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.
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.
SAMP Dinner Meeting September 15, 2021
Current Issues in Mortgage Lending
RESPA Affiliated Business Arrangements, Bitcoin and Blockchain, Climate Change, Pricing Exceptions
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 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.
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 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
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.
SAMP Dinner Meeting September 15, 2021
Current Issues in Mortgage Lending
RESPA Affiliated Business Arrangements, Bitcoin and Blockchain, Climate Change, Pricing Exceptions
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 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.
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 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 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
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.
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.
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.
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.
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 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.
This document provides an overview and summary of a training on Chenoa Fund programs offered by CBC Mortgage Agency. The training covers conventional and FHA loan programs, how to calculate AMI, the loan registration process, underwriting, locking loans, securing down payment assistance approvals, and purchasing and servicing loans. It also includes a comparison matrix of FHA second mortgage products, including the Rate Advantage, DPA Edge Repayable Second, and DPA Edge Soft Second programs.
This document provides an overview and summary of Chenoa Fund programs, including:
1. Chenoa Fund offers down payment assistance programs in all states except New York, including Rate Advantage (FHA), DPA Edge: Repayable Second (FHA), and DPA Edge: Soft Second (FHA).
2. The programs provide 3.5% assistance for down payments and closing costs, with various terms for repayment. The first mortgage must be sold to CBC Mortgage Agency.
3. Eligibility requirements include minimum credit scores and debt-to-income ratios. The document reviews guidelines for each program and requirements for borrowers with credit scores between 620-639.
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 document discusses the benefits of FHA loans including lower down payments of as low as 3%, higher qualifying ratios, leniency on derogatory credit, non-occupying co-borrowers allowed, financing of upfront mortgage insurance, and assumability. It also lists FHA required disclosures and provides resources for homeowners facing foreclosure or scams.
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.
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.
TRID is a new regulation that combines mortgage disclosures to improve compliance and help borrowers understand loan terms. It impacts realtors, lenders, and clients. Key changes include integrating Good Faith Estimates, Truth-in-Lending disclosures and HUD-1 Settlement Statements into new Loan Estimate and Closing Disclosure forms. Lenders must provide these documents within specific timelines, including delivering the Closing Disclosure 3 business days before closing. Realtors must familiarize themselves with the new requirements and ensure timely communication between all parties to avoid delays.
The document discusses changes to FHA loan programs and limits for 2008, including:
1) New higher loan limits up to $729,750 due to economic stimulus packages that aim to stimulate the struggling housing market.
2) Reforms to FHA including lower down payment requirements of 3.5%, more flexible underwriting, and a 12-month moratorium on risk-based mortgage insurance premiums.
3) Key differences between FHA and conventional loans through FNMA/FHLMC, with FHA generally being more flexible regarding low down payments, lower credit scores, and other factors.
This document provides an overview and agenda for a CALHFA program training offered through Affinity Lending Group. It discusses CalHFA eligibility guidelines including income limits, sales price limits, and underwriting standards. It also outlines CalHFA's first mortgage and down payment assistance programs, as well as Affinity Lending Group's support services.
This document contains a cash flow statement, net worth statement, ratios analysis, and debt summary for a couple named Brooke and Jacob Taylor. It notes their incomes, expenses, assets, liabilities, and various financial ratios. Their basic liquidity ratio is low at 0.62, suggesting insufficient emergency savings. Their asset-to-debt ratio is high at 9.62, meaning ample assets compared to debts. The document prioritizes paying down their debts from highest to lowest interest rates and discusses options for improving their financial situation like reducing expenses and saving more before making large purchases.
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.
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 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
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.
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.
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.
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.
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 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.
This document provides an overview and summary of a training on Chenoa Fund programs offered by CBC Mortgage Agency. The training covers conventional and FHA loan programs, how to calculate AMI, the loan registration process, underwriting, locking loans, securing down payment assistance approvals, and purchasing and servicing loans. It also includes a comparison matrix of FHA second mortgage products, including the Rate Advantage, DPA Edge Repayable Second, and DPA Edge Soft Second programs.
This document provides an overview and summary of Chenoa Fund programs, including:
1. Chenoa Fund offers down payment assistance programs in all states except New York, including Rate Advantage (FHA), DPA Edge: Repayable Second (FHA), and DPA Edge: Soft Second (FHA).
