Full slides from NAMB / HUD Dec. 1 webinar. The purpose of this particular NAMB / HUD webinar is to give mortgage brokers a high level overview of the general changes that they need to be aware of.

1. What Originators Need to Know
about RESPA, FHA Broker
Approval and Appraisal Reform
Tuesday, December 1, 2009
2:00 pm (Eastern)

2. Agenda
• Welcome –
– Introduction - Mark Green & Mark Madsen
• NAMB Update
– Latest NAMB Updates – Jim Pair
• RESPA/GFE Reform
– Presentation – Alice Alvey
– Q & A – Vicki Bott
• FHA Appraisal Policy
– Presentation – Tony Gallegos
– Q & A – Vicki Bott
• Proposed FHA Broker/Mini-Eagle Approval
– Presentation - Tony Gallegos
– Q & A - Vicki Bott
• Conclusion

3. Panel Experts
• Vicki Bott – HUD
– Deputy Assistant Secretary of Single Family
Housing
• Roy DeLoach – NAMB
– Chief Executive Officer
• Alice Alvey – Mortgage U
– President and Chief Executive Officer
• Tony Gallegos – Mortgage U
– Director of Advisory Services & Consulting

4. RESPA/GFE
• Principles of RESPA Reform
• Key Dates
• Breaking Down the GFE
• GFE Triggers
• GFE
– Page 1
– Page 2
– Page 3
• GFE Fees
– Charges that cannot increase
– 10% Tolerance
• Right-to-cure tolerance
– Charges that can change
• RESPA/ GFE
– 120 Day Enforcement Restraint

5. Effective Dates
January 1, 2010
• New GFE
• New HUD 1/1A
• Elimination of 1% cap on FHA
origination fees
• 120 Day Enforcement Tolerance
– What it really means

6. GFE Triggers
• Borrowers Name
• Social Security Number
• Property Address
• Monthly Income
• House Value or Best Estimate
• Loan Amount
• …or any other relevant information

7. GFE Notice Requirements
• Provided no later than 3 business days
by hand, mail, fax, email or other
manner lender can document
• Not required if application denied or
withdrawn by borrower
• May be provided by mortgage broker,
but lender is ultimately responsible

8. Block 1: Origination Charge
Must reflect/contain ALL charges by
ALL loan originators in the
transaction
•Origination fee/point •Mortgage Broker
•Processing •Doc Prep
•Commitment •Application
•Wire •MERS Registration
•Underwriting Delivery/Courier
•Administration •Doc Review
•Electronic •Miscellaneous
Block 1 Loan Origination
Fees

9. GFE – Page 2
Block 1: Origination
Charge
$6,000.00
Block 2
$3,500.00 <
$3,500.00
>
YSP
$2,500.00

10. GFE – Page 2
Required
Services

11. GFE – Page 2
Title Services Charges
Old GFE vs New
•Settlement Fee
•Title Examination
GFE•Abstract/Title Search
•Doc Prep
•Attorney Fee •Commitment Binder
•Notary •Wire Fee
•Lender Title Insurance •Endorsements
•Courier/delivery •Copying
•Electronic •Miscellaneous
Title Services & Lenders Title
Insurance

12. GFE – Page 2
Average Charge
(If allowed by
State)
Zero Tolerance

13. GFE – Page 3
Understanding Which Charges
Can Change at Settlement
Using the Tradeoff Table
Using the Shopping Court
Is Your Loan Sold in the Future

14. Which Charges Can Increase?

15. RESPA/GFE Q&A
• How are lender credits reflected on the GFE
and HUD 1?
• Is it required to disclose the “Transfer Tax”?
• Is it required to reflect the “Owner Title
Policy”?
• If a borrower applies for a first and second
mortgage before January 1, 2010 and the
loan originator issues a GFE using the new
form for the first mortgage, does the loan
originator have to issue the second mortgage
GFE on the new GFE form also?
• What fees can a loan originator charge before
issuing a GFE?

16. © 1990-2009 Credit Technologies, Inc. – All rights reserved.

17. Creating a Competitive Advantage
© 1990-2009 Credit Technologies, Inc. – All rights reserved.

18. Creating a Competitive Advantage
© 1990-2009 Credit Technologies, Inc. – All rights reserved.

19. Creating a Competitive Advantage
© 1990-2009 Credit Technologies, Inc. – All rights reserved.

20. Creating a Competitive Advantage
Thomas Conwell
© 1990-2009 Credit Technologies, Inc. – All rights reserved.

21. Creating a Competitive Advantage
Thomas Conwell
President & Founder Credit Technologies, Inc.
© 1990-2009 Credit Technologies, Inc. – All rights reserved.

22. Creating a Competitive Advantage
Thomas Conwell
President & Founder Credit Technologies, Inc.
Director / V. President National Credit Reporting Association
(NCRA)
© 1990-2009 Credit Technologies, Inc. – All rights reserved.

23. FHA Appraisal Policy
• ML 2009 – 28 Re-affirms Appraiser Independence
– Effective January 1, 2010
– Provides guidelines on ordering appraisals for FHA-
insured mortgages and reaffirms existing policy on FHA
requirements regarding appraiser independence and
geographic competence
– Mortgage brokers and commission based lender staff
are prohibited from ordering appraisals
– FHA does not require the use of Appraisal Management
Companies or other third party providers
• However, does require lenders take responsibility to assure
appraiser independence
– While FHA's existing policies regarding appraiser
independence are consistent with the Home Valuation
Code of Conduct (HVCC)
• FHA will adopt language from the Code to ensure full
alignment of FHA and GSE standards

24. FHA Appraisal Policy
– Does ML 2009 – 28 put brokers at a
competitive disadvantage with direct
lender retailers?
– Are large retail lenders being held to the
same standard?
– What do you feel is the difference

25. Proposed FHA Broker/Mini-Eagle Approval
• Proposed rule provision
– Federal Register: November 30, 2009 (Volume 74,
Number 228)
– Subject to 30 day notice & comment period
– Opportunity for industry to provide documented
feedback
– Interested persons may submit
– Post comments electronically through the Federal
eRulemaking Portal at http://www.regulations.gov.
• Propose Lenders directly approve loan
correspondents as approved participants in FHA
programs
• Mortgagees required to ensure loan
correspondents meet applicable requirements

26. Proposed FHA Broker/Mini-Eagle Approval
• FHA-approved mortgagee will:
– Act as Sponsor as in the past
– Case number must be ordered by lender
– Sponsoring mortgagee must agree to
• Assume responsibility for any loan correspondent that works with the mortgagee in
the FHA insured loan
• Assume liability for the FHA- insured loan underwritten and closed in the name of the
FHA-approved mortgagee.
– FHA proposes to increase net worth requirement for FHA-approved
mortgagees for the purpose of ensuring that approved mortgagees are
sufficiently capitalized
• $250,000 to $1,000,000 net worth within 1st year
• And $2,500.000 net worth with 3 years
• Lender requirements to originate, underwrite or
service FHA loans tightened:
– Must demonstrate FHA loans originated in channels meet
established agency quality standards

27. Proposed FHA Broker/Mini-Eagle Approval
Q&A

28. • Conclusion
–Roy DeLoach
• Closing Remarks