Although always important, it seems compliance has become the top thing on everyone’s mind and the entire industry buzzing about the pros and cons of the various compliance requirements. Whether you agree with the requirements or not, RESPA has surely thrown a kink into everyone’s daily lives. Simply understanding what the requirements are is challenging and confusing and then comes the loaded question of how to address them.
My message today is one of encouragement – Calyx® is 2010 compliant. Point® or PointCentral™ users planning on using the upcoming 7.2 version can “check off” the litany of compliance requirements and feel confident going into the New Year.
√ 2010 GFE
√ New Transmittal Summary (1008)
√ New Loan Application (1003)
√ TILA and Section 35 (or HPLA)
I know this is going to get a bit long, but listed below are some details about each of the above compliance requirements that may help boost your confidence.
S.A.F.E – The Secure and Fair Enforcement Mortgage Licensing Act (S.A.F.E.) required the Loan Originator and their company name and NMLSR number be printed on the 1003. The FHFA implemented the SAFE Act and required Fannie and Freddie to collect this information. Fannie updated the 1003 to include the required fields and required the data to be included in the electronic loan file. However, Fannie has delayed the required use date of the updated 1003 until July 1, 2010 and said either may be used. The requirement to include the data was also delayed until the same time next year. Because many of our users operate in multiple states, Calyx has provided a single solution that meets the national as well as all state standards. Point 7.1, released August 2009, gave the ability to manage state license and NMLSR information for all required parties. License information printing is available for almost every document in Point, including custom documents and Point users can control which information gets printed.
2010 GFE – As of January 1, 2010 Loan originators will be required to provide a new standardized GFE and final settlement statement of the loan terms and costs of obtaining a home mortgage. In addition to the new GFE, the revised RESPA Rules require mortgage companies to provide a list of service providers, on a separate form, at the same time the GFE is issued. The service provider must be identified, along with the service they provide and the fee they charge for their service. Point 7.1 provided the 2010 GFE form and version 7.2 gives you the Providers List. The 2010 GFE is available for export and import by vendors within the Calyx Network (Service Providers integrated in Point). For the users interested in training on how to accurately and efficiently use the new form, Calyx has an online training class available. Hundreds have taken advantage of this class with great results.
Transmittal Summary (1008) – The new form is included in Pont 7.2 and also mandated for use beginning January 1 due to new project classification codes required by Fannie Mae.
Loan Application (1003) – Even though Fannie Mae announced a delay in the required use date for the new 1003, Point 7.2 includes the Updated the Loan Application, which is now mandatory for all loans opened on or after July 1, 2010. The update form includes Originator NMLS and Company NMLS on page 4 of the Loan Application (1003), supporting the requirements of the S.A.F.E. Act.
TILA and Section 35 – A new class of mortgage loans, called Higher Priced Mortgage Loans (HPML) or Section 35 loans, was introduced implementing additional HMDA reporting requirements and restrictions on loan features if the loan is found to be a HPML. In compliance with the new TILA guidelines and HPML, new fields were added to the Point 7.2 TIL screen giving you visibility, tracking and reporting capabilities. This allows you to document what the APOR is and the date you checked to make your determination if the loan is an HPML.
MDIA – Requirements of The Mortgage Disclosure Improvement Act:
- Originators can’t charge or collect fees from a Borrower, except for the credit report, until after they’ve received their disclosures.
- Once the Borrower receives the disclosures, they must have time to review them before they can be charged (if sent by mail, count mailing day as day 0 and wait three days; if sent by overnight delivery, charge the day after confirmed receipt).
- Re-disclosure is required when APR and/or Finance Charge changes occur.
- The Loan can’t close in < 7 days from time initial disclosures sent.
- If re-disclosures are sent, the loan can’t close until at least 3 days after they’re received, “time-clock” count the same as above.
MDIA is a process-based compliance requirement. Business owners will want to stipulate how their preferred practices will comply with the requirement. While Calyx doesn’t dictate how you run your business with hard-coded technology, we give you the flexibility to specify how the software will help define what your business process will be (rather than have the software tell you what your business process should be). You choose your processes and work flow based on the rules you implement in PointCentral 7.2.
Point and PointCentral 7.2 will be shipping to customers with current subscriptions on November 18, 2009. If you need to renew your subscription to ensure you receive 7.2 as quickly as possible, please call us at 800-362-2599.