2. The programs provide 3.5% assistance for down payments and closing costs, with various terms for repayment. The first mortgage must be sold to CBC Mortgage Agency.
3. Eligibility requirements include minimum credit scores and debt-to-income ratios. The document reviews guidelines for each program and requirements for borrowers with credit scores between 620-639.
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 document discusses the benefits of FHA loans including lower down payments of as low as 3%, higher qualifying ratios, leniency on derogatory credit, non-occupying co-borrowers allowed, financing of upfront mortgage insurance, and assumability. It also lists FHA required disclosures and provides resources for homeowners facing foreclosure or scams.
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.
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.
TRID is a new regulation that combines mortgage disclosures to improve compliance and help borrowers understand loan terms. It impacts realtors, lenders, and clients. Key changes include integrating Good Faith Estimates, Truth-in-Lending disclosures and HUD-1 Settlement Statements into new Loan Estimate and Closing Disclosure forms. Lenders must provide these documents within specific timelines, including delivering the Closing Disclosure 3 business days before closing. Realtors must familiarize themselves with the new requirements and ensure timely communication between all parties to avoid delays.
The document discusses changes to FHA loan programs and limits for 2008, including:
1) New higher loan limits up to $729,750 due to economic stimulus packages that aim to stimulate the struggling housing market.
2) Reforms to FHA including lower down payment requirements of 3.5%, more flexible underwriting, and a 12-month moratorium on risk-based mortgage insurance premiums.
3) Key differences between FHA and conventional loans through FNMA/FHLMC, with FHA generally being more flexible regarding low down payments, lower credit scores, and other factors.
This document provides an overview and agenda for a CALHFA program training offered through Affinity Lending Group. It discusses CalHFA eligibility guidelines including income limits, sales price limits, and underwriting standards. It also outlines CalHFA's first mortgage and down payment assistance programs, as well as Affinity Lending Group's support services.
This document contains a cash flow statement, net worth statement, ratios analysis, and debt summary for a couple named Brooke and Jacob Taylor. It notes their incomes, expenses, assets, liabilities, and various financial ratios. Their basic liquidity ratio is low at 0.62, suggesting insufficient emergency savings. Their asset-to-debt ratio is high at 9.62, meaning ample assets compared to debts. The document prioritizes paying down their debts from highest to lowest interest rates and discusses options for improving their financial situation like reducing expenses and saving more before making large purchases.
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.
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.
- 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.
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.
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 provides guidance to entrepreneurs on obtaining capital from banks. It discusses how banks review loan requests and what information they require, including business and personal financial statements. It emphasizes the importance of being an "offensive borrower" by regularly reviewing financials and tax filings, and establishing banking relationships before needing funds. The document compares cash-based and accrual-based accounting and advises entrepreneurs to provide accrual-based financial statements when requesting loans.
(1) The document is a general forbearance request form for the William D. Ford Federal Direct Loan Program that allows borrowers experiencing temporary financial hardship to request suspending or reducing loan payments.
(2) The borrower identifies their hardship as financial difficulties and requests temporarily stopping payments for a period between specified dates not exceeding 12 months.
(3) By signing, the borrower certifies the accuracy of the request, agrees to provide additional documentation, and understands that interest will accrue and potentially be capitalized during the forbearance period.
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.
Understanding Your Credit Report and ScoreSpringboard
Information about what’s on a credit report, how it gets there, how a credit score is calculated, and how to develop good financial habits. Understanding credit and knowing where you stand are vital to protecting yourself from predatory lending by unqualified or unscrupulous lenders offering costly or unstable loan products.
