Arizona Association of Mortgage Professionals

Fighting HVCC

Arizona Association of Mortgage Brokers

We thought you'd like to know about the efforts of an organization called HVCCPetition.com that is fighting  for the permanent reversal of HVCC.  The two founders of the group, along with Marc Savitt, Immediate Past President of NAMB, and a handful of others, visited Andrew Cuomo's office yesterday.  Click the link "TBWS Daily" below to view the video.

Be sure to go to HVCCPetition.com and add your name to the growing list.

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From an email sent by HVCCPetition.com - Nov. 18, 2009

Frank Garay and Brian Stevens are in New York presenting the HVCC Petition to Cuomo's office right now (117,394 individually printed petition signature pages).  Be sure to stay tuned in to the TBWS Daily for the latest updates directly from New York.  Mark Savitt from NAMB is with them and it looks like they already have Fox News and CNBC covering our collective efforts to get rid of HVCC once and for all. 

The three of them are making it clear to everyone that this is not the end of battle, but just the beginning, and we will not abandon this petition or our efforts to get rid of HVCC until HVCC is Gone!  We are quickly moving from a "minor annoyance" to a "major pain in the @$$" for everyone in support of HVCC and we need to put the pressure on more than ever so please keep forwarding the petition site to everyone you know. 

Everyone that has anything to do with the real estate industry has an obligation to join us in our effort to make their lives and industry better.  We are ramping up our efforts in a big way right now and we plead with you to do the same.  

Thanks so much for your continued support!


HVCC PETITION SUMMARY (HVCCPETITION.COM)

117,394 signatures collected and printed as of 11-16-2009
97,234 of the signatures are confirmed as valid unique petition signers
The 20,160 non-verified signatures collected were not counted in the formal total but were included in the printing for the following reasons.

1. A large percentage of them are believed to be valid but some information was missing.
2. Though thousands of them appeared to be duplicate signatures they contained new horror stories of HVCC victims.  Many Real Estate professionals appeared to be trying to submit fresh stories of how their most recent clients were directly harmed by HVCC.  We felt those stories were relevant and worth including, especially since the new victims listed could be contacted through the signer listed.
3. A few of the duplicates appeared to be a previous signer attempting to update their signature with formal authorization to pass their information along to the press/media since that feature was added to the petition several weeks after it was launched.

39.6% of the petition signers were mortgage originators
29.8% of the petition signers were real estate professionals
17.4% of the petition signers indicated they worked in some other facet of the industry
The remainder of the petition signers were primarily homeowners or potential home buyers

Polls - In addition to the petition itself, we have conducted a number of online surveys to real estate industry professionals regarding HVCC.  Each poll question was preceded by an emphatic plea to respond with accurate and verifiable data only.  Even so, we acknowledge that the polls were not conducted in a scientific and controlled manner so the results may not be 100% accurate, but the story they tell is still very revealing.

How did your last "purchase" HVCC appraisal compare to the contract price?
533 - A. At or above purchase price.
151 - B. Low - but less than 3%
224 - C. Low - Between 3% and 6%
262 - D. Low - Between 6% and 10%
278 - E. Low - Between 10% and 20%
170 - F. Low - More than 20%

How could we best stabilize home prices?
407 - A. Extend the $8,000 tax credit.
144 - B. Increase high balance conforming limit to $1MM.
257 - C. Bring back Seller Funded Down Payment Assistance.
1025 - D. End HVCC.

How many of your transactions have died due to HVCC?
128 - A. 0
152 - B. 1
187 - C. 2
794 - D. 3 or more

Do you think HVCC could kill Fannie Mae?
208 - A. Yes. FHA is easier, so less FNMA loans will get done.
96 - B. No. As long as they need help, the Fed's will give it.
35 - C. I'm not sure, but I'd like to see some real data on it.
54 - D. I'm not sure, but given the choice - I'll go FHA every day.
94 - E. Both C and D.

