eMortgage Legal Update, Trended Credit and State-Level Changes

By rchrisman@robchrisman.com

(Since Austin is having a streak of temperatures above 100 degrees, part 2 of 2 of "You know you're in Texas when...")

- You actually burn your hand opening the car door.
- You break into a sweat the instant you step outside at 7:30 a.m.
- Your biggest bicycle wreck fear is, "What if I get knocked out and end up lying on the pavement and cook to death?"
- You realize that asphalt has a liquid state.
- The potatoes cook underground, so all you have to do is pull one out and add butter, salt and pepper.
- Farmers are feeding their chickens crushed ice to keep them from laying boiled eggs.
- The cows are giving evaporated milk.

- Penn sends "It's been so hot the cat refuses to harass the squirrels."

 

Gotta hand it to Vancouver. The city has gained a reputation as a place for foreign buyers - primarily Chinese - to buy housing and park their money...even if they don't intend on living there. Now foreign buyers will face an additional 15% property transfer tax beginning this week. The Wall Street Journal reports that, "The benchmark price for a detached Vancouver home increased 39% to nearly $1.2 million in June from a year earlier." What kind of lesson does that teach first-time home buyers?

This market is on fire right now, so National Mortgage Professional Magazine has invited United Wholesale Mortgage's CEO, Mat Ishbia, to talk about ways to "Strike While the Market's Hot" on a NMP webinar on Thu, Aug 4, 2016 2-3PM EDT. In this webinar you'll get a leg up on your competition by leveraging the right products for your clients. Mat will share tips on how to fully maximize this low rate environment. He's going to show you the products and tactics to increase your market share to catapult your business for the second half of 2016. Reserve your complimentary space here.

Genworth Mortgage Insurance is offering two one-hour training opportunities to learn more about Fannie Mae's Self-Employed Borrower Updates to Selling Guide 2016-05. During this course, our trainers will provide clarification on calculating qualifying income from a borrower's K-1 including access to the income/assets and the liquidity of the business. Register forMonday, August 8, 12 pm ET: Fannie Mae's Self-Employed Borrower Updates to Selling Guide 2016-05 or Monday, August 22, 12 pm ET: Fannie Mae's Self-Employed Borrower Updates to Selling Guide 2016-05. Visit Training for Genworth's self-paced eLearning courses, live webinars and classroom training offerings.

 Join BuckleySandler Attorneys for a complimentary webinar on August 10 from 2-3PM EDT. Hear about recent industry developments and recent court cases supporting eMortgages, and to discuss the following topics: Overview of the current eMortgage landscape: eNotarization, eRecording, TRID, CFPB eClosing Pilot, eNote Registry, GSE Acceptance, eMortgage compliance risks for each part of the eMortgage lifecycle (application, closing, transfer and custody) & Case law trends.

 Registration is now open for the 2016 TMBA annual Mortgage Servicing Forum at the Marriott Legacy Town Center in Plano, Texas on November 8th and 9th. Come together hundreds of real estate finance professionals in the servicing industry. Navigating the Changing Tides is your time to maximize your ROI and experience as you network, learn, and engage with colleagues, clients, and potential partners.

 On Wednesday, September 7^th, joinOhio's OMBA for a comprehensive webinar developed to provide essential information on the transition to using Trended Credit Data for mortgage underwriting. Learn exactly what trended data provides, and what impacts and challenges you can expect from adding this data to your process. Bring your questions and all of your staff to this session as it will deliver the information necessary to adopt trended data into your lending operation.

 What do they know that we don't? BlackRock Fund Advisors lowered its stake in PennyMac Mortgage Investment Trust (NYSE:PMT) by 4.0% during the first quarter, according to its most recent disclosure with the SEC. The fund owned 2,561,656 shares of the company's stock after selling 105,861 shares during the period. BlackRock Fund Advisors owned about 3.47% of PennyMac Mortgage Investment Trust worth $34,941,000 as of its most recent SEC filing.

 Lenders and banks everywhere constantly grapple with overlapping state and federal regulations. Let's see what the state regulatory bodies have been up to lately.

 Hawaii has enacted Senate Bill 2298, the 'Uniform Fiduciary Access to Digital Assets Act'. The Act allows a fiduciary acting under a will or power of attorney, a personal representative of a decedent, a conservator, or a Trustee of a trust to compel disclosure of a digital asset from a custodian who stores the digital assets of a user. The Act only applies to a custodian if the user resides in the State of Hawaii or resided in the State of Hawaii at the time of the user's death. The Act does not apply to the digital assets of an employer used by an employee in the ordinary course of business.

 In a ruling last month, the Washington Supreme Court found a servicer changing the locks without warning on a delinquent borrower illegal. It is a decision that clears the way for a federal class-action case. "The mortgage industry is wrestling with the significance of the 6-3 ruling, which found that provisions standard in mortgage documents around the country conflict with state law. The provisions allow for lenders to change locks, winterize homes or take other steps to preserve the value of properties that are in default or abandoned."

