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.

1. +
8 Hour Comprehensive Loan Originator
Continuing Education 2016
CE Forward, Inc. DBA
Nat’l Assoc of Mortgage Fiduciaries
Jillayne Schlicke

2. +
CE Forward, DBA NAMF
NMLS Approved Course Provider
C-1400068
8 Hr LO Continuing Ed
C-6088
1 Hr WA State LO CE
C-6007
Instructor:
Jillayne Schlicke

3. +
Module 1
Introductions
 TURN OFF CELL PHONES &
laptops
 ALL AUDIBLE ALERTS OFF or
please turn the phone completely
off or leave it in your car
 Photo ID
 Please complete the sign-in sheet.
 I NEED YOUR MLO NUMBER to
report your attendance to the
NMLS. Pls put your MLO number
on the form.
 NMLS Rules of Student Conduct
 Please read and sign. A copy of
the NMLS Rules of Conduct are in
your course packet
Photo ID is mandatory

4. +
Welcome!
Cell phones and laptops off while class is in
session.
Breaks
Bathrooms
Coffee
Lunch
Side conversations

5. +
Agenda
Introductions
Objectives
Boundaries
Federal Law
Non Traditional Lending
Ethics
Consumer Protection
Fair Housing
Fraud
Evaluations
Certificates
Close

6. + Section 2 Federal Law: Module 2.1
TILA RESPA Integrated Disclosure Rule
We survived the TILA/RESPA integrated disclosure
transition in the fall of 2015. Let’s check in: How did
the implementation go at your company?
What kind of problems did you encounter during the
first few weeks of October?
Was there anything that surprised you about the
changeover to the new Loan Estimate and Closing
Disclosure—something that happened that you
weren’t prepared for?

7. + Section 2 Federal Law
Module 2.3 Appraisals for Higher Priced
Mortgage Loans Exemption Threshold
 Effective January 1, 2016, the exemption
threshold amount remains at $25,500.”

8. + Section 2 Federal Law:
Module 2.4 Minimum Requirements for
Appraisal Management Companies
 Under the rule, states may elect to register
and supervise AMCs

9. + Section 2 Federal Law:
Module 2.4 Min Requirements for AMCs
 Highlights:
 Independent Contractor Definition
 AMC/Appraisal Firm Distinction
 AMC Panel Threshold Size
 Trainee Appraisers Not Barred

10. + Section 2 Federal Law:
Module 2.4 Min Requirements for AMCs
Do you believe registering AMCs will help, hurt, or
make no difference?
What’s on your wish list for fixing the appraisal
management problem

11. +
Section 2 Federal Law
Module 2.5 HMDA Rules
HMDA New Rule Executive Summary
Background
Institutional Coverage
Transactional Coverage
Reportable Data
Collection and Reporting of Borrower Info
Data Submission Process
Disclosure Requirements

12. +
Section 2 Federal Law
Module 2.5 HMDA Rules
Handout:
Summary of Reportable HMDA Data

13. +
Section 2 Federal Law
Module 2.5 HMDA Rules
Q: Compare and contrast the existing HMDA required
data points with the new data points that will be
required in 2017. Do you believe this will help
companies gather better information to make sure the
company is complying with HMDA?
Q: Notice the new data point (44) on page 5 of the
handout. We will begin collecting the loan originator’s
MLO Number/NMLS ID number along with the HMDA
data for each loan application. What are the good
reasons for and against reporting the MLO number
along with the HMDA data?

14. + Module 2.6 UDAAP: Is this radio ad deceptive?
When is the right time to refinance your home? When
you can save money. But it can be an even better time
when we pay your closing costs. I'm Dan Smith from
Private Plus Mortgage.
Rates are still near historic lows and property values
are up. This gives you more money-saving
opportunities to lower your payments, drop PMI,
shorten your term, or pay off those credit cards.
And Private Plus can help you save even more by
paying your closing costs. We don’t roll them into the
loan, we actually pay them for you.
So even if your rate is in the 4’s, see how much
Private Plus can save you...

15. +
 http://www.privateplusmortgage.com/no-cost-loans/
 and the direct youtube link is here:
https://www.youtube.com/watch?v=iS8rQ6QMV0k&feature=you
tu.be

16. +
Section 2 Federal Law:
Module 2.6 UDAAP
Q1: Does the radio ad violate any laws?
If yes, which laws?
If no, why not?
Q2: Does the ad violate the UDAAP law?
Q3: Do you agree with how the mortgage company’s
president responded to my complaint? If you were
the president of this mortgage company, how would
you have responded?
Q4: What should we do?