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FIN 355 Milestone Two Case Study
Part A
Health Insurance
John’s company recently changed their health insurance offering. Jenny’s dental office does not
offer any health insurance options. John and Jenny can choose between the following two
health offerings:
Option 1 Option 2
Annual Deductible
• $1,500 if you cover yourself
only
• $3,000 if you cover yourself
plus one or more dependents
• $2,500 if you cover yourself
only
• $5,000 if you cover yourself
plus one or more dependents
Medical Coinsurance
• 10% of all covered in-
network services other than
certain preventive care
• 30% up to MRC of all
covered out-of-network
services other than certain
preventive care
• 10% of all covered in-
network services other than
certain preventive care
• 30% up to MRC of all
covered out-of-network
services other than certain
preventive care
Prescription Coinsurance
• 15% of the cost of the
generic (tier 1) drug up to
the per-prescription
maximum ($25 pharmacy,
$63 home delivery)
• 30% of the cost of the
preferred brand name (tier
2) drug up to the per-
prescription maximum
($100 pharmacy, $250 home
delivery)
• 50% of the cost of the non-
preferred brand name (tier
3) drug up to the per-
prescription maximum ($150
pharmacy, $375 home
delivery)
• 15% of the cost of the
generic (tier 1) drug up to
the per-prescription
maximum ($25 pharmacy,
$63 home delivery)
• 30% of the cost of the
preferred brand name (tier
2) drug up to the per-
prescription maximum
($100 pharmacy, $250 home
delivery)
• 50% of the cost of the non-
preferred brand name (tier
3) drug up to the per-
prescription maximum ($150
pharmacy, $375 home
delivery)
Annual Out-of-Pocket
Maximum
total amount of deductible
plus coinsurance
for covered in- and out-of-
network
medical and prescription
drug expenses
you may pay in a calendar
year
• $3,000 if you cover yourself
only
• $6,000 if you cover yourself
plus one or more dependents
• $4,500 if you cover yourself
only
• $9,000 if you cover yourself
plus one or more dependents
Cost $750/month $280/month
Long-Term Disability Insurance
Both spouses have group disability insurance from their employers.
John: Benefits equal 50% of salary subject to a maximum of $2,500 per month.
Coverage benefits are limited to 5 years. John’s employer pays for this
coverage.
Jenny: Benefits equal to 50% of salary subject to a maximum of $2,000 per month.
Jenny pays a premium for this, and she has a choice to pay with pre-tax
dollars or after-tax dollars. She currently has the premiums paid with pre-tax
dollars.
Additional Client Notes
Clients John and Jenny have a nice-size savings account with around $40,000 and a 401K
through John’s work that has a balance of $265,000. Jenny does not ...
Be aware of your school's CDR status and challenges allowed based on past sanctions or appeals. Locate your school's two most recent CDRs and prepare a spreadsheet capturing loan information. Learn how to access key NSLDS reports showing repayment status, entrance to repayment dates, delinquencies, and defaults. Contact the Department of Education for additional help on verifying CDR data and submitting challenges by applicable deadlines.
The document discusses new and updated SBA loan programs, including refinancing balloon payments for owner-occupied businesses, a new dealer floor plan program, and changes to the Small Loan Advantage Program. Eligibility requirements and loan structures are provided for refinancing balloon payments. Additionally, the new dealer floor plan program provides revolving lines of credit up to $5 million to acquire titleable inventory.
United Processing Center works with affiliates to process loan modifications on behalf of lenders. It handles the loan modification process from pre-qualification through approval. The company does not charge affiliates any fees and provides account managers and online file tracking. Affiliates are responsible for collecting documents from borrowers and submitting complete files to United Processing Center for processing.
In this class we discuss what lenders are looking at when you apply for a home loan.
Did you know that bad credit can result from not knowing how to build good credit? We talk about common myths about your credit report in this informative class as well.
What is required by the lender when you apply for a home loan? It's covered in this class.
Assignment DetailsASSIGNMENT SWEET DRINKS OR MARIJUANA.docxrock73
Assignment Details
ASSIGNMENT: SWEET DRINKS OR MARIJUANA
Apply epidemiological perspective to an issue in regards to political implications and overall
health impact.
Explain the importance of epidemiology for informing scientific, ethical, economic, and
political discussion of health issues.
INSTRUCTIONS
In this scenario you have been hired by the President of the United States of America to
provide health policy recommendations. Currently there is a great debate about if we should
outlaw super sized soft drinks or legalize marijuana. You need to research both options,
decide which one you recommend and create a PowerPoint presentation presenting and
justifying your recommendation.
REQUIREMENTS
The presentation should be visually appealing, geared toward a non-health professional audience
and should include the following sections:
· A cover slide with your name and presentation title (1 slide)
· An overview of both issues from a health perspective including scientifically proven health
pros and cons (3–6 slides)
· Specific health information for each issue as it relates to obesity rates (2 slides, one for each
topic)
· An overview of both issues from an economic perspective (4–6 slides)
· An overview of both issues from an ethical perspective (4–6 slides)
· An overview of both issues from a political perspective (4–6 slides)
· Your recommendation regarding which one to pursue for policy implementation and an
explanation why (2–4 slides)
REFERENCE LIST
Each slide should have a clear title indicating the focus of the slide.
