According to QuestSoft’s third annual compliance survey of lenders, the Dodd-Frank Act ranks as the greatest mortgage compliance concern in 2011. The series of laws passed last year replace the Real Estate Settlement Procedures Act (RESPA) as the highest concern, which topped the list the previous two years.
The survey polled 405 lenders on their level of concern for regulatory changes affecting the mortgage industry in 2011. Seventy percent of lenders responded to the implementation of new regulations under the Dodd-Frank Act as the most significant compliance concern. Rounding out the top three identified concerns were RESPA fee tolerance rules (50 percent cited major concern) and other RESPA issues (46 percent cited major concern).
“It was no surprise to see Dodd-Frank changes as the highest ranking compliance concern among lenders, since the changes will significantly impact lenders of all sizes and the associated rules are being announced right now,” said Leonard Ryan, president of QuestSoft. “It is also interesting to see that even a year after the RESPA’s major overhaul; lenders are still concerned with how to comply with fee tolerance rules and other RESPA-related loan disclosure issues.”
Loan officer compensation, which officially became active in April, and SAFE Act changes, both tied as the fourth highest concern, with 40 percent of lenders citing these regulations as a major concern. Though loan officer compensation received fewer medium concern percentage points, it placed fourth due to more survey participants indicating they were subject to the ruling.
Surprisingly, concern for the multi-state exams that many lenders will face this year remained at the bottom of the list for the second consecutive year; with only 19 percent of respondents citing them as a major concern.
“Although multi-state exams are not required for all lenders, more than half of QuestSoft’s clients will be mandated to partake in state-level exams and be required to export exact loan information on all originated loan files to the agency conducting the exam,” Ryan said. “It does appear that lenders are continuing to place their focus on the most immediate changes based on nationally published deadlines. Unfortunately for them, many state examiners are beginning to request the data for exams and giving lenders only a few days to comply. Therefore, lenders should prepare now to adhere to these long-term compliance protocols.”
QuestSoft provides lenders with multiple software tools to handle federal, state and local lending regulations. Compliance EAGLE is an automated compliance review tool that evaluates a loan file for fulfillment with the full range of mortgage lending regulations, including RESPA, Home Mortgage Disclosure Act (HMDA), Truth in Lending Act (TILA), Community Reinvestment Act (CRA), flood determination requirements and other consumer and predatory lending laws in seconds. Other products offered include HMDA RELIEF and CRA RELIEF, which provide lenders, banks and credit unions specially designed tools to ease the collection, analysis and reporting of HMDA and CRA data.
AVAILABLE SIDEBAR TABLE:
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In a survey of 405 lenders, the level of concern cited for compliance issues in 2011: |
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| High Concern | Medium Concern | Low Concern | ||||
| Dodd/Frank Changes | 70% | 22% | 6% | |||
| RESPA Fee Tolerances | 50% | 36% | 11% | |||
| Other RESPA Issues | 46% | 39% | 12% | |||
| Loan Officer Compensation Rules | 40% | 24% | 20% | |||
| SAFE Act- Nationwide Mortgage Licensing System | 40% | 41% | 17% | |||
| Increased Fair Lending Exam Scrutiny | 36% | 39% | 19% | |||
| July 21, 2011 Launch of CFPB | 36% | 41% | 16% | |||
| Increased CRA Exam Scrutiny | 27% | 35% | 20% | |||
| State Consumer Lending Laws | 25% | 45% | 23% | |||
| Fraud – Borrower Identity | 25% | 42% | 31% | |||
| Risk Retention/ Qualified Mortgages | 24% | 42% | 24% | |||
| Fraud – Income Verifications | 24% | 43% | 30% | |||
| Fraud – Loan Flipping, Collateral | 22% | 39% | 36% | |||
| Multi-State Exam Process (LEF) | 19% | 29% | 24% | |||
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Totals may not add up to 100% due to rounding or responses of “Not Applicable” |
