settlement and Procedures Act
Definition of “Settlement Services”
RESPA defines “settlement” as any activity
surrounding the application, approval, and closing
of real estate transactions.
214
215. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 26 RESPA
Implemented by HUD as Regulation X, the original
purpose of RESPA was to do the following:
a) Eliminate kickbacks and referral fees;
b) Provide more effective advance disclosure of
settlement costs;
c) Reduce the amounts buyers were required to
place in escrow accounts (in loan servicing;) and
d) Provide reform and modernization for local
record keeping and land information.
215
216. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 26 RESPA: Mortgage Brokers
If the mortgage broker is the exclusive agent of
the institution, either the institution or the
broker must provide The Loan Estimate within
three business days after the broker receives or
prepares the application.
When the broker is not the exclusive agent of the
institution, the institution is not required to
provide The Loan Estimate if the broker has
already provided it.
However, the funding lender must ascertain that
The Loan Estimate has been delivered.
216
217. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 26 RESPA
RESPA is applicable to all federally related
mortgage loans.
Federally related mortgage loans are loans,
including refinances, secured by a first or
subordinate lien on residential real property upon
which:
A one- to four-family structure is located or is to be
constructed using proceeds of the loan (including
individual units of condominiums and cooperatives) or
A manufactured home is located or is to be
constructed using proceeds of the loan
217
218. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 26 RESPA
Exemptions:
25 acres or more
Business, commercial, agricultural loans
Temporary loans
Vacant land
Assumptions
Loan modifications
Transfer of loan servicing
218
219. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 26: Definition of “An Application”
Address
Loan amount sought
Income
Estimated value of the property
Name
Social security number
219
Real Estate Settlement and Procedures Act
http://www.hud.gov/offices/hsg/ramh/res/respa_hm.cfm
220. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Difference between Credit Pre-Approval
and an App: Financial Data
Borrower’s Name
Social Security Number
Income
Estimated value of the property
Loan amount sought
…..
Prop address (will have this if
refinance, might not have this
right away if borrower is still
house-shopping.)
…..
220
Real Estate Settlement and Procedures Act
http://www.hud.gov/offices/hsg/ramh/res/respa_hm.cfm
221. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Sample RESPA question
During a phone interview, borrower provides the loan
originator with her name, social security number, income,
estimated value of the home that she will be purchasing,
and the loan amount she needs, and the property address.
The loan originator has:
a) Taken a loan application.
b) Prequalified the borrower.
c) Prequalified the borrower and early disclosures will not be
sent out until the loan originator receives a fully executed
purchase and sales agreement signed by all parties.
d) Taken a loan application and early disclosures are due to be
sent to the borrower within three days.
221
222. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 26 RESPA
Early Disclosure Package: Loan Estimate
Within 3 days of the date on the loan application,
we send the early disclosures to our borrowers.
The Loan Estimate
If purchase-money loan: Your Home Loan Toolkit
If Adjustable Rate Mortgage, the CHARM Booklet
If HOEPA, the extra required HOEPA disclosures
Any other disclosures required by state and federal law
222
223. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
RESPA: Lender Required Use
When the lender requires that the borrower use a
certain settlement service provider, (for example, the
appraisal management company) the borrower is owed
an extra disclosure stating:
The use of the provider is required
Contact info of the provider
Description of the relationship between lender
and provider
Statement that there is is no affiliated business
relationship between the two companies.
223
224. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
RESPA: Affiliated Business Relationships
Prior to the referral, an affiliated business arrangement
disclosure statement is owed to the consumer. This disclosure
must specify both:
The nature of the relationship (explaining the ownership
and financial interest) between the provider and the
financial institution and
The estimated charge or range of charges generally
made by such provider
This disclosure must also be provided on a separate piece of
paper either at the time of loan application, or with the Loan
Estimate, or at the time of the referral.
Generally, the institution may NOT require the use of such a
provider
224
225. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
RESPA: Escrow Accounts (loan servicing)
The amount of escrow funds that may be
collected at settlement or upon creation of an
escrow account is restricted to an amount
sufficient to pay charges, such as taxes and
insurance, that are attributable to the period
from the date such payments were last paid
until the initial payment date.
