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Freddie Mac updates Covid-19 FAQs
On July 29, Freddie Mac updated its Covid-19 frequently asked questions regarding mortgage origination, underwriting, and loan eligibility for sellers. The update addresses questions regarding, among other things, (i) obtaining 2019 tax returns; (ii) borrower creditworthiness; (iii) construction conversion and renovation mortgages; and (iv) appraisal reports. Previous InfoBytes coverage on FAQ updates is available here.
Louisiana Office of Financial Institutions extends emergency declarations to non-depository entities
On July 24, the Louisiana Office of Financial Institutions extended emergency declarations for residential mortgage lenders, check cashers, bond for deed escrow agents and repossession agents, brokers and lenders licensed under the Louisiana Consumer Credit Law and Deferred Presentment and Small Loan Act, and pawnbrokers. The orders were previously covered here. Such entities are granted the authority to temporarily close licensed locations within Louisiana or to temporarily close and/or relocate to another location within the state. Mortgage loan originators are permitted to work from home, whether located in Louisiana or another state, even if the home is not registered with the LOFI. The declarations also provide instructions for notifying the LOFI of a temporary location change. The declarations will remain in effect as long as there is a public health emergency relating to Covid-19, or until rescinded or replaced.
FHFA extends Covid-19 origination flexibilities to August 31
On July 9, the Federal Housing Finance Agency (FHFA) announced the extension of several loan origination flexibilities put in place to assist borrowers during the Covid-19 pandemic. Specifically, FHFA has extended until August 31, the following provisions: “(i) alternative appraisals on purchase and rate term refinance loans; (ii) alternative methods for documenting income and verifying employment before loan closing; and (iii) expanding the use of power of attorney and remote online notarizations to assist with loan closings.” The extensions are reflected in updates to Fannie Mae Lender Letters LL-2020-03 and LL 2020-04 and Freddie Mac Guide Bulletin 2020-27.
State Issues, Covid-19, District of Columbia, Consumer Credit, Credit Report, Consumer Finance
On July 7, the Kansas Office of the State Bank Commissioner again extended its remote work guidance for mortgage companies, mortgage loan originators, supervised loan licenses, credit service organizations, money transmitters, and credit notification registrations, previously covered here. With the update, working from home is permitted through September 15.
CFPB issues interpretive rule on determining underserved areas
On June 23, the CFPB issued an interpretive rule to provide guidance for creditors and others involved in mortgage origination on the CFPB’s process for determining which counties and areas are considered “underserved” for a given calendar year. This interpretive rule supersedes certain parts of the official commentary to Regulation Z that became obsolete when HMDA data points were replaced or otherwise modified by the 2015 HMDA Final Rule. Lenders use the CFPB’s annual list of rural counties and rural or underserved counties when determining qualified exemptions to certain TILA regulatory requirements, such as “the exemption from the requirement to establish an escrow account for a higher-priced mortgage loan and the ability to originate balloon-payment qualified mortgages,” and use the CFPB’s Rural or Underserved Areas Tool to assess whether a rural or underserved area qualifies for a safe harbor under TILA’s Regulation Z. Under the interpretive rule, the CFPB will determine whether an area is considered “underserved” by counting first-lien originations from HMDA data from the preceding calendar year. The interpretive rule also discusses certain “covered transaction” exclusions that will not be counted related to (i) construction methods and total units; (ii) open-end lines of credit and reverse mortgages; (iii) business or commercial purposes; and (iv) demographic information where both the applicant’s and co-applicant’s ethnicity, race, sex, and age are all reported as “not applicable.” The interpretive rule is effective upon publication in the Federal Register.
Washington Department of Financial Institutions extends guidance on remote work for mortgage loan originators
On June 22, the Washington Department of Financial Institutions issued interim regulatory guidance to licensed mortgage loan originators and companies that sponsor them relating to temporary remote work. The guidance extends earlier interim guidance permitting mortgage loan originators to work from home, previously covered here, until December 31, 2020.
Kansas extends remote work guidance for certain licensees
On June 11, the Kansas Office of the State Bank Commissioner extended its remote work guidance, previously covered here, for mortgage companies, mortgage loan originators, supervised loan licensees, credit services organizations, money transmitters, and credit notification registrants. Licensed or registered individuals and entities are permitted to work from their residences or a company designated location, provided certain requirements are met, through July 15, 2020.
CFPB releases TRID factsheet and FAQs
On June 9, the CFPB released a factsheet on TRID Title Insurance Disclosures and FAQs regarding lender credits on the total payments disclosure, the optional signature line, and separating consumer and seller information. Highlights of each document include:
- TRID Title Insurance Disclosures. The factsheet discusses the two forms of title insurance commonly purchased in residential transactions—lender’s title insurance and owner’s title insurance. The factsheet breaks down the disclosure rules for each, including, among other things, (i) when and how the costs are required to be disclosed; (ii) specifics regarding simultaneous title insurance; and (iii) differences between state disclosures and TRID disclosures for simultaneous rates. The Bureau also provides detailed disclosure examples for various title insurance scenarios.
- FAQs. The updated FAQs note, among other things, that when providing separate closing disclosures to sellers and consumers, the TRID Rule requires seller-paid loan costs and other costs to be disclosed on page 2 of the consumer’s Closing Disclosure. Additionally, the FAQs provide a breakdown of the Total of Payments disclosure on the Closing Disclosure and discuss when a creditor may require a consumer to sign a Loan Estimate or Closing Disclosure.
FHFA extends Covid-19 origination flexibilities to July 31
On June 11, the Federal Housing Finance Agency (FHFA) announced the extension of several temporary origination flexibilities put in place to assist borrowers during the Covid-19 pandemic. Specifically, FHFA has extended until at least July 31, the following flexibilities: “(i) alternative appraisals on purchase and rate term refinance loans; (ii) alternative methods for verifying employment before loan closing; (iii) expanding the use of power of attorney and remote online notarizations to assist with loan closings; and (iv) authority to purchase mortgages in forbearance.” The extensions are reflected in updates to the following Fannie Mae Lender Letters LL-2020-03, LL 2020-04, LL-2020-06, and Covid-19 selling FAQs. Similar updates include Freddie Mac’s Guide Bulletin 2020-23 and Covid-19 selling-related FAQs.
Louisiana Office of Financial Institutions updates non-depository emergency declarations
On June 5, the Louisiana Office of Financial Institutions updated its non-depository 2020 Covid-19 emergency declarations to extend earlier guidance regarding closure of licensed locations and temporary location changes for residential mortgage lenders, brokers and originators, check cashers, lenders or brokers licensed pursuant to the Louisiana Consumer Credit Law and the Louisiana Deferred Presentment and Small Loan Act, pawnbrokers, and repossession agents and bond for deed escrow agents. The original emergency declarations were previously covered here, here, here, here, here, here, and here. The declarations extend the guidance until June 26, 2020, unless terminated sooner.