 Effective June 30 the Texas Legislature has adopted several technical amendments to various provisions relating to Mortgage Bankers, Residential Mortgage Loan Servicers and Residential Mortgage Loan Originators in order to provide clarification and to improve grammar and readability. 

 TheDisclosure Requirements for Residential Mortgage Loan Servicers outlines the definitions for terms as used in Chapter 79 and has been amended to reorganize the definitions alphabetically and to now include a definition of the "Act" as the "Residential Mortgage Loan Servicer Registration Act." Section 19.2 regarding disclosure requirements is amended to clarify "that the required disclosure is only necessary for the servicing of residential mortgage loans on real estate located in Texas. It further requires the posting of the disclosure on the registrant's website."  The disclosure language appears as follows: "COMPLAINTS REGARDING THE SERVICING OF YOUR MORTGAGE SHOULD BE SENT TO THE DEPARTMENT OF SAVINGS AND MORTGAGE LENDING, 2601 NORTH LAMAR, SUITE 201, AUSTIN, TX 78705. A TOLL-FREE CONSUMER HOTLINE IS AVAILABLE AT 877-276-5550.

A complaint form and instructions may be downloaded and printed from the Department's website located at www.sml.texas.gov or obtained from the department upon request by mail at the address above, by telephone at its toll-free consumer hotline listed above, or by email at smlinfo@sml.texas.gov.

 Pennsylvania amended its statutory provisions that relate to powers of attorney. The effective date of these changes vary from immediately through January 1, 2017. One of the largest changes include the addition of a chapter on powers of appointment. The chapter outlines the exercise of powers of appointment, manner of appointment, anti-lapse provisions, and partially effective exercise. Pennsylvania also added a chapter on charitable instruments which covers deemed provisions of the governing instrument of charitable organizations, the power to amend the governing instrument, court authority and applicability.

 Effective June 30^th North Carolina enacted the Revised Uniform Fiduciary Access to Digital Assess Act. Additionally, it has adopted a new template for its Power of Attorney sample. It is important to note that the Act applies to the specified individuals regardless of whether their power was received or granted before, during or after the effective date of this Act: The Act was enacted in order to modernize the weight given to online tools. Following, the North Carolina legislature has given more weight to online tools than other documents.

 The legislature granted several expansions along with limitations to custodians in order to ease the burden of the position. In addition to the expansion of discretion in granting access to digital assets also comes a limitation to which documents access must be given to if the third party meets all of the requirements. One of the most notable limitations is that a custodian need not disclose a deleted asset. The custodian even has the discretion to disclose partially or deny disclosure of digital assets if the segregation of the assets would impose an undue burden on the custodian. However, this latter ability must be affirmed by a court order. Click here to read this Senate Bill.

 Missouri Senate Bill No. 932 repeals certain sections of statutes related to notary publics and replaces them with new sections. the county clerk must keep a register of each notary they award a commission to and provide the secretary of state, by certified mail, the notaries bond, signature, and oath within 30 days.  A notarized signature or record is satisfied as notarized if the signature or record is accompanied by the electronic signature of the notary along with all other information required. Every notary must keep an official notarial seal that is their exclusive property and the seal may not be used by any other person or surrendered to an employer upon termination of employment. These provisions are effective on August 28.

 The state of Louisiana has recently updated its Trust Code, through House Bill No. 286, which became effective August 1. One of the revisions applies to the situation where a beneficiary dies before the settlor (the person who created the trust). The update expands the category of parties to whom the settlor may shift the principal upon such an event. It allows the settlor to provide that if the beneficiary dies but has descendants, the beneficiary's interest may be passed to one or more of the beneficiary's descendants. There is also an update regarding trust recordation procedures. The revision provides that if a trust contains a transfer of immovable property, the trustee must file the trust instrument for record in the parish in which the property is located. The revision is specific that the trust instrument itself must be filed, rather than the extract of trust. Another update is simply an expanded definition of "person" as it pertains to Louisiana trust law: the definition has been expanded to specifically include limited liability companies as persons.

 As noted in this commentary a week or two ago, JPMorgan Chase will discontinue settlement of Treasury securities next year, leaving Bank of New York Mellon the sole provider of the service for major bond brokers. Both banks have reassured the Treasury Department and the Federal Reserve that the market will not face disruption, but traders worry about the vulnerability of all trades moving through a single venue. I'd be worried too... one cybercrime hack...

 Keeping on with market news, the agency MBS market opened the week (despite poor Construction Spending and ISM Manufacturing numbers) down/lower and mostly "wider" compared to Treasury securities. The 10-year note put in a high yield of 1.51% mid-morning. By the end of the day the 10-year note closed .375 of a point lower with a yield of 1.50%; both the 5-year T-note and agency MBS prices were worse about .125.

 Today we've already had an Australian rate cut, but here we'll have June Personal Income and Spending/Consumption at 5:30AM PT - both expected to be up slightly - and some auto sales figures later in the day.