Include speaker notes as needed on each slide.
Reference ID:5a82f203a1652200010216e8
Loan details
Loan amount: $410,792.00 Security value: $450,000.00
Loan term (in months): 360 LVR: 91.29%
Actual rate: 4.78%
Repayment type: Principal and interest Interest-only period (in years): 0
Applicant details
Applicant type: Individual Number of applicants: 2
Applicant 1
Applicant name: Clinton
Marital status: Couple Joint with applicant: 2
Number of dependants: 1 Residential suburb: EAST HILLS
Residential postcode: 2213
PAYG
---------------------------------------------------------------------------------------------------------------------------------------
Income type: Gross Frequency: Annually
Base income: $75,000.00
Rental income calculation
---------------------------------------------------------------------------------------------------------------------------------------
Rental income 1
Rental type: Standard
Amount: $11,700.00 Frequency: Annually
Ownership: 50.00%
Amount of investment loan: $410,792.00 Amount of interest add-back: $10,372.50
Total rental income: $5,850.00
Non-taxable income
---------------------------------------------------------------------------------------------------------------------------------------
Non-taxable income: $0.00
Total net income: $64,221.91
Applicant 2
Applicant name: Stephanie
Marital status: Couple Joint with applicant: 1
Number of depe ...
The document provides guidance on challenging incorrect data in the Cohort Default Rate (CDR) and preparing an Incorrect Data Challenge (IDC). It outlines steps like locating prior CDRs, preparing loan information spreadsheets, accessing key reports from the National Student Loan Data System, verifying data with servicers, identifying important borrower dates, including proper documentation, and submitting the IDC via the correct channel by the deadline.
The document summarizes the Ucan2fs business opportunity, which involves offering credit repair and financial education services through a multi-level marketing structure. Specifically, it provides details on:
- The credit repair and FICO score enhancement services offered to customers.
- The compensation plan for independent business owners (IBOs), including retail commissions, bonuses for recruiting IBOs, and residual income from IBO teams.
- How IBOs can build their organization and qualify for higher bonus tiers by recruiting customers and IBOs.
The document discusses the Ucan2fs business opportunity which offers credit repair and FICO enhancement services through a multi-level marketing model. It provides details on the credit repair service which helps consumers dispute inaccurate credit report information for a fee. Representatives can earn money through retail commissions on credit repair sales, bonuses for recruiting new representatives, and ongoing residual income from their downline representatives' sales.
United Processing Center (UPC) processes loan modifications on behalf of affiliates but does not originate loans. UPC negotiates with lenders to modify loan terms for borrowers. UPC handles loan modification processing from pre-qualification through approval to ensure timely resolutions for borrowers. UPC's affiliate program has no hidden fees and assigns each affiliate an account manager experienced in account management. Affiliates are responsible for collecting borrower information, payments, and documents and keeping borrowers updated throughout the loan modification process. UPC provides efficient processing, online tracking, and customer service to help affiliates grow their business.
United Processing Center (UPC) processes loan modifications on behalf of affiliates but does not originate loans. UPC negotiates with lenders to modify loan terms for borrowers. UPC handles loan modification processing from pre-qualification through approval to ensure timely resolutions for borrowers. UPC's affiliate program has no hidden fees and assigns each affiliate an account manager experienced in account management. Affiliates are responsible for collecting borrower information, payments, and documents and keeping borrowers updated throughout the loan modification process. UPC provides efficient processing, online tracking, and customer service to help affiliates grow their business.
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1. 20 Hour SAFE Comprehensive
Pre-Licensing and Exam Prep
C-1167
WA State Pre-Licensing
C-3430
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
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?
Exam anxieties
3
5. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
5
Section 1 Module 1.1
UST Uniform State Test $110
190 minutes = 3 hrs 17 minutes
115 questions plus 10 sample questions
75% to pass
If you pass you will know your score.
If you fail, they will give you a printout showing your
strong and weak areas.
Prometric.com
6. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
6
Exam Components
23% Federal Law
23% General Mortgage Knowledge
programs, products, terms
25% Loan Origination Activities
application, qualifying, title, escrow, math
16% Ethics
consumer protection, fraud, fair housing
13% Uniform State Content
licensing law, prohibited practices
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.
8. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
8
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.
9. 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
9
10. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 2 Module 2.0
Depository Bank
Checking,
savings
CAN fund its
own loans
LOs are
“registered”
10
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
11. 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….
11
12. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
The Mortgage Machine
What are the different pieces of the mortgage
machine?
Loan originators...
12
13. 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.
13
Loan Originator
Loan Processor
Underwriter
Funder, Quality Control
Title Insurance
Escrow
Appraiser
Insurance
Builders
Realtors
Secondary Market
Loan Servicing
Regulators and Examiners
15. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
15
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?
Page 12: Describe other income
16. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
16
Section 2 Module 2.2
Large group discussion:
Occupancy
Assets
HMDA
Education
DOB
Former employer
Ways of holding title
Acknowledgement, signature
Other Real Estate Owned
17. 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.
17
18. 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.
19. 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.
20. 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
21. 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?
22. 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-T
22
23. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
23
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
= %
24. 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.
24
25. 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
25
26. 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?
26
27. 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.
27
28. 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
28
29. 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
29
30. 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
30
31. 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
31
32. 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?
32
33. 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
33
34. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
34
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?
35. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
35
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.
36. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
36
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.
37. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Physical Rights of Real Estate
37
Center of
the Earth
Surface
rights
Fly-over
rights
Mineral,
water, oil,
and gas
rights
Air
rights
38. 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
38
39. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
39
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.
40. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
40
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
41. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
41
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
42. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
42
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
43. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
43
Section 7 Insurance Module 7.1-7.4
General fire/hazard property insurance
coverage
Flood insurance
Private Mortgage Insurance
Private Mortgage Insurance Act of 1998
44. 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%
44
45. 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
45
46. 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%
46
47. 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%
47
48. 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
48
49. 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)
49
50. 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
50
51. 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
51
52. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
10. Escrow 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
52
53. 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.
53
54. 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
54
55. 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
55
56. 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.
56
57. 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%
57
58. 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.
58
59. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Discount Points
Note Rate: 5.25% = 1% Lender Credit. This can be used
to pay costs on a refi or purchase
Note Rate: 5.0% = Par
Note Rate: 4.75% = 1% Discount points paid by
borrower
_______________________________________________
Example: 100,000 loan amount
Note Rate: 5.25% = 1% Lender Credit of $1,000
Note Rate: 5.0% = 0 No cost to the borrower and no
credit given to the borrower
Note Rate: 4.75% = 1% Discount Points will cost the
borrower $1,000
59
60. 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.
60
61. 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
61
62. 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
62
63. 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
63
64. 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
64
65. 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.
65
66. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
23. Adjustable Rate Mortgages
A 5/1 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%
66
67. 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.
67
68. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Your mortgage company’s product “overlays”
Example: Credit score can be no lower than 580
Conventional Loan Products | Government Loan Products
Example: 30 year fixed rate loan
Conventional Loan Programs | Government Loan
Programs
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 68
69. 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.
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
69
70. 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
70
71. 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 2021
~
Ability to Repay: 5 Years
71
75. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Your mortgage company’s product “overlays”
Example: Credit score can be no lower than 580
Conventional Loan Products | Government Loan Products
Example: 30 year fixed rate loan
Conventional Loan Programs | Government Loan
Programs
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 75
76. 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.
76
77. 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
Acceptable down payment amounts
Hazard/fire insurance requirements
Pre-payment requirements
77
78. 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
78
79. 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
79
80. 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
80
81. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 11 Mod 11.18 USDA loans
What is a USDA loan?
Minimum down payment
81
82. 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
82
83. 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
83
84. 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.
84
85. 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
85
86. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 13 Mod 13.3
CSBS/AAMR 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.
86
87. 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
87
88. 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 2008 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)
88
89. 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
89
90. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
In frothy markets it is easy to enter
into a consensual hallucination
with investors and markets that
we are creating value.
90
91. 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
91
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
92. 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.
92
93. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
93
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
94. 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.
94
95. 20 Hour SAFE Comprehensive
Pre-Licensing and Exam Prep
Jillayne Schlicke
DAY 2
96. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
96
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
97. 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.
97
98. 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
98
99. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 16 SAFE Act
State Exam Authority
Definitions
Licensing or registration
Supervised processors and underwriters
Independent contractors
99
100. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
100
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
101. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
101
Section 15 SAFE Act
State or Federally Chartered Depository
Banks:
LOs are exempt from testing and education.