Legislative Affairs Update from AAMB's Jody Davis

ARIZONA ASSOCIATION OF MORTGAGE BROKERS 

 

Federal Update

NAMB has sent out legislative alerts over the past couple of weeks with regards to H.R. 3126 (Consumer  Financial Protection Agency Act of 2009).  Since Arizona does not have a member on the House Financial Services Committee we really could not participate in the call to action like other states.  We have been monitoring the items and I wanted to give everyone an update and clarification to what is occurring.

H.R. 3126 is basically a bill that is attempting to merge several government agencies into on one huge bureaucratic department.  Through this, they have been jockeying for power with regards to financial reform.  So this bill encompasses numerous topics that are not all related to mortgages.  When the committee agreed to hear the bill, there was a push by NAMB to draft amendments that would address other pending items while trying to remain as innocuous as possible.  The effort produced 3 amendments that addressed the following;

Amendment 1 - nullifying the HVCC, not just an 18 month moratorium but killing it altogether.  This was sponsored by Miller and Childers who have been a huge help to small business and the mortgage community.

Amendment 2 – delay the HUD rule until the FED, HUD and industry could work out the conflicts between the two rules.  This was sponsored by Biggert.

Amendment 3 - prevent CFPA from capping compensation to any person, ensure fair dealings with consumers and ensures no disparate treatment among industry participants whether they are federally chartered, big or small.  This was also a Miller sponsored amendment.  

The results of NAMB’s efforts were victorious on two fronts.  The first amendment nullifying HVCC was approved by the committee.  This will work on the premise that loan officers licensed under the SAFE Act would be able to order the appraisals directly and there is a large push to have the appraisers registered on the NLMS system too.  This will ensure tracking and regulation of the intended rule.

The second amendment mentioned above was not allowed in its entirety.  There was much deliberation on the exact dates of postponement and this overshadowed the real intent of the amendment.  It did however result in the allowance of lenders/brokers using either GFE until July 1, 2010.  This solves a more critical issue that was more of an underlying factor than the FED and HUD rules conflicting.  The unspoken possibility was the large lenders would stop lending until they could finish their beta testing on the new forms.  This could have shut down the industry in January until a compromise could have been achieved.

The third amendment is still a possibility but will have to come from changes made along the way.

Finally H.R. 3126 will ultimately merge with several other regulatory reform bills such as H.R. 1728 (Mortgage Reform and Anti-Predatory Lending Act of 2009).  The companion legislation has not been introduced into the Senate although it is expected in the coming weeks.    There will be several state of the industry announcements and forums in the coming weeks.  Stay tuned to those as the situation is extremely fluid and can change in the blink of an eye.                           

Arizona Update

The legislature will be called into special session later this month or sometime in November.  The budget must be dealt with and DFI still has no money to implement the SAFE Act registration process.  For those of you who attended AAMB’s Mortgage Marketplace Conference, you heard that DFI has five people to process the anticipated 5,000 applications for SAFE.  The budget passage would potentially add another 5-7 people to process the applications.  Since this is still a huge unknown, AAMB encourages everyone to take their classes and take the test as soon as possible.  DFI has 120 days to process the paperwork and they will probable use every part of it.  

I realize this is a long update but I thought everyone needed to know what the results of the amendments mean to us and what the association has done to insure the longevity of our industry. 

Respectfully,

Jody Davis

Government Affairs

Arizona Association of Mortgage Brokers

   

  

Arizona Legislative Update

Arizona Association of Mortgage Brokers

Here's an update from AAMB Legislative Affairs Chair Jody Davis about the Arizona legislative landscape:

The atmosphere in the political arena has become increasingly unstable.  The Arizona legislature has yet to produce a working budget.  The stand off between the Governor and the Republican legislature has reached boiling point.  The Governor refuses to sign anything that does not include a sales tax hike.  Meanwhile the leaders of the legislature refuse to even discuss it.  The multi billion dollar deficit is not going away and will become even more problematic the further it lingers. 

