IMA Prime Times: December 14, 2018 Iowa Mortgage Association

December 2018


President's Message

Association Updates

Industry News

IMA Sets 2019 Agenda, Goals
The winter season has begun and many changes are underway in our industry. The IMA Board of Directors met this past week to discuss our 2019 agenda, and I am very excited about the year to come. Our goal is to increase our educational offerings and also to keep you up to speed on how other lenders nationally are handling changes.

As many of you know, the Federal Housing Finance Agency (FHFA) on Nov. 28, raised the conforming loan limit for 2019 by 6.9 percent to $484,350, with the cap for higher cost areas set at $726,525. The conforming loan limit as established by the Housing and Economic Recovery Act (HERA) is reviewed each year and adjusted as necessary to reflect the change in the average U.S. home price. The new limits are effective as of Jan. 1, 2019. The Federal Housing Administration (FHA) and the U.S. Department of Veterans Affairs (VA) are expected to adopt the same loan limits for 2019.

According to the American Enterprise Institute, in 2019 we can expect that the housing market will plateau at a high level and will become more bifurcated between first-time buyers and repeat buyers in 2019. This means that we need to increase our marketing efforts and fully embrace the digital strategies we have all been kicking around over the past few years. The next first-time homebuyer population expects their transaction to be faster and less of a burden than those of the past. With fewer applications in the market, this also gives an opportunity for good producers to stand out.

I would encourage you to seek new ways of generating business in 2019. We here at the IMA want to help with education and there is also a large network of peers that are willing to help in generating new ideas and networking opportunities. Kick the year off with our Business Planning Retreat in January and then keep the momentum going with our spring conference. Together we can grow through change. To do this we must join together to make homeownership more available to the residents of Iowa.

I wish you all the best this holiday season and I cannot wait to see you all working hard in 2019!

Laura Kay Sheely
Arch Mortgage Insurance Company

Register Now for IMA Business Planning Retreat
The IMA is hosting two one-day Business Planning Retreats in January. The first will be Jan. 8, at the Iowa Bankers Association, and the second will be Jan. 9 at the Isle Hotel in Bettendorf. The retreat is designed to help attendees generate new ideas for 2019 and to build a solid business plan that will put those ideas into action. The retreat will include group work sessions, idea brainstorming and plenty of ways to transform production for the next 12 months. At the end of the day, attendees will walk away with a complete business plan to implement in 2019. The cost to attend the retreat is $50 for IMA members and $100 for nonmembers. Learn more or register.

NMLS Renewal Deadline: Dec. 31
The Nationwide Mortgage Licensing System and Registry’s (NMLS) 2019 renewal period began Nov. 1, and continues through Dec. 31, 2018. All Mortgage Loan Originators (MLOs), as defined in Regulation G, 12 CFR 1007, who are registered with the Registry are required to complete the annual registration renewal prior to Dec. 31, 2018. Information regarding the NMLS registration renewal process is available here

One exception to the renewal requirement is for MLOs who completed their registration with the registry less than six months prior to the end of the annual renewal period which is Dec. 31, 2018. For example, if an MLO was registered on or before June 30, 2018, they must renew their registration during the 2019 renewal period; however, if the MLO was registered on or after July 1, 2018, renewal is not required during the 2019 renewal period.

Update on Flood Determination Form
The current version of the Special Flood Hazard Determination Form (SFHDF), FEMA Form 086-0-32 published on June 1, 2016, expired on Oct. 31, 2018. The SFHDF is required for all federally backed loans and is used by lenders to determine the flood risk for their building loans. FEMA (Federal Emergency Management Agency) oversees the National Flood Insurance Program (NFIP) and is responsible for updates to the SFHDF.

FEMA has yet to indicate when an updated form will be released. FEMA has provided guidance indicating the existing form should be used until the new form is made available. FEMA has indicated updates related to release of the new SFHDF will be made available on FEMA’s website.

Proposal to Raise Residential Real Estate Appraisal Threshold
The financial regulatory agencies (the Agencies) issued a notice of proposed rulemaking to raise the threshold for residential real estate (RRE) transactions requiring an appraisal to $400,000. Rather than requiring an appraisal, the proposal would require that RRE transactions exempted by the threshold obtain an evaluation consistent with safe and sound banking practices. Evaluations provide an estimate of the market value of real estate but could be less burdensome than appraisals because the Agencies appraisal regulations do not require evaluations to be prepared by state licensed or certified appraisers. In addition, evaluations are typically less detailed and costly than appraisals. 

The proposal also would incorporate the rural residential appraisal exemption in the Economic Growth, Regulatory Relief and Consumer Protection Act to the list of exempt transactions and require evaluations for these exempt transactions. In addition, the proposal would require institutions to appropriately review appraisals for compliance with the Uniform Standards of Professional Appraisal Practice, as mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act. Comments are due Feb. 5, 2019. Read the proposal in the Dec. 7, 2018 Federal Register.

2019 Regulatory Threshold Adjustments
The federal financial regulators have released the dollar threshold at which “higher-priced mortgages” subject to certain appraisal requirements are exempt from the requirement to obtain a third-party appraisal for 2019. The threshold will increase from $26,000 to $26,700 in 2019. The Federal Reserve and the Consumer Financial Protection Bureau also announced the threshold under which consumer credit transactions under Regulation Z (Truth in Lending Act) are exempt will increase from $55,800 to $57,200 effective Jan. 1, 2019. Read more on the HPML threshold increase. Read more on the Reg. Z increase.

Online Trainings Available for USDA RD Housing Program
The USDA Rural Development (RD) has a series of online training webinars available to assist lenders who use the agency’s Single Family Housing Guaranteed Loan Program. The webinars can be accessed on the USDA LINC Training and Resource Library. Nearly 50 on-demand trainings are available 24 hours a day, seven days a week on such topics as how to submit a complete loan application, updates to the USDA’s housing program handbook, procedural changes, the agency’s Guaranteed Underwriting System (GUS) and much more. 

Changes to Chapter 9 of Handbook (HB-1-3555) for the agency’s Single Family Housing Guaranteed Loan Program are effective Dec. 15, 2018. Please visit the USDA LINC Training and Resource Library for information about the changes and a copy of HB-1-3555 Chapter 9. The chapter has been streamlined and contains simplified language. Some of the more significant changes include:

  • Added guidance for proof of separation that has exceeded three months to exclude an adult (and their income) from the household.
  • Updates to shared custody – applicant certifies the number of household members on Form RD 3555-21. No additional documentation required (use of IRS Publication 501 has been removed).
  • Assets guideline has been raised from a $5,000 threshold to a $50,000 threshold for inclusion in annual income calculation.
  • Balance sheet is no longer required for self-employed applicants.
  • New matrix (Attachment 9-A) outlining guidance on income and deductions. 

For more information about USDA RD’s guaranteed home loan program please call 515-284-4667, email or visit

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