17. + Section 2 Federal Law
Module 2.7 Diversity
 Q1: The Diversity standards were published in June
of 2015. What has your company done so far to
bring forth new policies regarding diversity in our
industry?
 Q2: How can diversity help a company succeed and
grow?
 Q3: What are some strategies that we can enact to
recruit and retain a diverse workforce?
 Q4: Do you believe the new diversity standards are
too weak, too strong, or about right?

18. +
WA State LO CE
WA DFI Statement of Charges
Kevin Killeen
Read, discuss w/your small group.

19. +
Section 2 Federal Law
Module 2.8 LO Compensation
 Small Group Assignment
 Break into small groups.
 Read the CFPB Consent Order against Guarantee
Mortgage
 Discuss the following questions in your small group.
Elect a group leader and share your results with the
rest of the class.

20. + Module 2.8 LO Comp
Q1: Paragraph (6) says, “Respondent paid monthly fees
to marketing services entities associated with each of its
branch offices. Respondent set the fees based on the
profitability of the associated branch. The owners of the
marketing services entities then drew the monthly fees
as additional compensation. Owners included branch
managers and LOs within the branch.”
What was really going on here?
Q2: How can mortgage companies compensate their
branch managers and LOs besides “a percentage of the
loan amount and stay within compliance of the Loan
Originator Compensation Rules?
Q3: What would be a fair penalty or fine?

21. +
Section 2 Federal Law: RESPA
Module 2.9 MSAs
Consumer Financial Protection Bureau
Compliance Bulletin 2015-05
October 8, 2015
RESPA Compliance and Marketing Services
Agreements

22. + Section 2 Federal Law: RESPA
Module 2.10 MSAs
CASE STUDIES
1. Wells Fargo, Chase and Genuine Title
2. New Day Financial and Veteran’s
Organization
3. PHH and Atrium Insurance
4. Realty South and Title South

23. + Section 2 Federal Law: RESPA
Module 2.11 MSAs Best Practices
 Something of Value
 A referral
 A quid-pro-quo agreement
The CFPB seems to take the position that the mere
entering into a contract with a person in a position to refer
settlement service business is a violation of Section 8 of
RESPA. This is very different from HUD’s treatment of
marketing services agreements

24. +

25. + Section 2 Federal Law: RESPA
Module 2.12 MSA Best Practices
 Example:
Social Media Co-Marketing
Home Scouting
DOES THIS COMPLY w/RESPA Section 8?

26. + Section 2 Federal Law: RESPA
Module 2.13 MSA Best Practices
 Example:
Social Media Co-Marketing
Boomtown
What do you think about this Facebook ad?
How can we critically analyze this ad program?
How can we obtain referrals w/no strings
attached?

27. + Section 2 Federal Law: RESPA
Module 2.14 MSA Best Practices
Example: Zillow
Does the Zillow co-marketing program appear to comply
with RESPA?
Those of you in class today who have spoken with a Zillow
salesperson about this program, how is Zillow selling their
co-marketing program?
What does Zillow’s terms of service say about this matter?
How could a licensed loan originator and real estate broker
structure the Zillow co-marketing agreement to be in
compliance with RESPA?

28. + Section 2 Federal Law: RESPA
Module 2.15 MSAs QUIZ
Take the RESPA/Co-Marketing Quiz
This is not a pop quiz. It’s a ROCK quiz.
Because you rock.
Review your answers

29. +
Section 3 Non-Traditional Lending
 Dodd Frank Act and Non-Traditional Mortgages
 Sr LO Opinion Survey: Non-QM/Non-Traditional

30. +
Section 4 SARS/AML
FinCEN
High End Cash Buyers
Gibraltar Bank
Marijuana Dispensaries
Auditor Troy Kelly
IRS Money Laundering Investigations

31. + Section 5 Ethics and Consumer Protection
 What do you remember from past ethics classes?
 What is ethics?
 Are we professionals, retail salespeople, or are we an
emerging profession?
 Law = have to
 Ethics = should, ought

32. + Section 5 Ethics and Consumer Protection
Module 5.2 Code for an Emerging Profession
Are you currently a member of a mortgage industry trade
association? If yes:
Have you known your association to every deny
membership to an individual or company due to violating
its ethical code?
If yes:
Is there an ethics committee and if so, what do they do?
Do they report to the membership on their actions?
If no:
Why not?
Would you voluntarily choose to follow the 2015 Draft
Model Code of Ethics we’ve been working on in our LO
CE classes?
Handout: 2016 Draft Model Code of Ethics

33. +
Profession v. non-profession
Specialized knowledge
License
Education PRE
CE
test
Code of ethics….sanctions
Not sales. Instead: fiduciary model.