The Governor will call a special session later this month or the beginning of November.  Not only are the budget items on the table, but several entities start to run out of money the end of this month and if not fixed, we could all go without services to some degree.  What does this mean to mortgage professionals?  Simply put, get your education and testing completed now to beat the rush.

You may ask, why is this so important, don't we have until June 30 of next year?  DFI has only a handful of people working in licensing.  The money has yet to be granted by the legislature to hire more staff.  The original budget called for 1.5 million, it is now down to a proposed 550k.  It might go down further if the House gets their way.  This means there might only be enough money to hire an additional 4-5 people.  They will have to do the work they have now plus process 5000 requests for loan officers.  This will take the processing time of a couple of weeks to several months.  Not to instill a panic, but applications received after March might not make the cut off of June 30.   

Get signed-up for your 20-hour mandatory education course...click here.

For more information about licensing, click here.

  

Update on legislation that could affect YSP

Arizona Association of Mortgage Brokers 

There have been questions about legislation that will impact YSP for mortgage originators and what Arizona originators can do about it.

Here's an update from AAMB's Government Affairs Chair Jody Davis: 

"HUD's new RESPA rule and the Federal Reserve's new rule (Regulation Z; Docket No. R–1366) both could eliminate YSP.  Right now, both rules are in an 'open for comment' period. 

"There will be CALL TO ACTION from NAMB in the next few weeks.  Right now, NAMB is meeting with all the organizations involved to get the facts, determine their position and create a game plan.  Watch for more information to come.

"The Federal Reserve rule appears that it would eliminate the ability for a loan originator to be paid based upon loan amount or interest rate.  This applies to both front side fees and back side fees.  This essentially eliminates backside pricing all together and will force originators to charge a flat fee on the front end.  The comment period for this rule ends 12/24/2009..

"Some people have asked what happened to 3915.  It never went into law.  It passed the house but didn't get through the senate."

Once a CALL TO ACTION has been created, more information will be posted at this blog about what can be done to help protect the mortgage originator industry. 

 

    

AAMB Legislative Affairs Update

Arizona Association of Mortgage Brokers

Legislative Affairs Chair Jody Davis provides a snapshot of what's going on in Arizona and at the Federal Level.

Have a question for Jody Davis?  Post in the comments section below.

  

Federal Reserve Board proposes significant changes to Regulation Z (Truth in Lending)

Fed Chairman Ben Bernanke, and Fed Board Governor Elizabeth Duke.

Arizona Association of Mortgage Brokers -there are potentially big changes coming down the road regarding consumer disclosures, and Reg Z (Truth in Lending).

Fed Press Release:

"The Federal Reserve Board on Thursday proposed significant changes to Regulation Z (Truth in Lending) intended to improve the disclosures consumers receive in connection with closed-end mortgages and home-equity lines of credit (HELOCs). These changes, offered for public comment, reflect the result of consumer testing conducted as part of the Board's comprehensive review of the rules for home-secured credit. The amendments would also provide new consumer protections for all home-secured credit.

"Consumers need the proper tools to determine whether a particular mortgage loan is appropriate for their circumstances," said Federal Reserve Chairman Ben S. Bernanke. "It is often said that a home is a family's most important asset, and it is the Federal Reserve's responsibility to see that borrowers receive the information they need to protect that asset."

To shop for and understand the cost of credit, consumers must be able to identify and understand the key terms of the mortgage. In formulating the proposed revisions to Regulation Z, the Board used consumer testing to ensure that the most essential information is provided at a suitable time using content and formats that are clear and conspicuous.

"Our goal is to ensure that consumers receive the information they need, whether they are applying for a fixed-rate mortgage with level payments for 30 years, or an adjustable-rate mortgage with low initial payments that can increase sharply," said Governor Elizabeth A. Duke. "With this in mind, the disclosures would be revised to highlight potentially risky features such as adjustable rates, prepayment penalties, and negative amortization."