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Posted via email from Title Insurance Fallout from the Michigan Court of Appeals decision tossing out two foreclosures by MERS is sweeping the state of Michigan. Had a call yesterday from someone whose closing was canceled at the last minute, because, MERS had done the foreclosure and quit claimed the property to the bank, which had agreed to sell the home to the caller. My realtor wife advised me title companies across Michigan are backing out of deals and canceling closings. Posted via email from Title Insurance WASHINGTON–(BUSINESS WIRE)– The American Land Title Association (ALTA) reported that its 2010 Year-end and Fourth-Quarter Market Share Analysis is now final. According to the analysis, the title insurance industry generated $9.61 billion in title insurance premiums in 2010, up 0.2 percent from 2009. Premiums were up 2.2 percent after changes in accounting principles were applied to 2009. During the fourth quarter of 2010, the industry reported $2.7 billion in title insurance premiums, up 7.6 percent from the same period in 2009. “After four consecutive years of declining title insurance premiums written, 2010 showed a leveling off,” said Kurt Pfotenhauer, chief executive officer of ALTA. “Despite the difficult operating conditions, the industry remains in a very strong financial position.” While title insurance premiums increased slightly, total operating income fell .6 percent for the fifth consecutive year. In addition, loss and loss adjustment expense increased 9 percent in 2010 compared to 2009, while operating expenses declined only .8 percent. This left an operating loss of over $206 million in 2010 compared to an operating loss of $134 million in 2009. “The industry’s total assets remain at over $8.8 billion with cash and invested assets growing over year-end 2009 to almost $7.7 billion,” Pfotenhauer said. “While statutory reserves fell slightly as a result of claims settlements, reserves remain at over $4.9 billion.” On a state-by-state basis, 29 states, plus the District of Columbia, showed fourth-quarter 2010 written premiums increasing over fourth-quarter 2009 and 21 states recording decreases. Six states were up over 30 percent, five between 20 and 30 percent and eight between 10 and 20 percent. Only two states were down over 20 percent, with the remaining 19 states down less than 10 percent. The six largest states all recorded increases, with Texas (No. 2) at plus 17.6 percent and New York (No. 4) up 21.2 percent. For the full year, 29 states recorded decreases from 2009 levels, but 20 of those declined less than 10 percent and eight of the remaining were under by less than 20 percent. Of the 21 states and the District of Columbia showing year-over-year increases, 19 were up less than 10 percent, two were up less than 20 percent and the District of Columbia recorded an increase of 34.7 percent. Posted via email from Title Insurance
Continuing Ed for Title Agents
The MERS Decision Story
Because, if a MERS foreclosure is in the chain of title, it is, as they say in the title business, “clouded.”In my caller’s case, MERS foreclosed, the homeowners left and bought a new house, the redemption period expired, the
bank sold the house. But, under the Michigan Court of Appeals decision, the former homeowner could sue to get the foreclosure sale set aside, putting the home back into his name. And he would win. So, title companies, who issue insurance guaranteeing to the buyer, and the buyer’s mortgage company, that the seller does indeed have good title to the property. No title policy, no mortgage; no mortgage, no sale.
No telling how far back this can go, what if MERS foreclosed 3, 5, even ten years ago?
Not sure off the top of my head how long they have been around. I have been blogging about MERS for years.
As filing fees for real estate documents increased, the mortgage companies decided to skip paying those annoying fees every time they bought a mortgage.
They had to pay to have it recorded with the county register of deeds, to put the world on notice that there was a lien on the property.
So, the initial mortgage was recorded in the name of MERS, as “nominee”.
Then, every time the mortgage was sold or assigned, nothing else was recorded with the county, just on MERS records.
So, MERS had no actual interest in the mortgages, could not collect any money due on them, and, that is why the court threw out the foreclosures last week.
Continuing Ed for Title Agents
Insurance News – 2010 Ends Four-Year Decline in Title Insurance Premiums, American Land Title Association Market Share Analysis Shows
Continuing Ed for Title Agents
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