Free H.A.R.P 2.0 Class – All Hype? Or a Big Help?

So, I asked a bunch of Loan Officers to post their HARP questions on and there were so many, that I ended up doing a free class with a HARP expert–who has first-hand street creds because he also originates these types of loans.  Here’s a few of the things that you’ll learn”

  • Overview of HARP
  • The differences between “current” and “new” servicers
  • Fannie and Freddie differences
  • Qualifying Quirks
  • Private Mortgage Insurance
  • Manual vs. Automated Underwriting
  • Non-owner occupied rules
  • Subordinated Financing rules
  • Solicitation Rules

Did I mention that it’s free?

Karen Deis

Still Getting It Wrong–Reg Z Advertising Rules

I’m still watching TV commercials, listening to radio ads, and getting direct mail–where mortgage companies are NOT following the Reg Z Rules.

We need to level the Playing Field and if you notice a company not following these rules, then you need to call them–or report them–because we all need to play by the same rules.   Don’t lose deals because your competitor doesn’t disclosure everything they need to. 

The Truth-In-Lending Rules apply if you quote down payments, payments, interest rates or points.  But wait, there’s more!  These rules apply to all forms of advertising, including email blasts, flyers that you pass out at apartment buildings, TV & radio, and direct mail!  They apply to all dwelling-secured loans: single-family, condos, town homes, mobile homes, etc.

Existing Advertising Disclosure Rules

If your ad contains any financing info…

  • Dollar amount or % of down payment
  • Number of payments or number of years to repay the loan
  • Dollar amount of any payment
  • An interest rate or a finance charge

…then you must disclose the following:

  • The terms of repayment over the entire life of the loan, including ARMs, Balloon payments or temporary buy downs
  • Dollar amount or % of down payment
  • The Annual Percentage Rate

 Updated Rate & Payment Rules In Addition to Existing Rules

Effective 10-1-09, more disclosure must be included in addition to the existing rules above:

  • If fixed interest rate over the life of the loan, the rate and APR must be printed in the same size letters
  • If advertising a payment, you must include
    • Fact that the payment does not include taxes, mortgage or homeowners insurance
  • If rate or payment is NOT fixed,  (Buydown, ARM or Balloon)
    • Each rate or payment & time period changes for entire term of the loan
    • If ARM, future rate must be disclosed by adding index plus margin

Size of Lettering & Placement of Disclosure – Printed Ads

  • APR Rate and loan term details must be printed in the same size letters (or larger) than the rate or payment being advertised
  • Must be printed in “close proximity to info being advertised (not buried way down at the bottom or the ad)
  • Cannot be obscured in any way (i.e., shading, coloration, etc)

 TV, Radio, Video & All Oral Disclosures

Must include all the information above PLUS:

  • Must be clearly stated (no talking fast or low tone of voice); or
  • Must provide a toll free number that may be used to call for additional info

 For information only – it’s not comprehensive or intended as legal advice. Final Rule published in Federal Register Vol. 73, No. 147 and 12 CFR, Part 226

Fair Access to Credit Score Disclosures—Coming to a Loan File Near You!

Most mortgage companies don’t realize this yet, but the Fair Access to Credit Score Disclosures are coming to a loan file near you!
We know the Dodd-Frank Wall Street Reform Act is massive—and covers all types of financial entities.

Tucked away in the bill is a section called “Fair Access to Credit Scores” which contains new rules for Adverse Action and Risk Based Pricing notifications.

Be prepared to add another disclosure to your already huge stack of disclosures. The actual form has not yet been created, but stay tuned.

The Risk Based Pricing is took effect January 11, 2011. The new credit score disclosure rules are supposed to become effective July 21, 2011. Here’s how the credit score disclosure and risk based pricing come together to trigger the disclosure.

Under the risk based pricing rule lenders are required to send a notice to any client who is receiving a loan with less than the best rates possible. So, if the best rate out there is for 25% down and a 740 credit score and your clients have neither, you’ll have to send them a credit score disclosure.

When they receive the notice and you may (meaning will) be asked to explain to them why they are paying from .25 pt. to 3.25 pts. extra on their loan.

This time around, the credit reporting agencies must also add certain disclosures when a consumer requests their credit score. Get a copy from your credit supplies of their disclosure because you know your clients will be asking you—not the credit bureaus—what it really means.

Credit scores are going to become more and more available to consumers So my advice is to GET YOUR CLIENTS TO REVIEW THEIR CREDIT BEFORE APPLING FOR A LOAN and start working on your script on how you’re going to explain why they have gotten the disclosure and why have to pay extra fees.
Provided by where we interpret the mortgage rules and regulations in plain language.

What Do NMLS & HUD Case Numbers Have In Common?

So effective April 1st, FHA is requiring that all lenders must enter the “NMLS Identifier” number when ordering a case number.

ML 2011-04, HUD has NOT made the distinction between brokers and bankers—the wording says “NMLS ID number”.

So here’s the rest of the story–On Oct 1, 2010, FIDC, OTS, OCC, Federal Reserve, Farm Credit and NCUA in a FINAL rule, stated that if a Loan Officer works for a bank, they must be REGISTERED using the NMLS system. It’s not required until the middle of this year, but the way I’m reading it, both licensed and registered LO’s must provide their ID number.

But, here’s the warning – guard your NMLS ID number like you would guard your social security number. If you are part of a loan origination team, don’t allow your number to be used unless YOU personally took the loan application. Don’t let anyone else use your ID number. There are still some of those “bad apples” around and they could be using your ID number for their “high risk” loans and while using their own ID’s for the “clean” applications.

