State Lending Law Changes From Coast to Coast

By rchrisman@robchrisman.com

Cartoon Laws of Physics (Part 4 of 4; with some addendums tomorrow)

Cartoon Law VIII

Any violent rearrangement of feline matter is impermanent. Cartoon cats possess even more deaths than the traditional nine lives might comfortably afford. They can be decimated, spliced, splayed, accordion-pleated, spindled, or disassembled, but they cannot be destroyed. After a few moments of blinking self-pity, they re-inflate, elongate, snap back, or solidify. Corollary: A cat will assume the shape of its container.

Cartoon Law IX

Everything falls faster than an anvil.

Cartoon Law X

Any body passing through solid matter will leave a perforation conforming to its perimeter. Also, called the silhouette of passage, this phenomenon is the specialty of victims of directed-pressure explosions and of reckless cowards who are so eager to escape that they exit directly through the wall of a house, leaving a cookie-cutout-perfect hole. The threat of skunks or matrimony often catalyzes this reaction.

The National Association of Realtors reports single women have been buying single family residential homes at 2x the rate of single men over the past year. Excellent.

Are there any updates to tax information and/or documentation requirements? Yes, a handful.

 In terms of vendor services, "With increasing levels of identity theft and fraud, the IRS is constantly changing their setup requirements to remain compliant. 4506-Transcripts.com stays up to date with these changes so you don't have to. This enables us to deliver transcripts to our customers fast and without delay in service. We also offer VOEs for originating loans and quality control prior to selling. Call 4506-Transcripts.com at 925-927-3333 or visit our website at www.4506-Transcripts.com today to discover how you can utilize our expertise in these areas."

 Stearns requires that all loans where tax returns are being used in the calculation of income with an approval date later than 10/17/16 will require 2015 personal and business tax returns.
If tax transcripts are not yet available (no record found), borrower may provide stamped returns by the IRS, along with proof of taxes paid or refund received.

 Beginning with new CD requests on or after Monday, October 24th, Flagstar will offer originators the ability to request a CD once an Approved with Conditions status has been received provided certain requirements are met. A recorded training will be available soon.

 

The following Fifth Third Mortgage Company Organization Identification Numbers are required when transferring servicing and beneficial rights for a loan to FTMC through MERS:  1000538 (Fifth Third Mortgage Company) must be listed as servicer. 1000538 (Fifth Third Mortgage Company) must be listed as the investor and 1000142 (Fifth Third Bank) must be listed as the Sub-Servicer.

 Fifth Third published recent lending news which included if an AUS is rerun or any changes are made exceeding AUS resubmission tolerances, the updated AUS must be delivered to Fifth Third prior to purchase.  In addition, when AUS requires that an individual's SSN must be verified a signed SSA89 and 3rd party verification of the SSN must be in the file.

 First Community Mortgage has posted guideline updates effective November 1^st. Changes have been made to its Non-Warrantable Condos Program, Self-Employed Bank Statement Program, as well as information on Foreign Nationals, recent housing events and real estate investor loans. Click here to view the bulletin.

 NewLeaf Wholesale issued the following reminder: When adding appraisal fees to the Loan Estimate (LE) on and after November 1, 2016, please refer to the new VA Fee Sheet located on the U.S Department of Veterans Affairs website.

 Every lender has Federal laws and regulations to sort through. Layer on a series of state-level changes and it can create quite a morass. Let's see what some random states have been up to lately in terms of residential lending changes.

 Massachusetts has adopted provisions under its Truth in Lending Act. The first amendment made relates to the periodic statements which financial institutions are required to send to consumers regarding open-end credit. The changes include how late payments are treated by the financial institution and creditors. Another amendment provides that if a regulation of the federal TILA, the CFB's Regulation Z, the Official Staff Commentary, or a disclosure or model form provided by a creditor thereunder conflicts with a state provision, the Commissioner may waive, in writing, the conflicting Massachusetts provision, provided the federal provision is not substantially less consumer protective. The final amendments to the TILA add provisions for LEs and CDs. These provide that compliance with the federal requirements for the contents of these disclosures will also constitute compliance under the Massachusetts Truth in Lending Act.

 California has passed SB 777 which amends its Financial Code to add section 22050.5. Existing law exempts from regulation a person who makes five or fewer commercial loans in a 12-month period so long as those loans are incidental to the business of that person.

 California adopted AB 691 which amends the California Probate Code to authorize a decedent's personal representative or trustee to access and manage digital assets and electronic communications.The Act does not apply to a digital asset of an employer used by an employee in his or her ordinary course of business. The Act allows a user to use an online tool, will, trust, power of attorney or other record to direct a custodian of digital assets to disclose some or all the user's digital assets to a designated recipient.