We will very shortly be in the 120 day comment period, and then we are likely to see some changes occur.  The National Association of Mortgage Brokers is aware, and will be taking action soon.

Here are more details from the Federal Reserve, and here is a summary of the proposed changes.

 

Alert: Mortgage Disclosure Improvement Act (MDIA) Effective July 30, 2009

Arizona Association of Mortgage Brokers -  On July 30, 2009 guidelines under the Mortgage Disclosure Improvement Act (MDIA) released by the Federal Reserve Board will go into effect.  This is two months earlier than the original date.

This new law will affect your business in the following areas:

• the collection of upfront fees from borrowers

• new 3-day and 7-day regulations regarding the Truth-in-Lending Statement (TIL)

These are important changes and will soon become the law of the land.  Be sure to familiarize yourself with MDIA and change your internal systems accordingly.

Here is a summary of the new law, from AllRegs, and here is a copy of the Mortgage Disclosure Improvement Act.

Please use the "ShareThis" button below to forward this article to your mortgage broker colleagues.

 

Are you ready for the August 1st, 2009 deadline for the FTC's Red Flag Rule?

Arizona Mortgage Brokers Association - On August 1st, 2009, the Federal Trade Commission's (FTC) Red Flag Rule goes into mandatory compliance for all Mortgage Brokers. 

You may recall that this rule had been delayed to allow time for compliance.  Well, the day of reckoning is here.

Here are the basic four provisions of the statute:

1. Identify Relevant Red Flags - identify the red flags of identity theft you're likely to come across in your business.
2. Detect Red Flags - Set up procedures to detect those red flags in your day-to-day operations.
3. Prevent and Mitigate Identity Theft - If you spot the red flags you've identified, respond appropriately to prevent and mitigate the harm done.
4. Update your Program - the risks of identity theft can change rapidly, so it's important to keep our program current and educate your staff.

Once again, it is important that we understand that this Red Flag Rule is not a casual suggestion, on August 1st, 2009, it will be law.

Here are some resources to help you get your program built, if you haven't already:

• Federal Trade Commission (FTC) - Fighting Fraud with the Red Flag Rule - A How-To Guide for Business.
• National Association of Mortgage Brokers (NAMB) - Mandatory Red Flag Compliance Program.

As mortgage brokers, we are always looking for ways to bring value to our clients.  It would be a great benefit for you to explain to your clients the steps you now have in place to protect their identity from theft, and fraud!

Take action on the HVCC!

Arizona Association of Mortgage Brokers - a legislative call-to-action from the National Association of Mortgage Brokers (NAMB.)

Please call your Representatives today and urge them to cosponsor H.R. 3044. The bill was introduced by Representatives Childers (D-MS) and Miller (R-CA) and it calls for an 18 month moratorium on the Home Valuation Code of Conduct (HVCC).  Click here for a copy of NAMB’s press release on H.R. 3044.

When you speak with your Representative, simply ask him or her when they plan to sign on as a cosponsor of H.R. 3044. In addition, please refer to the two following articles on the HVCC in your discussion and forward them to their offices.  Click here for contact information for your Representative.

Low Ball Appraisals Spark Uproar – Washington Post (July 3, 2009)

Arizona Republic: New Appraisal Law Creates Unintended Consequences

Arizona Association of Mortgage Brokers -- An article in yesterday's Arizona Republic addresses the possible unintended consequences of the new House Valuation Code of Conduct (HVCC) that went into effect on May 1, 2009.

Mortgage brokers across the country, working together through the National Association of Mortgage Brokers (NAMB), have long been contending that this will ultimately hurt the consumer (see NAMB's position paper).

Now that this law has gone into effect, we would like to hear from mortgage brokers, appraisers, and real estate agents about their view of unintended consequences. What has your experience been?

Please post a comment below.