IMA Prime Times: June 15, 2018 Iowa Mortgage Association

June 2018

IN THIS ISSUE

President's Message

Association Updates

Industry News

PRESIDENT'S MESSAGE
Regulatory Relief Bill Great News for Mortgage Industry
Something big happened last month. President Donald Trump signed into law The Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155). The bipartisan law provides limited relief from some capital requirements for community banks and tweaks some mortgage rules around fair lending data, manufactured homes and energy efficiency lending. This is great news for our industry. Learn more about the new law in the Industry News section below.

And don’t forget to visit the IMA website to check out our new redesign. You can also get a look at where we will be having our upcoming events for the next year.

Have a wonderful month!

Marcy Wagner
TitleCore National


ASSOCIATION UPDATES
Nominations Open for IMA’s Mortgage Professional of the Year Award
In the last issue of IMA Prime Times, the Iowa Mortgage Association (IMA) announced the formation of the Mortgage Professional of the Year Award. The award will be given at the 2018 Fall Convention on Oct. 2, to recognize a distinguished mortgage professional in the industry. The nomination deadline is Aug. 1, 2018.

Nominees symbolize excellence in the following categories: 

  • Represents themselves, their company and the industry with the highest standards of ethics and excellence.
  • Demonstrates a continued commitment to community involvement.
  • Has made a significant contribution to the mortgage industry.
  • Is a member in good standing of the Iowa Mortgage Association,

Nominate a candidate.

INDUSTRY NEWS
Regulatory Relief in Sight
President Donald Trump signed S. 2155, the Economic Growth, Regulatory Relief and Consumer Protection Act, into law on May 24, signaling regulatory relief on a number of issues impacting mortgage lenders.

Effective Date(s)
It is important to note that while this bill has been signed into law, most of the provisions will become effective only after rule-writing efforts by the federal banking regulators. This process is often lengthy as the agencies will need to issue a proposal to revise existing regulations, accept comments from industry stakeholders and then issue a final rule establishing a later effective date. In some instances, regulators may elect to provide “exceptive relief” more quickly, but it’s unclear at this time if that will occur with this legislation. During the interim, the IMA advises financial institutions to continue to comply with existing regulatory requirements.

S.2155 Provisions
Of interest, mortgage provisions of S. 2155 that IMA members have supported and advocated for include, but are not limited to:

  • QM status for portfolio loans – Mortgages held in portfolio would be deemed “Qualified Mortgages” (QM) and granted QM safe harbor protections for banks with less than $10 billion in assets provided the loans meet documentation and product limitations outlined in the rule. (Note, this rule does not remove the requirement to consider and verify debt, income and financing sources of the consumer).
  • HMDA “rollback” – Small volume originators (less than 500 closed-end mortgages/500 open-end lines of credit for each of the two preceding years) are exempt from the expanded data collection requirements added by the Dodd-Frank Act (DFA). These institutions are not entirely exempt from reporting, but are required to report only the pre-DFA data points. However, if a bank received a “needs to improve” CRA rating during each of the last two most recent exams or a “substantial non-compliance” rating on the most recent exam, it must still comply with the additional HMDA data collection regardless of origination volume.
  • Small bank escrow exemption – Revises TILA escrow exceptions for first-lien HPMLs by increasing the threshold exemption to include banks with less than $10 billion in assets, that have originated 1,000 or fewer loans secured by a first lien on a principal dwelling during the preceding calendar year which are held in portfolio. However, it appears other existing criteria remains intact to qualify for the exemption including banks must still have originated at least one first lien mortgage loan in a rural area in at least one of two preceding calendar years, cannot currently maintain escrow accounts other than for first lien HPMLS with application dates between April 1, 2010 and before May 1, 2016 or as an accommodation for distressed consumers avoiding default or foreclosure, and must retain the exempted loans within their portfolio. 

S. 2155 also included multiple provisions intended to protect veterans, consumers and homeowners; measures to protect consumer access to credit; and actions to ensure regulations are tailored to better address the risks posed by an institution’s product, services, operations and complexity. Read the full text of S.2155.

TRID Guidance Updated
The Consumer Financial Protection Bureau (CFPB) has released updated guides to assist in implementation of the 2017 and 2018 TILA-RESPA rule amendments, which provided additional guidance and clarification on proper disclosure of construction-perm loans, subordinate lien loans, cash-back purchase transactions, the “black hole” period for redisclosure and more. The 2017 TILA-RESPA rule had an optional compliance period from Oct. 10, 2017 to Oct. 1, 2018. On Oct. 1, 2018 compliance with all the 2017 rule provisions is mandatory. The 2018 TILA-RESPA rule, which was just released in April, permits redisclosure and resetting of the TRID tolerance basis with a Closing Disclosure, and is effective June 1, 2018. 

The CFPB has posted to its website updates to both versions of the Small Entity Compliance Guide (versions 4.1 and 5.2) and Guides to Forms (versions 1.5 and versions 2.1). Because of the optional compliance period for the 2017 rule revisions, the CFPB has kept an old version and new version of each guide to provide implementation support during the optional compliance period. Read the updated guides.


2017 HMDA Data Released
The Federal Financial Institutions Examination Council (FFIEC) announced the availability of data on mortgage lending transactions at 5,852 U.S. financial institutions covered by the Home Mortgage Disclosure Act (HMDA) on May 7, 2018. The release included loan-level HMDA data that covers 2017 lending activity submitted by financial institutions on or before April 18, 2018. Unlike in past years, the HMDA loan-level data made available to the public will not remain static, but will be updated, on an ongoing basis, to reflect late submissions and resubmissions by HMDA reporters.

At this point, only the Modified Loan Application Register (LAR) data is available. Financial institution disclosure statements and MSA and nationwide aggregate reports for 2017 HMDA data will be made available at a later date and will be found here, once they are available. More information about HMDA data reporting requirements is available here.


IFA Calls for 2018 HousingIowa Awards Nominations
The Iowa Finance Authority (IFA) is seeking nominations for the 2018 HousingIowa Awards. These awards recognize outstanding programs, projects and individuals across Iowa’s housing industry. They are chosen based on distinguished leadership and innovation in advancing housing opportunities in Iowa. All nominations are due July 13. 

Awards are recognized in six different categories: Multifamily Housing Development, Single-Family Housing Development, Special Needs Housing Development, Innovation, Legislative Friend of Housing, and Kay Anderson Friend of Iowa. 

More details and a nomination form are available at HousingIowaConference.com. Each nomination is judged by an independent panel of judges. 

Award winners will be announced at the 2018 HousingIowa Conference in Des Moines on Sept. 5.


USDA RD Launches Loan Comparison and Application Guide
The United States Department of Agriculture (USDA) Rural Development (RD) has developed a guaranteed loan refinance comparison and complete loan application guide to assist lenders with selecting the appropriate USDA refinance option for a current direct or guaranteed loan borrower.

The resource guide, which lists all items required for a complete loan application for each refinance type, is available at USDA LINC Training and Resource Library.

For more information about USDA RD’s Guaranteed Home Loan Program please call (515) 284-4667, send an email to rd-grhia@ia.usda.gov or visit www.rd.usda.gov/ia.


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