NOT exempt from “registration.”
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
102. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
102
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
103. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
103
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
104. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
104
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
105. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
105
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
106. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 16 SAFE Act/Uniform State
Content
Take the SAFE Act/Model State Law Quiz
106
107. 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?
107
108. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 17 Ethics
Law
Minimum moral standard
“Have to”
Ethics
When there’s no clear statement in the law telling
us what to do.
“Ought, should.”
108
109. 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 109
110. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
110
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
111. 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
111
Honesty
Respect for persons
Integrity
consistent commitment
to a set of values
Trust…loyalty
Responsibility
Responsive to a set of job
duties
112. 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.
112
113. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
113
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
114. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
114
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
115. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
115
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
116. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
116
ManipulationCoercion
Completely
Controlled
Influences
Completely
Non-Controlled
Influences
Persuasion
Substantially
Not Controlling
Substantially
Controlling
Section 17 Ethics
117. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
117
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
118. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
118
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
119. 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?
119
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
120. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
120
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.”
121. 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?
121
122. 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
122
123. 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
123
124. 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.
124
125. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
125
1968 Civil Rights Act
1968 Fair Housing Act
~
Protected Classes:
Race
Color
Religion (Creed)
Sex
National Origin
Familial Status
Sexual orientation added
in 2012 (lending only)
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
126. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Additional protected classes in WA State
LGBTQ
Honorably discharged military Veteran
The use of a service animal
126
127. 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
127
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
128. 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
128
129. 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?
129
Fair Housing/Fair Lending http://www.hud.gov/offices/fheo/lending/index.cfm
130. 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.
130
131. 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?
131
Fair Housing/Fair Lending http://www.hud.gov/offices/fheo/lending/index.cfm
132. 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.
132
Fair Housing/Fair Lending http://www.hud.gov/offices/fheo/lending/index.cfm
136. 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.
136
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
137. 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
137
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
138. 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.”
138
139. 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
139
140. 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
140
141. 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.
141
142. 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.
142
143. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 21
Bank Secrecy Act of 1970
U.S. Patriot Act of 2001
SARS: Suspicious Activity Reports
AML: Anti Money Laundering
143
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
144. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 22 Practice Quiz
Take the practice quiz:
Ethics, Consumer Protection, Fraud, Fair Housing,
SARS/AML
144
145. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 22
Reflect on everything learned today and yesterday.
…any final questions?
Preview of tomorrow.
145
146. 20 Hour SAFE Comprehensive
Pre-Licensing and Exam Prep
Jillayne Schlicke
DAY 3
147. 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.
147
148. 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
148
149. 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
149
150. 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
150
151. 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
151
152. 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 152
153. 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.
153
154. 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.
154
155. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
155
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
156. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
156
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
157. 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.)
157
158. 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
158
159. 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
159
160. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
160
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
161. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
161
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
162. 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.
162
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
163. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Included
Prepaid interest
Mortgage insurance premiums
Wire transfer fees
Recording fees
Loan origination fee
UW, proc, 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.
163
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
164. 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.
164
165. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
165
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
166. 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.
166
167. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Sample APR question:
What items are included when 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
167
168. 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
168
169. 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
169
170. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Sample MDIA Question:
is this ad deceptive?
Call us! Acme Mortgage for your 30 year loan!
2.45%
2.90% 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”
170
171. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
171
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
172. 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
172
Truth in Lending Act
http://www.fdic.gov/regulations/laws/rules/6500-200.html
173. 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
173
Section 24 TILA Module 24.8
174. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 16 Module 16.5
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.
174
175. 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.
175
176. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
HOEPA Thresholds for 2019
Effective January 1, 2019, for purposes of determining under
§ 1026.32(a)(1)(ii) points-and-fees coverage test under HOEPA to
which a transaction is subject, the total loan amount threshold is
$21,549, and the adjusted points-and-fees dollar trigger under
§ 1026.32(a)(1)(ii)(B) is $1,077.
When the total loan amount for a transaction is $21,549 or more,
and the points-and-fees amount exceeds 5 percent of the total
loan amount, the transaction is a high-cost mortgage.
