Tax and Documentation Considerations; State Lending Law Changes From Coast to Coast

News

Are there any updates to tax
information and/or documentation requirements? Yes, a handful.

Stearns requires
that all loans where tax returns are being used in the calculation of income
with an approval date later than 10/17/16 will require 2015 personal and
business tax returns. If tax transcripts are not yet available (no record found), borrower may
provide stamped returns by the IRS, along with proof of taxes paid or refund
received.

Beginning with new CD requests
on or after Monday, October 24th, Flagstar will offer originators the ability to
request a CD once an Approved with Conditions status has been received provided
certain requirements are met. A recorded training will be available soon. 

The following Fifth Third Mortgage Company Organization Identification Numbers
are required when transferring servicing and beneficial rights for a loan to
FTMC through MERS:  1000538 (Fifth Third Mortgage
Company) must be listed as servicer. 1000538 (Fifth Third Mortgage Company)
must be listed as the investor and 1000142 (Fifth Third Bank) must be listed as
the Sub-Servicer.

Fifth
Third published recent lending
news which included if an AUS is rerun or any changes are made exceeding AUS
resubmission tolerances, the updated AUS must be delivered to Fifth Third prior
to purchase.  In addition, when AUS requires that an individual’s SSN must
be verified a signed SSA89 and 3rd party verification of the SSN must be in the
file. 

First
Community
Mortgage has posted guideline
updates effective November 1st. Changes have been made to
its Non-Warrantable Condos Program, Self-Employed Bank Statement Program, as
well as information on Foreign Nationals, recent housing events and real estate
investor loans. Click here to view the bulletin.

NewLeaf
Wholesale 
issued the following
reminder: When adding appraisal fees to the Loan Estimate (LE) on and after
November 1, 2016, please refer to the new VA Fee Sheet located on the U.S
Department of Veterans Affairs website.

In terms of vendor services, “With increasing levels of identity theft and fraud, the IRS is constantly changing their setup requirements to remain compliant. 4506-Transcripts.com stays up to date with these changes so you don’t have to. This enables us to deliver transcripts to our customers fast and without delay in service. We also offer VOEs for originating loans and quality control prior to selling. Call 4506-Transcripts.com at 925-927-3333 or visit our website at www.4506-Transcripts. com today to discover how you can utilize our expertise in these areas.”

Every lender has Federal laws
and regulations to sort through. Layer on a series of state-level changes and
it can create quite a morass. Let’s see what some random states have been up to
lately in terms of residential lending changes.

Massachusetts has adopted provisions under its Truth
in Lending Act.
The first amendment made relates to the periodic statements which financial
institutions are required to send to consumers regarding open-end credit. The
changes include how late payments are treated by the financial institution and
creditors. Another amendment provides that if a regulation of the federal TILA,
the CFB’s Regulation Z, the Official Staff Commentary, or a disclosure or model
form provided by a creditor thereunder conflicts with a state provision, the
Commissioner may waive, in writing, the conflicting Massachusetts provision,
provided the federal provision is not substantially less consumer protective.
The final amendments to the TILA add provisions for LEs and CDs. These provide
that compliance with the federal requirements for the contents of these
disclosures will also constitute compliance under the Massachusetts Truth in
Lending Act. 

California has passed SB 777 which amends its Financial Code to add section 22050.5. Existing law exempts from
regulation a person who makes five or fewer commercial loans in a 12-month
period so long as those loans are incidental to the business of that person.

California adopted AB 691 which amends
the California Probate Code to authorize a decedent’s personal representative
or trustee to access and manage digital assets and electronic communications. The
Act does not apply to a digital asset of an employer used by an employee in his
or her ordinary course of business. The Act allows a user to use an online
tool, will, trust, power of attorney or other record to direct a custodian of
digital assets to disclose some or all the user’s digital assets to a
designated recipient.

California passed SB 657 which updates
the California Residential Mortgage Lenders Act to include in the
definition of “Lender.” The revision also now authorizes the Commissioner, at
his or her discretion, to require a lender to continuously maintain a net worth
greater than $250,000 but not to exceed the net worth required of an approved
FHA lender in addition to maintaining the existing requirement that a licensee
shall continuously maintain a minimum tangible net worth of $250,000, The
provisions of SB 657 are effective January 1, 2017.

California has also passed SB 1150
which amends the
California Civil Code
to provide foreclosure protection to a person claiming to
be the successor in interest of a deceased borrower. SB 1150 prohibits a loan
servicer from recording a notice of default in the event a person, not a party
to the loan or promissory note, notifies the loan servicer that the borrower
has died and claims to be a successor in interest to the borrower. SB 1150
requires that, within 10 days of a person being deemed a successor in interest
the servicer shall provide, at a minimum and in writing, to the successor in
interest: the loan balance, interest rate and interest reset dates and amounts,
balloon payments, prepayment penalties, default or delinquency status, the
monthly payment amount and the payoff amount.

The Oregon Department of Consumer and Business
Services implemented provisions concerning commercial
construction lending exemption
under its licensing of mortgage loan originator
regulation. The Oregon law exempts lenders from the SAFE Act who make
commercial construction loans from the licensing requirement under certain
circumstances with proper endorsements. To qualify for the exemption, a lender
would have to verify that the borrower is a licensed general contractor, that
the loan is for a business purpose that will be used to construct a residential
structure, and adhere to certain other provisions. 