 California passed SB 657 which updates the California Residential Mortgage Lenders Act to include in the definition of "Lender." The revision also now authorizes the Commissioner, at his or her discretion, to require a lender to continuously maintain a net worth greater than $250,000 but not to exceed the net worth required of an approved FHA lender in addition to maintaining the existing requirement that a licensee shall continuously maintain a minimum tangible net worth of $250,000, The provisions of SB 657 are effective January 1, 2017.

 California has also passed SB 1150 which amends the California Civil Code to provide foreclosure protection to a person claiming to be the successor in interest of a deceased borrower. SB 1150 prohibits a loan servicer from recording a notice of default in the event a person, not a party to the loan or promissory note, notifies the loan servicer that the borrower has died and claims to be a successor in interest to the borrower. SB 1150 requires that, within 10 days of a person being deemed a successor in interest the servicer shall provide, at a minimum and in writing, to the successor in interest: the loan balance, interest rate and interest reset dates and amounts, balloon payments, prepayment penalties, default or delinquency status, the monthly payment amount and the payoff amount.

 The Oregon Department of Consumer and Business Services implemented provisions concerning commercial construction lending exemption under its licensing of mortgage loan originator regulation. The Oregon law exempts lenders from the SAFE Act who make commercial construction loans from the licensing requirement under certain circumstances with proper endorsements. To qualify for the exemption, a lender would have to verify that the borrower is a licensed general contractor, that the loan is for a business purpose that will be used to construct a residential structure, and adhere to certain other provisions. 

 The Tennessee Department of Financial Institutions has announced the annual supervision fees for non-depository financial institutions for fiscal year 2016-2017, which became effective on October 14, 2016. The annual supervision fee for non-depository financial institutions in fiscal year 2016-2017, is $1,025.00 for mortgage licensees and flexible credit licensees, and $625.00 for all other licensees and registrants, except mortgage loan originators, who will continue to pay a licensing and renewal fee of $100.00 and a sponsorship fee of $100.00. The supervision fee includes the annual licensing or registration fee and the costs of a routine examination or investigation (actual expenses are still paid for out-of-state examinations and inspections).

 New York recently enacted provisions concerning the administration of digital assets. The article applies to fiduciaries acting under a will, trust or power of attorney; executors, administrators and personal representatives of decedents; guardians; trustees acting under a trust; and custodians (if the user resides in the state of New York). These parties must have been granted their powers on or after the article's effective date. This article provides user direction for disclosure of digital assets in specific situations. Part 3 of the article outlines the disclosure of content of electronic communications of a deceased user. This portion of the articles explains procedures for principals, trustees, and guardians of wards who wish to access these communications. Part 4 of the article describes the legal duties of fiduciaries. These duties mirror those imposed on a fiduciary who manages tangible property such as the duty of care, the duty of loyalty and the duty of confidentiality. Custodians must honor a request for disclosure of digital assets or terminate a user's account within 60 days of receipt.

 Pennsylvania amended certain provisions regarding powers of attorney. These changes take effect immediately. Some of the highlights to the amendment include the following. The amendment incorporates a section related to governing documents of certain entities. A power contained in the governing document for a corporation, partnership or limited liability company or other legal entity by which a director, partner or member authorizes others to do other things on behalf of the entity or a proxy or other delegation to exercise voting rights or management rights with respect to a legal entity. The amendment also briefly addresses the following topics: a spouse's power to claim an elective share, the durable power of attorney, and short form certificates for notarial acts.

 The Montana Department of Administration amended its provisions by reducing its licensing renewal fees for 2017 by 50%. This temporary rule is set to expire on March 1, 2017. In addition, the Department also adopted a new rule pertaining to the clarification of the definition of "regularly engage." The provision regarding this new rule is effective on October 15, 2016.

 After moving higher last month rates have been relatively stable since. Yesterday the U.S. Treasury market saw some backtracking after enjoying a week of slim daily gains and some steepening of the yield curve (the 2-year to 10-year stands at 100 basis points, or 1%). Agency MBS prices closed modestly changed and the 10-year T-note traded in a very small 5 basis point range and closed at 1.81%.

 But that was then, and this is now, and we've had the usual "first Friday of every month" spate of employment data, this time for October. Nonfarm Payrolls, expected at +175k, came in at +161k but with a back-month revision higher. Average Hourly Earnings, expected +.3%, were +4%. And the headline Unemployment Rate, expected at 4.9%, came in there. (We also had the September Trade Balance, which rarely moves bond markets, at $36.4 billion.) The various Federal Reserve Presidents are back on the speaking circuit, so their statements may garner some attention but the odds are certainly favoring a short-term rate increase in December. Anyway, after the employment data rates are with the 10-year at 1.82% and agency MBS prices roughly unchanged.