As yet another example of a mortgage conference eating into a weekend, leading attendees to travel on a Friday or Saturday, the Mortgage Bankers Association’s Regulatory Compliance Conference starts this Sunday. But the scheduling doesn’t detract from the important message: “Now more than ever, the regulatory environment calls for the best approaches and solutions to maintaining compliance at the highest level.” And despite the CFPB moving from “enforcement” to “education and guidance,” it is still a force with teeth, as are all the state organizations also setting forth their own rules and regulations. Compliance goes hand-in-hand with risk; ignore it at your own risk. More below.

Lender Products and Services

For lenders evaluating digital mortgage platforms who believe in empowering their loan officers with powerful technology to grow their referral business, delight their borrowers, and let their expertise shine throughout the experience, there is no better platform than Maxwell. Maxwell’s platform with powerful personalization features and integrations designed to make the loan officer the hero is having a big impact for lenders across the country, closing over $2.5B in volume every month. To learn more about Maxwell, request your personalized demo by visiting www.himaxwell.com.

Mortgage News Network has learned a lot from running a video news network for mortgage professionals. This Thursday, September 19, 2:00 PM ET / 11:00 AM PT, they’re going to share (on a 30-minute webinar) how to use video to tell your story with mortgage professionals. They’ll share some of their insights from their years running MNN and the results from the Inaugural Video Survey. In this webinar you’ll learn about the best formatting and platform to reach mortgage professionals and more insights they’ll share from the survey and their research. You can register here. 

Marketing success stems from a customer-first approach: who they are and what motivates them. Yet, many financial brands still struggle to understand the buying behaviors of today’s consumers and create content that resonates with them. So, what’s the best strategy to understand your audience and build meaningful connections? Watch the webinar replay with Total Expert and Data Propria to implement a customer-first strategy in your organization and create personas that drive revenue.

“I’m Todd Duncan, and I care about your future! Friday’s Headline: “This was the worst week for mortgage rates in 3 years – and it may be just the beginning…” Warren Buffet said, “You only find out who is swimming naked when the tide goes out.” Were you caught off guard? Uncertain about the market? This could be the start of your own death spiral. I don’t want to see that happen. Hedging means strategically using instruments to offset the risk of any adverse price movements. The best hedge you can have as a mortgage professional in today’s uncertain market are the skills and the plan that allow you to succeed no matter what! To optimize your business and prepare for the changing market, watch my Special Market Coaching Video, The Death Spiral of the Loan Officer! It's your hedge against the future. No Registration Required. Watch For FREE Now!”

In its latest white paper, Fiserv takes a closer look at the digital mortgage and how leading lenders are overcoming the blocks that are preventing the rest from reaching this goal. Three key issues that keep frustrating lenders are clunky system integrations, low borrower satisfaction and outdated processes. Unfortunately, if lenders just automate what they’re doing now these issues will not be addressed. So, how will lenders overcome these challenges? In its white paper, Fiserv takes a detailed look at what the perfect technology solution would have to include. Here’s a hint: it doesn’t look like a shiny new POS. Find out more by obtaining the new paper. Are you headed to the Digital Mortgage Conference next week? Meet with us to learn how you can get a true digital mortgage. Email mortgagedirectorsales@fiserv.com.

QC and Compliance

With the risk conference in full swing in Chicago this week, the issue of wire fraud and vendor management remains high on everyone’s list. Andrew Liput, CEO of Secure Insight, which helps lenders manage closing agent risk by offering access to a database of risk analytics said “It is refreshing to see so much time being devoted to this important issue. It was only a few years ago that title and closing fraud really began to take center stage at these conferences. Lenders today have a range of options to address the regulatory and reputation concerns they have with closing fraud, and we are pleased that our Closing Guard tool, which was the first in the industry to focus on vetting, rating, monitoring and reporting on closing agents, has helped pave the way to  significant industry changes. This year’s conference speakers will be offering much insight into the future of mortgage lender risk management and I am very excited about what they have to say on the subject.”

If the appraisal fees were not disclosed in the initial Loan Estimate pursuant to the requirements of TRID, but the loan is now locked, is it acceptable to include the appraisal fees in the Revised Loan Estimate when re-disclosing for the rate lock? There are two parts to this question (1) should the appraisal fees be included in the Revised Loan Estimate and (2) if so, can the disclosure of appraisal fees in the Revised Loan Estimate (rather than the non-disclosure in the original Loan Estimate) be used as the basis for determining whether the disclosures were made in “good faith?”

The answer to (1) is a simple, yes. If they weren’t disclosed in the original Loan Estimate, they need to be disclosed in the Revised Loan Estimate. The answer to the second part of the question is a little more complicated. Under TRID, mortgage lenders are held to a “good faith” standard in disclosing fees and charges on the Loan Estimate. The general rule is that “good faith” is measured by comparing what is disclosed in the original Loan Estimate with what the consumer actually pays at consummation. While it is necessary to include the originally omitted appraisal fees in the Revised Loan Estimate issued in connection with a rate lock, those disclosures cannot be used to measure “good faith.” Instead, unless one of the other five grounds for a Revised Loan Estimate can be found to apply, the original Loan Estimate must be used. And, since the original Loan Estimate did not disclose any appraisal fees, those fees cannot be imposed on the consumer, or if they are, they will have to be refunded within 60 days of consummation pursuant to Section 1026.19(f)(v).

Does a consumer reporting agency have any obligations regarding fraud and active duty alerts? Also, as a lender, what procedures do we have to follow if the credit bureau notifies us of existing fraud or an active duty alert?