When the total loan amount for a transaction is less than $21,549,
and the points-and-fees amount exceeds the lesser of the
adjusted points-and-fees dollar trigger of $1,077 or 8 percent of
the total loan amount, the transaction is a high-cost mortgage.
176
177. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
HOEPA Thresholds for 2020
Effective January 1, 2020 for purposes of determining under
§ 1026.32(a)(1)(ii) points-and-fees coverage test under HOEPA to
which a transaction is subject, the total loan amount threshold is
$21,980, and the adjusted points-and-fees dollar trigger under
§ 1026.32(a)(1)(ii)(B) is $1,099.
When the total loan amount for a transaction is $21,980 or more,
and the points-and-fees amount exceeds 5 percent of the total
loan amount, the transaction is a high-cost mortgage.
When the total loan amount for a transaction is less than $21,980
and the points-and-fees amount exceeds the lesser of the
adjusted points-and-fees dollar trigger of $1,099 or 8 percent of
the total loan amount, the transaction is a high-cost mortgage.
177
178. 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.
178
179. 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)
179
180. 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
180
181. 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
181
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
182. 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.
182
184. 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.
184
185. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 25
Federal Reserve Board (FRB) rule
on Loan Originator Compensation
185
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
186. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 25
Federal Reserve Board Rule on
Loan Originator Compensation
186
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
187. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 25
Federal Reserve Board Rule on
Loan Originator Compensation
187
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
188. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 25
Federal Reserve Board Rule on
Loan Originator Compensation
188
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
189. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 25
Federal Reserve Board Rule on
Loan Originator Compensation
189
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
190. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 25 Module 25.5
Test your knowledge:
Complete the LO Comp practice quiz questions.
190
191. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 2 Module 2.0
Depository Bank
Checking,
savings
CAN fund its
own loans
LOs are
“registered”
191
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
192. 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.
192
193. 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.
193
194. 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.
194
195. 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
195
196. 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
196
197. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Section 26: Definition of “An Application”
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.)
…..
197
Real Estate Settlement and Procedures Act
http://www.hud.gov/offices/hsg/ramh/res/respa_hm.cfm
198. 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.
198
199. 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
199
200. 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.
200
201. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
RESPA: Lender Required Use
When the lender requires that the borrower use a
certain settlement service provider, 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.
201
202. 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
202
203. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
RESPA: Escrow Accounts
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.
203
204. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
204
Which entities must comply with the anti-
kickback provisions of RESPA?
Lenders (banks, lenders, brokers)
Real estate agents/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
205. 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.
205
206. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
206
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
Real Estate Settlement and Procedures Act
http://www.hud.gov/offices/hsg/ramh/res/respa_hm.cfm
207. 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.
207
208. 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?
208
209. 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
209
211. 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
211
212. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
212
LE --- (loan estimate)------Ellie
CD ---- (closing disclosure)-------Seedy
“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
213. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
213
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.
214. 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.
215. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
215
For these other purposes, business day means all
calendar days except Sundays and the legal public
holidays
…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 Day.
Section 27
TILA RESPA Integrated Disclosure Rule
Business Day Definition
Real Estate Settlement and Procedures Act (2009 Changes)
http://www.federalreserve.gov/boarddocs/supmanual/cch/respa.pdf
216. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
216
Section 27
TILA RESPA Integrated Disclosure Rule
What is “an application”
Real Estate Settlement and Procedures Act (2009 Changes)
http://www.federalreserve.gov/boarddocs/supmanual/cch/respa.pdf
218. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
How to calculate Total Interest Percentage
(TIP)
761.78 x 360 = 274,240.80
274,240.80 - 162,000 = 112,240.80
112,240.80 div by 162,000 = 69.28%
112,240.80 + 262 = 112,502.80
112,502.80 div by 162,000 = 69.45%
218
219. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
219
Good Faith Requirement and Tolerances
Delivery of the Closing Disclosure
Take the TRID quiz
Section 27
TILA RESPA Integrated Disclosure Rule
Real Estate Settlement and Procedures Act (2009 Changes)
http://www.federalreserve.gov/boarddocs/supmanual/cch/respa.pdf
220. 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
220
221. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
221
Section 28
Equal Credit Opportunity Act
ECOA
1974
ECOA points us toward the evaluation based
on creditworthiness only.
