Loan Originator Compensation Closed-end loan secured by Makes some changes to loan originator Standard TILA liability Identify who gets compensation for consumer’s dwelling compensation structures mortgage loans and what are current 78 Fed. Reg. (2/15/13) TILA liability expressly applies to loan compensation structures Effective Date: January 10, 2014 Applies to (i) individuals who are Imposes obligations on bank originators even though they are not employees of lenders or brokers employers of loan originators to however, there is a maximum Consider if compensation comes from any “creditors”, and (ii) entities that act as brokers consider employee liability for loan originators of 3 times the affiliates “credentials” total amount of the originator’s Requires NMLS ID information on Get human resources involved with new compensation plus costs and attorney fees credit applications, note, and deed of and loan originator “credentialing” trust statute of limitations for private employee training actions tuned” for regulations restricting “Stay loan steering by mortgage loan originators Mortgage Servicing RESPA Applies to RESPA-defined Must establish certain specific written RESPA liability for servicing errors is Consider if TILA servicer” exception – General Servicing Policies, Early related mortgage policies and procedures actual damages, plus any additional applies (if not, get help immediately) “federally Intervention Requirements, loans” except not HELOCs damages the court allows not to exceed Regarding delinquent borrower, must Continuity of Contact, Loss $2,000, plus costs and attorney fees for any Exclusions: reverse mortgage; make live contact quickly, followed by Mitigation Procedures successful action Even if servicer” exception applies, “small servicing 5,000 or fewer loans all written contact soon after, and cannot start any foreclosure activities – 78 Fed. Reg. 10696 (2/14/13) of which are owned by the establish continuity of contact which I believe includes sending Effective Date: January 10, 2014 servicer or were originally made Must have a specific loss mitigation Maryland’s Notice of Intent to Foreclose – by the servicer process and cannot start any until borrower is at least 120 days foreclosure activities unless borrower delinquent is at least 120 days delinquent (note: the 120 delay applies to “small servicers”)
Loan Originator Compensation 78 Fed. Reg. (2/15/13) Effective Date: January 10, 2014 Closed-end loan secured by consumer’s dwelling Applies to (i) individuals who are employees of lenders or brokers and (ii) entities that act as brokers Makes some changes to loan originator compensation structures Imposes obligations on bank employers of loan originators to consider employee “credentials” Requires NMLS ID information on credit applications, note, and deed of trust Standard TILA liability TILA liability expressly applies to loan originators even though they are not “creditors”, however, there is a maximum liability for loan originators of 3 times the total amount of the originator’s compensation plus costs and attorney fees statute of limitations for private actions Identify who gets compensation for mortgage loans and what are current compensation structures Consider if compensation comes from any affiliates Get human resources involved with new “credentialing” and loan originator employee training “Stay tuned” for regulations restricting loan steering by mortgage loan originators Mortgage Servicing – RESPA General Servicing Policies, Early Intervention Requirements, Continuity of Contact, Loss Mitigation Procedures 78 Fed. Reg. 10696 (2/14/13) Effective Date: January 10, 2014 Applies to RESPA-defined “federally related mortgage loans” except not HELOCs Exclusions: reverse mortgage; servicing 5,000 or fewer loans all of which are owned by the servicer or were originally made by the servicer Must establish certain specific written policies and procedures Regarding delinquent borrower, must make live contact quickly, followed by written contact soon after, and establish continuity of contact Must have a specific loss mitigation process and cannot start any foreclosure activities unless borrower is at least 120 days delinquent (note: the 120 delay applies to “small servicers”) RESPA liability for servicing errors is actual damages, plus any additional damages the court allows not to exceed $2,000, plus costs and attorney fees for any successful action Consider if TILA servicer” exception applies (if not, get help immediately) Even if “small servicer” exception applies, cannot start any foreclosure activities – which I believe includes sending Maryland’s Notice of Intent to Foreclose – until borrower is at least 120 days delinquent
DoddFrankMortgageRules.docx