8/2/2010

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TALK TO THE EXPERTS…

And Get the Inside Scoop on

The S.A.F.E. Act

Sue Woodard Ginger Bell Theresa Ballard Ruth Faynor

Your Experts

Federal Compliance

Expert

:

YOU’VE GOT QUESTIONS…WE’VE GOT ANSWERS.(BUT IF YOU CAN’T HEAR US…DIAL THE NUMBER ON YOUR INVITATION EMAIL OR

DASHBOARD…WE’RE USING PHONE LINES, NOT MIC AND SPEAKERS.)

DROP DEAD DATE: January 1, 2011 Check the NMLS Website for State Deadlines

Everyone MUST:� Register with NMLS� Complete or Certify 20 Hours of PE� Submit Fingerprints� Background Check� Credit Report� Take the National and State Test � Pass with 75%

The Facts

The National S.A.F.E. Act Test

Our Mind sees in pictures

8/2/2010

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HUD FRB FTC

Think of the Federal Reserve as an Animal Reserve

Hot and COLD Zebra DAYS!Put Yourself in the Picture

At the RESERVEAt the RESERVE

Federal Reserve Board

1. H- Hot - H - Reg H –National Flood Insurance Act -(Flood rules)

2. H-Hot - HPA-Homeowners Protection Act (PMI)

3. C- Cold - C - Reg C -HMDA (Race Monitoring)

4. C-Cold – CRA (Reg BB) Community Reinvestment Act

5. Z -Zebra - Z - Reg Z (Truth in Lending)

6. D- Days which is Days - MDIA (Mtg. Disclosure Rules on Days)

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CREATE strong VISUALS

REG H – Flood

Visualization

REG C – HMDA

Remember

It is IMPORTANT to

Make a Strong Visual

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HOME OWNERSHIP AND EQUITY

PROTECTION ACT

Details

• Addresses certain deceptive and unfair practices in home equity lending.

• Amends the Truth in Lending Act (TILA) and

• Establishes requirements for certain loans with high rates and/or high fees.

• Rules for these loans are contained in Section 32 of Regulation Z, which implements the TILA,

– Loans also are called “Section 32 Mortgages.”

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WHAT LOANS ARE COVERED?

A loan is covered by the law if it meets the following tests:

� First-lien loan� APR exceeds by more than 8 percentage points the rate on a Treasury Security

of comparable maturity {APR > (Treasury + 8)}

� Second-lien� APR exceeds by more than 10 percentage points the rate on a Treasury

Security of comparable maturity {APR > (Treasury + 10)}OR

• Total fees and points payable by borrower at or before closing exceed the larger of – $579* or 8% of the total loan amount.

• *The $579 figure is for 2010. The fee for 2009 is $583. • Credit insurance premiums for insurance written in connection with the credit transaction are

counted as fees

� Rules primarily affect Refinance and Home Equity installment

� Rules do not cover loans to buy or build, Reverse Mortgages or Home Equity Lines of Credit (HELOC)

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HIGH PRICED MORTGAGE LOANS - “HPM”

REGULATION – SECTION 35 LOANS

The 2nd Stage of Reg Z changes

• July 14, 2008 - Federal Reserve (Board) adopted final “HOEPA Rule,”

• Amends HOEPA and Truth in Lending Act (TILA) Rules, Regulation Z.

– Forms a new category of loan that’s sandwiched between Prime loans and HOEPA (Section 32 – High Cost Loans)

– New Category called HPM (High Priced Mortgage)

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“HPM” REGULATION

SECTION 35 LOANS

• Effective October 1, 2009

– Except for certain escrow (impound) requirements.

– Types of loans affected: • Purchase • Refinance • Home Improvement

� HPM Loans - applicable principal dwellings that are:

– First liens - 1.5 percentage points above the “Prime Offer Rate”

– Second-lien loans - 3.5 percentage points over

� Top rate established by:

– Using adjusted prime offer rates from Primary Mortgage Market Survey® (PMMS) (to include points) http://www.freddiemac.com/pmms/

– Rates will be published at least weekly

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$199$199

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For more information call (800) 963-1900 or visit

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Get a clear understanding of the confusing "alphabet soup" of mortgage terms. The Mortgage

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For more information call (800) 963-1900 or visit

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