NMLS vs. TILA Definitions of “Loan Originator”

Article By: Ben Giumarra, Spillane Consulting Associates, Inc. Trying to do the right thing might make things worse here.  If the definition of "loan originator" is broader under TILA than under the SAFE Act (which it is), why do so many institutions have more NMLS-licensed employees than true originators (who are subjected to TILA qualification, compensation, and training requirements?) Short Answer Well, they shouldn't. If you have more people with NMLS licenses than who … [Read more...]

“Uber”-Like Mortgage Originators?

Article by: Ben Giumarra, Spillane Consulting Associates, Inc. So maybe a bit of a "clickbait" headline, but what's stopping your institution from having a mortgage originator who has a second job? What's stopping a mortgage lender from having part-time MLOs?  The appeal of working as an Uber (or Lyft) driver is that it can be a "side hustle" - a job you work in addition to your regular job for extra money. You can earn some extra money working whenever/wherever you decide. With the … [Read more...]

Corrected Disclosures Affecting HMDA LAR and Federal Reserve Comments on Finance Charge

Article by: Ben Giumarra, Spillane Consulting Associates, Inc. Special two-part series this week! First a quick note on HMDA and corrected disclosures. Second, some takeaways from a recent Federal Reserve publication on finance charges.    Part 1: HMDA with TRID Changes One consideration with the new HMDA rules will be going back and updating the LAR when corrected disclosures are provided. This is a bigger issue than years before for two reasons: (1) There is more data to … [Read more...]

TILA Slowing Down Day 1 Certainty Implementation?

Article By: Ben Giumarra, Spillane Consulting Associates, Inc. Regulations are often blamed for stifling innovation - how many new and unique loan products have we seen lately? You see similar hesitation on new internal processes. Is Day 1 Certainty destined for the same fate? I think No. Are you staying "up with" Day 1 Certainty changes? 9 out of 10 lenders are not. But the 10th lender will sound like a mad scientist when you ask them about it. It's an interesting knowledge gap right … [Read more...]

Focus on Counties, not Towns, to Avoid Redlining Allegations

Article by: Ben Giumarra, Spillane Associates, Inc. A significant shift in policy that you should be aware of if your institution is subject to Consumer Reinvestment Act requirements. Mortgage companies skip to the cartoon! How do you draw an Assessment Area? Various factors should shape your Assessment Area - but two in particular are being given greater importance: the existence of County lines and Low-to-Moderate Income geographies. Don't get caught off guard in your next CRA … [Read more...]

Underwriting to “Shadow Rent” in Compliance with Ability-to-Repay/QM Rules?

Article By: Ben Giumarra, Spillane Consulting Associates, Inc. Getting some attention because of Fannie Mae's HomeReady and other innovative programs, this an interesting question to review. "Shadow rent" is non-borrower household income that can be contributed to the monthly housing payments. Earning $60,000 per year, single mom Bristol has a monthly mortgage payment of $2,000, recurring debts of $400, and thus a debt-to-income ratio of 48%. Not good. But what if her elderly father lives … [Read more...]

4-Step Self Assessment for Fair Lending Pricing Problems

Article By:  Ben Giumarra, Spillane Consulting Group You probably wonder if your attention to fair lending pricing issues is overkill. Could you be using your time more wisely? Well I don't know because I don't know you, but I do have a general way to self-assess your risk here (or lack thereof).  Pricing discrimination has been the big fair lending topic for awhile - it's no longer as common to find discrimination in denials, it's more common to find "special" treatment for "special" … [Read more...]

Are No-Verification Loans Making a Comeback?

Article By: Ben Giumarra, Spillane Consulting Associates, Inc. You've probably heard the rumors or even seen advertisements. Mortgage loan with no income or asset verification! ("Just sign and drive.") Is there any truth to this? We keep seeing advertisements and hearing rumors about "my competitor" who is offering mortgages to customers with no income or asset verification. Could this really be? Is this a return to these dangerous loan products? Do we need to relax our underwriting … [Read more...]

Figuring out HELOCs: Late Charges, Prepayment Penalties, and More (Massachusetts-heavy)

Article By: Ben Giumarra, Spillane Consulting Associates, Inc. An area that's due for some clarity - HELOC lending pursuant to Federal and Massachusetts rules regarding late charges and prepayment penalties. I always expect HELOCs to be simple - they're exempt from many of the trickiest new regulations (ATR/QM, LO Comp, TRID, etc) - but time and again a HELOC-related issue seems to stop the presses at 501 John Mahar Highway. I think back to figuring out how to service "freeze-lock" lines … [Read more...]

Incorporate Massachusetts fair lending rules into ECOA disclosures?

Article by: Ben Giumarra, Spillane Consulting Associates Addressing some nuances in fair lending/ECOA rules. So I received this question from a friend the other day: I wanted to reach out to with a question regarding genetic information as a protected class in Massachusetts regarding ECOA purposes. Reading the law it appears "genetic information" should be noted as a protected class on our ECOA disclosures. Can you confirm whether or not we should have "genetic information" included on … [Read more...]