The Tennessee Department of Financial Institutions
has announced the
annual supervision fees
 for non-depository
financial institutions for fiscal year 2016-2017, which became effective on
October 14, 2016. Theannual
supervision fee for non-depository financial institutions in fiscal year
2016-2017, is $1,025.00 for mortgage licensees and flexible credit licensees,
and $625.00 for all other licensees and registrants, except mortgage loan
originators, who will continue to pay a licensing and renewal fee of $100.00
and a sponsorship fee of $100.00. The supervision fee includes the annual
licensing or registration fee and the costs of a routine examination or
investigation (actual expenses are still paid for out-of-state examinations and
inspections).

New
York
 recently enacted
provisions
 concerning the
administration of digital assets. The article applies to fiduciaries acting
under a will, trust or power of attorney; executors, administrators and
personal representatives of decedents; guardians; trustees acting under a
trust; and custodians (if the user resides in the state of New
York). These parties must have been granted their powers on or after the
article’s effective date. This article provides user direction for disclosure
of digital assets in specific situations. Part 3 of the article outlines the
disclosure of content of electronic communications of a deceased
user. This portion of the articles explains procedures for principals,
trustees, and guardians of wards who wish to access these communications. Part
4 of the article describes the legal duties of fiduciaries. These duties
mirror those imposed on a fiduciary who manages tangible property such as the
duty of care, the duty of loyalty and the duty of confidentiality. Custodians
must honor a request for disclosure of digital assets or terminate a user’s
account within 60 days of receipt. 

Pennsylvania amended certain provisions
regarding powers
of attorney
. These
changes take effect immediately. Some of the highlights to the amendment
include the following. The amendment incorporates a section related to
governing documents of certain entities. A power contained in the governing
document for a corporation, partnership or limited liability company or other
legal entity by which a director, partner or member authorizes others to do
other things on behalf of the entity or a proxy or other delegation to exercise
voting rights or management rights with respect to a legal entity. The
amendment also briefly addresses the following topics: a spouse’s power to
claim an elective share, the durable power of attorney, and short form
certificates for notarial acts.

The Montana Department of Administration amended
its provisions
 by reducing its licensing
renewal fees for 2017 by 50%. This temporary rule is set to expire on March 1,
2017. In addition, the Department also adopted a new rule pertaining to the
clarification of the definition of “regularly engage.” The provision regarding
this new rule is effective on October 15, 2016.

After
moving higher last month rates have been relatively stable since. Yesterday the
U.S. Treasury market saw some backtracking after enjoying a week of slim daily
gains and some steepening of the yield curve (the 2-year to 10-year stands at
100 basis points, or 1%). Agency MBS prices closed modestly changed and the
10-year T-note traded in a very small 5 basis point range and closed at 1.81%.

But
that was then, and this is now, and we’ve had the usual “first Friday of every
month” spate of employment data, this time for October. Nonfarm Payrolls,
expected at +175k, came in at +161k but with a back-month revision higher.
Average Hourly Earnings, expected +.3%, were +4%. And the headline Unemployment
Rate, expected at 4.9%, came in there. (We also had the September Trade
Balance, which rarely moves bond markets, at $36.4 billion.) The various
Federal Reserve Presidents are back on the speaking circuit, so their statements
may garner some attention but the odds are certainly favoring a short-term rate
increase in December. Anyway, after the employment data rates are with the 10-year
at 1.82% and agency MBS prices roughly unchanged.

Jobs and Announcements

Cascade Financial Services is seeking a full-time Doc Funding Manager to work at its corporate office in Gilbert, AZ. Cascade has been in business since 1999 specializing in affordable housing financing for manufactured home buyers, and continues to grow! “We need a seasoned mortgage lending expert to manage operations in the document preparation and funding department. This position is responsible for directing the closing process for all mortgage loans funded, handling the production of closing documents, managing, hiring and training department staff and ensuring compliance to all regulations. Candidates must have management experience and at least 5 years’ experience in doc drawing and funding and knowledge of TRID and FHA/VA lending. Manufactured Housing and Construction-to-Perm Lending experience very helpful. Outstanding customer service skills and the ability to work independently and with others as a team in a fast-paced environment. The position reports to Cascade’s CEO. If interested, please email confidential resumes to Krista Truman.

Carrington Mortgage Services is extending its reach and is searching for Wholesale Account Managers in Plano TX, Anaheim, CA, and Windsor CT, and a Wholesale Regional Sales Manager for the Southeast United States. Carrington also has opportunities for a Processing Manager in Nashville TN and a Retail Branch Manager in Orlando FL. Carrington is a fully integrated mortgage company with mortgage lending and servicing operations and an affiliated real estate brokerage. “We are part of Carrington Holding Company, LLC, which owns and operates multiple businesses that cover virtually every aspect of single family residential real estate transactions. We are proud to announce that we have been named as a Top Mortgage Lender by Scotsman Guide Magazine! Also, we’re on the Mortgage Executive 50 Best Companies to work for 2016! Please contact Carlos Fernandez (949-517-7204) with inquiries or resumes.

In retail job news, “Looking for an exciting and challenging new adventure? California’s KeyPoint Credit Union is currently seeking talented and motivated Mortgage Loan Officers to join its award-winning team. Awarded 2015 and 2016 ‘Top Work Places’ by Bay Area News Group, we are a passionate and thriving organization. Please visit us at https://kpcu. com/about-us/careers#tab2 for the complete job duties and to apply.”

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