First, the FCRA imposes various obligations on consumer reporting agencies, including the requirement to notify prospective users of a consumer report on a consumer who has placed an alert in his or her file that the consumer does not authorize the establishment of a new credit plan or extension of credit (other than under an existing open-end credit plan), unless the user follows certain procedures. When a consumer report reflects an existing initial fraud alert or active duty alert, to establish a new credit plan or an extension of credit (other than under an open-end plan) in the name of the consumer, or to grant any increase in the credit limit on any existing credit account, the prospective user must contact the consumer in person or use the contact method designated by the consumer to confirm that the application for a new credit plan or increase in credit limit is not the result of identity theft. [15 USC § 1681c-1(h)(2)].

What are the areas of risk a mortgage lender could face as a result of its use of social media? There are several areas, including the risk of harm to consumers, as well as various compliance, legal, operational, and reputation risks. Generally, compliance and legal risks stem from the potential for violations of, or nonconformance with, laws, rules, regulations, prescribed practices, internal policies, and procedures, or ethical standards. Training for employees should involve making all employees aware that failure to comply with the financial institution’s social media policies and guidelines can expose it to enforcement actions and perhaps civil lawsuits. Companies should review the Equal Credit Opportunity Act, through Regulation B, prohibiting creditors from making any statements that would discourage on a reasonable person from pursuing an application, the Fair Housing Act (FHA), prohibiting discrimination based on race, color, national origin, religion, sex, familial status, or handicap, TILA Regulation Z’s in regards to advertising provisions, Section 8 of the Real Estate Settlement Procedures Act (RESPA) prohibiting certain activities like fees and kickbacks, Fair Debt Collection Practices Act restricting how debt collectors may collect debts, and UDAAP through the Federal Trade Commission (FTC) Act [15 USC 45, Section 5] prohibiting “unfair or deceptive acts or practices in or affecting commerce.”

Capital Markets

U.S. Treasuries began the week with solid price gains, with mortgages tagging along, including the 10-year closing yielding 1.84 percent. In a flight to less risk, Treasuries spiked after a weekend attack on two oil refining facilities in Saudi Arabia heightened geopolitical tensions. The flight to quality was helped since the attack impacted roughly 5 percent of global oil output, though those headlines overshadowed the release of another set of weak growth data from China. Saudi Arabia replacing the lost capacity will not be an issue but there are concerns that a response may take place, as U.S. officials contend that the strike was launched from Iran while Saudi officials have yet to make that determination. The weekend developments prompted a nearly 15 percent surge in the price of oil, the largest one day jump since December 2008.

This week is expected to feature a 25-bps rate cut tomorrow, but heads were turned at reports from Bloomberg noting that the overnight repo rate increased by the largest amount since December, surging to 3.68 percent in the middle of the month, which points to increasing stress in funding markets. On a related note, the effective fed funds rate increased six basis points to 2.20 percent.

In international news, Reuters reported that China was behind a cyberattack on Australia's parliament and main political parties prior to an election in May, but Australia's government did not make a public accusation due to a fear that the country's trade relationship with China would be impacted. President Trump traveled to Texas with India's Prime Minister Modi, and follows that with a trip to Ohio with Australia's Prime Minister, Scott Morrison. The White House said that the visits are meant to "underscore the important partnerships" between the nations. In Europe, British Prime Minister Johnson met with European Commission President Juncker to lobby for changes to the Brexit deal with apparently little progress.

Today’s U.S. economic calendar gets underway shortly with a trio of releases: Redbook same-store sales for the week ending September 14, August Industrial Production and Capacity Utilization, and the NAHB Housing Market Index for September. And the first day of the FOMC meeting gets under way in Washington, D.C. We begin the day with Agency MBS prices better by .125-.250 and the 10-year yielding 1.82%.

Jobs

The VA is searching for a Supervisory Loan Specialist (Assistant Director for Loan Policy and Valuation). Here is the job description and salary range – some decent coin.

“Looking for more growth in your career? Join the Motto Mortgage network and you’ll have full access to best-of-breed technology. We’ve teamed up with two of the industry’s most respected platforms: Encompass® and Total Expert®. Plus, you get to use SmartFees® for each transaction. And it’s all on us! What does it all mean? You’ll have every tech tool you need to acquire more leads, nurture your clients, market your services, and execute your pipeline with efficiency and accuracy. Explore this exciting growth opportunity today; currently recruiting in AZ, FL, GA, NV, TX.”

Cornerstone Home Lending, Inc. welcomes top Regional Production Manager Tim Peterson to its continuously growing work-family. Based in Salt Lake City, Utah, Tim has led a distinguished career as a top producer, high-volume branch manager, COO, and regional manager overseeing $2B in production and brings even more leadership excellence to Cornerstone’s team. Tim’s expertise will continue the expansion of Cornerstone’s Mountain West region and Nest Home Lending, Cornerstone’s thriving joint venture with Utah and Colorado homebuilder Oakwood Homes. “I was drawn to Cornerstone because the entire company is dedicated to creating better mortgage experiences for LOs and clients,” says Tim. “And ultimately, that’s the key foundation to building more business.” “Backed by the highest support team to loan officer ratios in the industry and unmatched mortgage technology, CORNERTONE LOs consistently close loans on time and fund more loans per LO. Connect with Tim to find out why Cornerstone is the #1 mortgage lender on Glassdoor to congratulate him on joining the top mortgage team in the country!”