It is a violation to discourage an applicant
from making an application for credit on a
prohibited basis
Equal Credit Opportunity Act
http://www.fdic.gov/regulations/laws/rules/6500-1200.html
222. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
222
Section 28 Equal Credit Opportunity Act
We cannot base our lending decision on:
Race
Color
Religion
National Origin
Sex
Marital Status
Income from Public Assistance
(Age)
Whether an applicant has exercised his or
her rights under this act.
Equal Credit Opportunity Act
http://www.fdic.gov/regulations/laws/rules/6500-1200.html
223. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
ECOA
Race
Color
Religion
National Origin
Sex
Marital Status
Income from Public
Assistance
Age
Whether an applicant
has exercised his or
Her rights under this
Act.
223
Fair Housing
Race
Color
Religion (Creed)
National Origin
Sex
Familial Status
Sexual orientation
added in 2012 as a
protected class in all
50 states to Fair
Lending rules
Disability
229. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
229
Section 28 ECOA
Requests for information
Evaluating applicants for creditworthiness
Cannot ask an applicant if he or she
RECEIVES alimony, child support. The
applicant may volunteer such
information.
You must ask if he or she is obligated to
PAY alimony or child support.
Equal Credit Opportunity Act
http://www.fdic.gov/regulations/laws/rules/6500-1200.html
232. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
232
Section 28 ECOA
Adverse Action Definition:
A refusal to grant credit in substantially
the amount or on substantially the terms
requested in an application…
unless the creditor makes a counteroffer
(to grant credit in a different amount or
on other terms) and the applicant uses or
expressly accepts the credit offered;
Equal Credit Opportunity Act
http://www.fdic.gov/regulations/laws/rules/6500-1200.html
233. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
233
ECOA: Adverse Action Notification
A notification given to an applicant when
adverse action is taken shall be in writing
and shall contain:
• A statement of the action taken;
• The name and address of the creditor;
• A list of the prohibited bases’
• The name and address of The CFPB; and
• A statement of specific reasons for the
action taken.
Equal Credit Opportunity Act
http://www.fdic.gov/regulations/laws/rules/6500-1200.html
234. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
234
Borrower’s Right to Receive a Copy of the Appraisal
(1) Creditors are required to notify applicants within three
business days of receiving an application of their right to
receive a copy of appraisals developed.
(2) Creditors are required to provide applicants a copy of each
appraisal and other written valuation promptly upon its
completion or three business days before consummation or
account opening.
(3) Creditors are prohibited from charging for the copy of
appraisals and other written valuations, but are permitted to
charge applicants reasonable fees for the costs of appraisals or
other written valuations unless applicable law provides
otherwise.
236. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
236
Passed to ensure consumers have access to
credit information used by lenders and
others so that remedial steps could be
taken when incorrect or outdated
information remained in their file.
Purpose of a credit report:
Insurance, licensing, instruction from
consumer, extension of credit,
employment, response to a court order,
potential investor risk, other legitimate
business needs.
Credit reports are deemed privileged info.
Section 29 Fair Credit Reporting Act FCRA
Fair Credit Reporting Act
http://www.fdic.gov/regulations/laws/rules/6500-200.html
237. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
237
A CRA has 30 days to respond to a disputed item
Adverse Action: Name, address and phone
number of the CRA, reason, info on how to
obtain a free copy of their report, and the name
of the credit reporting agency.
FACTA
FACTA Red Flag Rules
Take the FCRA Quiz
Section 29 Fair Credit Reporting Act FCRA
Fair Credit Reporting Act
http://www.fdic.gov/regulations/laws/rules/6500-200.html
238. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
238
E-Sign Act
Gramm Leach Bliley (Privacy Act)
FTC Safeguard Rules
Do-No-Call Act
Truth in Advertising and Marketing
Unfair, Deceptive Acts and Practices
Additional Federal Laws Quiz
Section 30 Additional Federal Laws
239. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
Regarding E-Consent Disclosure form:
The disclosure must provide a way for the consumer to
easily withdraw their consent to receive documents
electronically.
239
240. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
240
Section 31 Final Exam, Recap and Close
Review all remaining unanswered questions.
FINAL EXAM
Students complete end-of-course evaluation form.
Instructor provides end-of-course completion
certificates.
241. Jillayne Schlicke
CE Forward, Inc. DBA NAMF
241
Jillayne Schlicke
CE Forward, Inc.
National Assoc of Mortgage Fiduciaries
206-931-2241
jillayne@ceforward.com