Hi Friends!
This is your Hard Money Lender in Tucson and the Southern Arizona area, Billy A sharing some Breaking News about Fannie and Freddie raising their fees. Here’s what we know so far:
Breaking News: Fannie Mae and Freddie Mac will raise their guarantee fees charged to lenders by an average 10 basis points in order to encourage more private capital to fund the market, according to the Federal Housing Finance Agency. “These changes will move Fannie Mae and Freddie Mac pricing closer to the level one might expect to see if credit risk was borne solely by private capital,” said FHFA Acting Director Edward DeMarco. For loans sold to the government-sponsored enterprises for cash, the higher fees go into effect Nov. 1. For others exchanged for mortgage bonds, the effective date is Dec. 1. The FHFA said the new raises will narrow the gap between what Fannie and Freddie charge lenders who deliver large volumes of loans with those who originate fewer. The fees will also increase on loans with maturities longer than 15 years more than those home loans with shorter terms. This, the FHFA said, will reduce cross-subsidies between higher-risk and lower-risk loans. Lenders paid an average 28 basis points in 2011 for Fannie and Freddie to guarantee their loans in the bonds issued to investors, up from 26 bps the year before, according to a report released by the FHFA. The GSEs raised their fees by 10 basis points in April in order to pay for a tax cut passed by Congress in December. But before the enactment, the FHFA pledged to raise the fees through 2012 in order to allow private issuers room to compete. Source: HousingWire
The Consumer Financial Protection Bureau issued Bulletin 2012-05 on April 19 indicating that the SAFE act permits transitional licensing of loan originators moving from one state to another. Eligible originators need to either meet net worth or surety bond requirements and pay into a state fund as required by the second state’s originator supervisory authority. But unlicensed originators registered in the federal registry with a financial institution won’t be afforded transitional licenses. Regulation H reportedly prohibits origination activities without a valid state-issued loan originator license. So bank originators would need to obtain a license prior to originating for a non-bank lender. Unique identifiers are also required through the NMLS — though originators won’t need to meet that requirement while employed with a bank and holding a unique NMLSR identifier. “The bureau recognizes that this can create impediments to job changes and is committed to working with the states, industry, and the NMLSR to minimize these impediments going forward, consistent with the statutory language of the SAFE Act,” the bulletin stated. Source: Mortgage Daily
The Consumer Financial Protection Bureau wants to create a “level playing field” when it comes to the screening and training of bank and nonbank loan officers. Some brokers were hoping this would subject bank LOs to the same tests that their state-licensed LOs are required to pass. But the bureau’s LO compensation proposal does not level the playing field when it comes to testing. Currently nonbank LOs must complete 20 hours of instruction and pass state and national tests to become a state-licensed loan officer. Bank LOs are exempt from the education and testing requirements mandated by the Secure and Fair Enforcement for Mortgage Licensing Act that Congress passed in 2008. The CFPB is proposing to subject all loan originators to the same education and training standards. But the bureau sees no reason to subject bank LOs to testing. “The bureau is not proposing to apply to employees of depository institutions and bona fide nonprofit organizations the more detailed requirements to pass a standardized test,” according to the proposed rule that has been issued for public comment. The comment period on the proposed rule ends Oct. 16. Source: National Mortgage News
A government publication provides some guidance about when to file a Suspicious Activity Report. In the fiscal-year ended Sept. 30, 2011, U.S. financial institutions filed 93,508 SARs related to residential loan fraud, according to data from the Federal Bureau of Investigation. Filings jumped from 70,533 in fiscal-year 2010. SARs filed by federally insured financial institutions that suspect mortgage fraud involve lenders that are deceived into approving a loan, foreclosure rescue schemes and loan modification schemes — among other crimes. An advisory was issued Thursday by the Financial Crimes Enforcement Network to help financial institutions better assist law enforcement when filing SARs. The advisory discussed several types of fraud involving lender deceit including occupancy fraud, income fraud, appraisal fraud and employment fraud. Identity theft, debt-elimination schemes and fraud involving reverse mortgages were also listed. SARs filings should include in the narrative section the Conference of State Bank Supervisors’ National Mortgage Licensing System and Registry unique identifier as required by Section 1503 of the Secure and Fair Enforcement for Mortgage Licensing Act of 2008. Branch, company and control person identifiers should also be included. FinCEN outlined a number of red flags that could indicate the need to for further due diligence and a decision whether to file a SAR.
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The U.S. House of Representatives passed HR 2446, The RESPA Home Warranty Clarification Act, which would officially remove home warranties from the settlement services restricted under the Real Estate Settlement Procedures Act (RESPA). If the legislation is signed into law, real estate professionals could market home warranties more easily to consumers once again. The bill’s supporters say it restores Congress’ original intentions when it passed RESPA in 1974 to provide consumers with cost disclosures for real estate settlement services. Because home warranties are not required for home settlement, they were not considered to be covered under the legislation. In 1992, the U.S. Department of Housing and Urban Development (HUD) contradicted decades of this definition of home warranties. HUD was again silent on the subject until it issued an informal letter that called the practice into question in 2008, and then compounded the problem with an interpretive rule issued in 2010. The confusion spawned legal battles and has severely limited real estate professionals’ involvement in the home warranty business. Throughout, the National Association of Realtors® has advocated for a clearer treatment of home warranties under the law and is working to get the legislation taken up in the Senate. The bill, introduced last year by Reps. Judy Biggert (R-Ill.) and William “Lacy” Clay (D-Mo.) has bipartisan support and 40 co-sponsors. “This legislation will help small businesses. It will help real estate professionals. Most importantly, it will help homeowners by clarifying the law on the sale of home warranties,” said Rep. David Scott (D-Ga.) on the House floor. “It’s very simple, but it’s very important so that our real estate industry and residential loan industry can move more smoothly.” In late March, the House Financial Services Committee passed HR 2446 out of committee with an amendment designed to increase transparency. The amendment requires brokers who recommend home warranties to disclose that they may be receiving compensation for the recommendation, and that the home buyer is not required to purchase a home warranty at all, much less one from the recommended company. Source: Realtor® Magazine
Under a Treasury Department plan to force Fannie Mae and Freddie Mac to reduce their residential loan holdings by 15 percent annually, more borrowers might have to resort to short-term and variable interest rate loans as 30-year fixed-rate loans become more difficult to obtain. The plan could especially hurt community banks and credit unions that are less able to package residential loans and sell them as securities to generate more money for lending. However, observers say Fannie Mae and Freddie Mac cannot be phased out until Congress approves a plan to replace them. Source: The Washington Post.
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Wow! We’ll keep a watchful eye and share more developments as they unfold. In the meantime, make it another great day!
Your Hard Money Lender in Tucson and Southern Arizona,
Billy A
P.S. I want to be your favorite Hard Money Lender in Tucson and Southern Arizona, so please don’t keep me a secret! If you, your friends or family need help with funding, I’d be happy to give them free information without any obligation. Please give me a call at:
(520) 299-4878!
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