If a processor is licensed (and many of them are) warn them not to give their ID’s to loan officers. There is no reason and LO should use a processors ID number!

More info can be found at or

HVCC Morphs Into Appraiser Independence

HVCC Morphs into Appraiser Independence

Karen Deis. Publisher, www.Mortgage

The new Appraiser Independence rule and the sunset of HVCC doesn’t change a thing. There are some publications out there stating that the Interim Rule doesn’t prohibit production staff from ordering, paying for, or participating in the appraisal process directly with appraisers – but we’re here to tell you differently. The link to the Federal Reserve gives you access to the actual Federal Register – it states that Lenders are required to ensure Appraiser Independence from production staff – essentially continuing the HVCC rules regarding ordering, payment, & process. Mortgage Brokers, LO’s, & other production staff are prohibited from selecting, influencing, paying, or having substantive communications with appraisers.

Portability – Reps & Warrants are still required for use of another Lender’s appraisal. Since this is now Federal Law and all Lenders will now be adhering to the Appraiser Independence Requirements, the portability should become easier. What was the problem before? Not all Lenders were selling to Fannie and Freddie and therefore did not need to comply with HVCC – since no one could ever guarantee the compliance across the board, the portability of appraisals was just not happening. If you noticed, there was never an issue with appraisal portability for Government Loans – that’s because ALL Lenders played by the same rules with clear guidance from HUD.

Fannie (SEL 2010-14) and Freddie (2010-23) issued their own interpretations—which are basically the same, HOWEVER, Freddie goes into much more detail—with added instructions on how appraisers are supposed to appraisal REO’s and Short Sales. Fannie’s interpretation leaves a lot to be desired! Can you say buy-backs anyone?

Realtors & Builders are not prohibited from having contact with or providing information to the appraiser – they are however prohibited from inappropriate or illegal behavior – coercion, extortion, collusion, compensation, inducement, intimidation, bribery, etc.

Interim Final Rule – the rule is out for comment for 60 days…a few tweaks are likely, but this was developed with all the HVCC problems in mind and all the players having input – I do not expect much will change.

Heads Up Licensed LO’s – You’ll Need NMLS Credit Authorization starting 11-1-10

NMLS Requiring Your Credit Report Authorization – November 1, 2010. 

 One of the provisions of the National Mortgage Licensing System is that loan officers must be “financially responsible”.  At the time, everyone wondered what the heck that meant?

 Well, you knew it was going to happen.   The NMLS has announced that beginning on November 1st, 2010, all licensed loan officers (not registered) must authorize them to pull a credit report on YOU—regardless of what your state’s requirements—and even if your credit was previously reviewed. 

 If you will be applying for a license in the future, you must authorize the credit report pull as the time you apply.

 Here’s how it will work:

 You’ll have to log in your NMLS account.

 You will be asked some questions to prove our identity. These are personal questions so your company will NOT be able to answer them for you.  Questions that might be asked would be previous addresses, balances on loans, current or previous phone numbers—things that only you would know.

The fee is $15.

 The report will be considered “soft pull”; it will be thru TransUnion, using Vantage Score® and will be a singe report.  (Hint, pull your own TransUnion report and see exactly what you will need to do to fix any errors.)

 The NMLS will NOT be pulling the credit report.  They are serving as your state’s clearinghouse and it will be your state who will access the NLMS database and randomly pull a credit report.

 There are a handful of states, whose rules state that they will be pulling a report by the end of 2010.  The rest of the states will be between January and March, 2011.

 And, you won’t know when your credit will be checked—it could be a year from now.

 It also means that you are giving them the authority to pull a credit report for years to come.

 More info will be posted in the November 10th issue of  At the NMLS website

In addition, the “state agency checklist”  was updated on October 15, 2010.

Fannie (and Freddie) Controlled By AllRegs???

So, Im in a fight with Fannie–who sicked their lawyers on me for posting Fannie’s Announcements and Lender Letters on website.

Never mind that Fannie is a quasi-goverment agency and the info should be free to anyone (Freedom of Informatioin Act anyone?)

Never mind that when you do a Google search that there are thousands of links directly to Fannie Announcements. (okay, tens of thousands)

Never mind that Mortgage Currentcy shows up first on SEO when “mortgage Rules Fannie” is searched. (and AllRegs does not.)

So, here’s what shows up on Fannie’s website:

“The Fannie Mae Single Family Guides (the “Guides”) are posted on the AllRegs® web site of Mortgage Resource Center, Inc. (“MRC”), which posts the Guides under license from and with the express permission of Fannie Mae. MRC is the exclusive third-party electronic publisher of the Guides. Fannie Mae designates the Guides as found on the AllRegs® web site as authoritative, whether the user accesses the AllRegs® web site using the link from or by its own subscription to the AllRegs® web site. Notwithstanding this designation, Fannie Mae makes no representation or warranty regarding availability, features or functionality of the AllRegs web site.

What the hell? How is it that AllRegs has control over Fannie (and Freddie) content? Could this be one of the causes of the mortgage crisis…that there is a “gatekeeper” for the mortgage rules? And no one can find them unless you subscribe to AllRegs?

Oh, by the way, AllRegs had Freddie lawyers call me too! Wonder how they are going to monitor the tens of thousands of links to their lender letters and announcements?

Am I being singled out? You betcha!

Easy Way to Keep Track of Lender Overlays

Let’s say you do business with 5 or 6 lenders. You (or your compliance department) get email updates. Maybe you get them one at a time. Maybe you get 10 changes at one time. An easy way to keep track of all lenders, all at one time is by subscribing to It’s free and when you register, you can pick and choose which lenders you want updates from. It’s just that easy.