225
226. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
226
Which entities must comply with the
anti-kickback provisions of RESPA?
Lenders (banks, lenders, brokers)
Real estate brokers/Realtors
Title and Escrow
Appraisers
Home inspectors
Mortgage insurance companies
Credit reporting agencies
Flood hazard check companies
Attorneys
Hazard insurance companies
Home warranty companies
Builders
Real Estate Settlement and Procedures Act
http://www.hud.gov/offices/hsg/ramh/res/respa_hm.cfm
227. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
RESPA Anti-kickbacks
RESPA Section 8:
Any person who gives or receives a fee or a thing
of value (a payment, commission, fee, gift, or
special privilege) for the referral of settlement
business is in violation of section 8 of RESPA.
Payments in excess of the reasonable value of
goods provided or services rendered are
considered kickbacks.
227
228. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
228
Q: What is an “un-earned fee?”
Un-earned fee, also called a kickback:
A fee we receive but we have performed no
work in exchange for receiving the fee.
Example: Referral fees given or received are a
violation of RESPA
Quid Pro Quo. This for that
Real Estate Settlement and Procedures Act
http://www.hud.gov/offices/hsg/ramh/res/respa_hm.cfm
229. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 26 RESPA
Violations of Section 8's anti-kickback, referral fees
and unearned fees provisions of RESPA are subject to
criminal and civil penalties.
In a criminal case a person who violates Section 8 may
be fined up to $10,000 and imprisoned up to one year.
In a private law suit a person who violates Section 8
may be liable to the person charged for the
settlement service an amount equal to three times
the amount of the charge paid for the service.
229
230. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
RESPA Kickbacks
Large group discussion on common scenarios LOs
may face once licensed.
Are any of these scenarios allowed under the
anti-kickback Section 8 of RESPA?
230
231. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Asked to sponsor an event
1) Be there
2) cannot pay for the entire event
3) Signage
4) Collateral …FLYERS
5) Speak at the event
6) No Quid pro quo
231
232. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
MSAs = Marketing Services Agreements
Examples:
CFPB v. Prospect Mortgage, Keller Williams and RE/MAX
CFPB v. Lighthouse Title
CFPB v. Planet Financial
232
234. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Federal
Laws
The laws shown in
blue were passed
during the late
1960s/early 1970s and
notice that we are
currently living
through another wave
of consumer
protection laws
directed at the
mortgage lending
industry.
Truth in Lending Act
2009 Changes to TILA = MDIA
2011 FRB Rule on LO Comp
R.E. Settlement and Proc. Act
2010 Dodd Frank Act
2015 TRID
Equal Credit Opportunity Act
Fair Credit Reporting Act
Fair Housing
Other Fed Laws
2008 SAFE Act
2010 Dodd Frank Act
234
235. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
235
LE --- (loan estimate)------Ellie?
CD ---- (closing disclosure)-------Seedy?
Try hard to not use these acronyms with consumers.
“CD” means something different to
Realtors: Commission Disbursement
Part of the Dodd Frank Act
Went into effect Oct 3, 2015
TRID
TILA RESPA Integrated Disclosure Rule
236. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
236
Section 27
TILA RESPA Integrated Disclosure Rule
Intent To Proceed
Real Estate Settlement and Procedures Act (2009 Changes)
http://www.federalreserve.gov/boarddocs/supmanual/cch/respa.pdf
Imposing fees on a consumer before the consumer has
received the Loan Estimate and indicated an “intent to
proceed” with the transaction.
A consumer may indicate intent to proceed in any manner
the consumer chooses, unless a particular manner of
communication is required by the creditor.
A consumer’s silence is not indicative of intent to proceed.
A creditor must document this communication to satisfy the
record retention requirements.
237. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 27
TILA RESPA Integrated Disclosure Rule
Rule regarding “worksheets”
There are other restrictions on the form of this
statement to assure it is not confused with the Loan
Estimate:
Must be in font size no smaller than 12-point font.
May not have headings, content, and format
substantially similar to the Loan Estimate or the Closing
Disclosure.