Archive

PROPOSED REVISIONS TO HIGHER-PRICED MORTGAGE LOAN APPRAISAL RULES

Recently the Board of Governors of the Federal Reserve System; Bureau of Consumer Financial Protection; Federal Deposit Insurance Corporation; Federal Housing Finance Agency; National Credit Union Administration; and Office of the Comptroller of the Currency (collectively, the Agencies). proposed additional changes to the Higher-Priced Mortgage Loan appraisal rules that were published January 18, 2013. The comment period for the proposal ends on September  9, 2013. The January Rule requires creditors to obtain an appraisal or […]

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ACTUAL/360 INTEREST ACCRUAL

A recent conversation with a compliance officer took me back to the earliest days of my career. The bank is in the middle of a conversion to a new core accounting system. One of the company reps suggested the bank adopt the 365/360 method of accruing interest. Apparently management was excited about the increased yields on the loan portfolio and wanted to move immediately on the suggestion. The compliance officer wanted to know if there […]

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NETTING AN ESCROW BALANCE AGAINST THE PAYOFF AMOUNT

Can a servicer offset the balance in an escrow account against the payoff balance quoted to the borrower? The answer depends on whether the transaction occurs today or after January 10, 2014. Today – If the transaction occurs today, Section 1024.17 (i)(4)(iii) states, “If a borrower pays off a mortgage loan during the escrow account computation year, the servicer shall submit a short year statement to the borrower within 60 days after receiving the pay-off funds. […]

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REVISED REGULATION Z EXAMINATION PROCEDURES

Recently the federal financial institution regulatory agencies released updated Regulation Z Examination procedures. The revised interagency examination procedures  reflect amendments implementing revisions to the Truth in Lending Act under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) that:  (1) restrict mandatory arbitration agreements in mortgage loans; and (2) revise existing escrow requirements on first-lien higher-priced mortgage loans.  These amendments are effective with respect to transactions for which the creditor receives an application […]

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CFPB PROPOSES CHANGES TO REGULATIONS B, X, AND Z

On June 24, 2013 the Consumer Financial Protection Bureau published proposed changes to several final rules originally published in January 2013. The proposal would: Provide procedures for obtaining follow-up information on loss-mitigation applications; Make it easier for servicers to offer short-term forbearance plans; Revise the definitions of “rural” and “underserved” and provide interim rules until the revised definitions are complete; Provide clarification about financing credit insurance; Clarify the definition of “loan originator;” Clarify the definition […]

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