34. + Section 5 Ethics and Consumer Protection
Module 5.3
Emerging Profession: Loan Origination
Comparison with Other Professions
Certified Financial Planner
Standards of Professional Conduct
Code of Ethics
Rules of Conduct
Practice Standards
Disciplinary Rules
Character Fitness Standards
Enforcement

35. + Section 5 Ethics and Consumer Protection
Module 5.3
Emerging Profession: Loan Origination
Comparison with Other Professions
Certified Financial Planner
Does the financial planning industry have a
good reputation with consumers?
Has the CFP designation resulted in more
ethical financial planners?
UPDATE RE FIDUCIARY STANDARD

36. + Section 5 Ethics and Consumer Protection
Module 5.3
Emerging Profession: Loan Origination
Comparison with Other Professions
National Association of Realtors
Code of Ethics
Standards of Practice
Ethics Arbitration Manual

37. + Section 5 Ethics and Consumer Protection
Module 5.3
Emerging Profession: Loan Origination
Comparison with Other Professions
Realtors
Do Realtors have a good reputation with
consumers?
Has the Realtor designation resulted in more
ethical real estate brokers?

38. + Section 5 Ethics and Consumer Protection
Module 5.3
Emerging Profession: Loan Origination
Comparison with Other Professions
Licensed LOs can join a trade group.
Example: Mortgage Bankers Association
Several different Certified Mortgage Banker
Designations
(Note that these designations are voluntary,
not mandatory)
Code of Ethics does not appear on the
national website.

39. + Section 5 Ethics and Consumer Protection
Module 5.3
Emerging Profession: Loan Origination
Comparison with Other Professions
Loan Originators
Does our industry have a good reputation
with consumers?
Has the Certified Mortgage Banker
designation resulted in more ethical loan
originators?

40. + Module 5.3
Emerging Profession: Loan Origination
Your Ideas
Should we re-enact the mortgage broker/mortgage
lender commission?
What can we do with the code we’ve written at the state
level?
Should we require membership in an association that
oversees ethical conduct?
Should we expand the mortgage broker fiduciary duty
law to include non-bank lenders?
What are your ideas?

41. +
Section 5
Fair Housing
1968 Civil Rights Act
1968 Fair Housing Act
~
Protected Classes:
Race
Color
Religion (Creed)
Sex
National Origin
Familial Status
Sexual orientation added in
2012 to Fair Lending
Disability
41
Intent v. Effect
Realtors and lenders
have great power to
affect neighborhoods

42. +
Section 5 Module 5.4
Fair Housing/Fair Lending
CASE STUDIES
 Associated Bank Redlining
 Gender Identity
 Disability Discrimination
 Disparate Impact

43. +
Section 5.5 Mortgage Fraud
 Intentional misrepresentation of a fact in relation
to a mortgage loan. Had the lender known of the
fact, the lender might not have made that loan.
 Fraud for housing
 e.g.; borrower lies about occupancy
Fraud for Profit
Individuals acting together in a group to
send many loans through one or more
lenders and most of them default leading
to large losses.

44. + Section 5 Mortgage Fraud
Module 5.5
State of WA
v.
Doug White and Diana Merritt
Partial Report of the Proceedings
Cause No. 14-1-02956-6

45. + Section 5 Mortgage Fraud
Module 5.5
State of WA
v.
Diana Merritt
Partial Report of the Proceedings
Cause No. 14-1-02955-8SEA
Selected Testimony of Loan
Originator Diana Merritt

46. +
Section 5 Mortgage Fraud
Module 5.5
Assignment:
Read the case study and testimony from the
loan originator.
In your small groups, discuss the questions at
the end of the case study.
Elect a group leader and share your answers
with the rest of the group.

47. Motivation
Opportunity
Rationale

48. +
Evaluation Forms
Required by NMLS
Anonymous/name not required
Course name: LO CE

49. +
Certificates
Attendance will be reported to the NMLS within 7 days or less
I will pay your NMLS “credit banking fee”
$1.50/hour/student
I will send you an email with confirmation.
Do not lose your certificates

50. +
THANK YOU!!
Jillayne Schlicke
206-931-2241
jillayne@ceforward.com
ceforward.com
mortgagefiduciaries.com

51. +
1 Hour WA State Loan Originator Continuing
Education 2016
CE Forward, Inc. DBA
Nat’l Assoc of Mortgage Fiduciaries
Jillayne Schlicke

52. +
WA State LO CE
DFI Update:
 Information Security
 Licensing Trends
 Common Violations
DFI Rulemaking
 Quiz
Case Study
 Killeen

53. +
WA State

54. +
WA State LO CE
DFI Rulemaking
OPEN BOOK QUIZ
Complete the quiz with the people in your
small group.

55. +
WA State LO CE
Case Study:
DFI Statement of Charges: Killeen