The 3 Wise Men: News, Seminars & Forms to Help Mortgage Brokers Make More Money

Action by Governor Brown Threatens Extinction of Mortgage Brokers

In his most recent Budget Proposal, Governor Brown has included plans to consolidate all businesses in the financial industry under one head. He proposes the elimination of the Department of Real Estate and the Office of Real Estate Appraisers and placing jurisdiction of these licensees under the Department of Consumer Affairs. At the same time the Department of Corporations and the Department of Financial Institutions will be merged into one new entity called the Department of Business Oversight. It seems that the Governor wants the consumer groups to limit the operations of the mortgage brokers, and the regulators of the big banks to regulate all the lenders...

I: The Appraiser Qualifications Board (AQB) has issued the following Exposure Draft: Fifth Exposure Draft of Proposed Revisions to the Real Property Appraiser Qualification Criteria Link: https://appraisalfoundation.sharefile.com/d/s37bad6cf5694643b Written comments requested by December 5, 2011 Send Comments to AQBComments@appraisalfoundation.org II: The Appraisal Practices Board (APB) has issued the following Exposure Draft: First Exposure Draft: Residential Appraising in a Declining Market Link: https://appraisalfoundation.sharefile.com/d/sbdb218d49bc48c6a Written comments requested by December 5, 2011 Send Comments to APBcomments@appraisalfoundation.org

The Appraisal Foundation has submitted a draft for comment by November 14: Communication and Reporting in the Uniform Standards of Professional Appraisal Practice. The 3 Wise Men invite you to post your comments here so that we may engage in a discussion with you here. We will also collect and submit your thoughts to TAF along with our commentary. Link to the document under consideration: Communication and Reporting Discussion Draft Email address for sending comments directly: ASBComments@appraisalfoundation.org Details (from The Appraisal Foundation): Those who have followed the work of the Appraisal Standards Board (ASB) over the last several years are aware of the Board’s...

Legislative UPDATE: Summaries of Bills Chaptered By the California Secretary of State

The source for the following summaries is the Legislative Digest for each bill. Click the bill titles to download the full text PDFs. As of today, the following measures have been Chaptered: SB 4 (Calderon and Vargas) Mortgages. Requires the notice of sale, given pursuant to a deed of trust or mortgage secured by real property containing from 1 to 4 single-family residences, contain language notifying potential bidders of specified risks involved in bidding on property at a trustee’s sale, and a notice to the property owner informing the owner about how to obtain information regarding any postponement of the sale. Requires a good faith effort to...

By Guy Puccio Two measures regarding independent contractor relationships were just enacted into law by the California Legislature. These legislative measures signed by Governor Brown are AB 1396 (Committee on Labor and Employment) and SB 459 (Corbett). Effective January 1, 2013, AB 1396 requires whenever an employer enters into a contract of employment for services to be rendered within this state and the contemplated method of payment involves commissions (as defined), the contract is to be in writing and is to include the method by which the commissions are to be computed and paid. This measure amends Section 2751 and repeals 2752 of the Labor Code. The...

By Guy Puccio Business and Professions Code Section 10240(c) purportedly extends an exemption to mortgage brokers when arranging “federally regulated residential mortgage loans.” However, this exemption is inapplicable to most loan transactions conducted by mortgage brokers registered with the NMLS as an LO (MLB/MLO) and even when arranging transactions where the loan proceeds are used for personal, family, or household purposes. The phrase “federally regulated” is substantially narrower than “federally related.” Under current law, “federally regulated” loan transactions are loans made by nationally chartered or licensed banks, savings and loans, savings banks, thrifts, and credit unions; or if state chartered or licensed, those financial institutions that have...

I. Code Citations a. Business and Professions Code Citations – 10166.01 – 10166.17 (Implementation of the SAFE Act under the Real Estate Law) b. Civil Code Citations – 1090.5 (Requirements for Hiring/Using/Terminating Real Estate Appraisers) c. Financial Code Citations – 4970 et seq. and 4995 et seq. (California Requirements for “High Cost” and “Higher Cost” or “Higher Priced” Residential Mortgage Loans) II. “Dodd-Frank” Act a. HR 2509 (Federal Legislation Sponsored by NAMP/CAMP to Amend Dodd-Frank Regarding LO Compensation) b. Summary, prepared by S. Guy Puccio and Herman Thordsen, Esquire (A Summary of Significant Issues of This Act that Affect Residential Mortgage Loans and Mortgage Brokers) III. Federal...

For detailed information about the upcoming Make More Money Now workshop with 3 Wise Men Q & A, click here. Bring your business partner(s) to our next workshop and receive a volume discount! Full Day attendance fee for one participant: $295 Full Day, second participant from the same firm or company: $195 Full Day, third, fourth, fifth (etc.) additional participants from the same firm or company: $140 each To register, select the appropriate fee (and box lunch selection) in the drop down menu on the Paypal button in the sidebar. If you have any questions about registration or payment, or if you need an alternate form of...

These bills are complex and each covers more than more than one subject—an apparent new trend in Federal and State legislation. We are not addressing herein the list of measures that remain in committee or on the floor, as some of them may die and others may become two-year bills. The source for the following summaries is the Legislative Digest for each bill. Click the bill titles to download the full text PDFs. The following measures have been Enrolled, awaiting the Governor’s action: SB 6 (Calderon and Vargas) Real Estate: appraisal and valuation. Prohibits a licensee from knowingly or intentionally misrepresenting the value of real property. Prohibits...

By S. Guy Puccio The agency relationships intended among principals and real estate and mortgage brokers are material facts. Regardless of whether it is a dual agency, a bifurcated agency, or an agency relationship with one party leaving the other unrepresented, it is a material fact to be disclosed at the outset or when the relationship becomes more than casual. See, Business and Professions Code Sections 10176(a) and (d), Civil Code Sections 2079.13 et seq., 2295 et seq., and 2923.1 and Huijers v. DeMarrais (1992) 11 Cal.App.4th 676. The obligation to disclose agency relationships in commercial transactions exists notwithstanding the typical interpretation that Civil Code Section 2079.13...

This article (click here to download PDF) discusses the ongoing debate about the CFPB. The general objectives are reasonable but so is adequate congressional oversight and public transparency. It would be better to remove the CFPB from the Federal Reserve Board and place it within HUD or the FTC. The future of the MLDS/GFE rests upon the outcome of the pending regulations by the CFPB, as will the ultimate interpretations that likely affect broker compensation, QRMs, the 5% retention rule, etc. The truth of the matter is regulators were in place prior to the CFPB to prevent the crises in the mortgage industry and in the housing...

News Commentary:”‘Qualified Residential Mortgage’ on the Hot Seat,” Mortgage News Daily, July 29, 2011. Per this article (click here to download PDF) the subject of QRMs and the 5% could prove to be a major issue for “hard money” mortgage brokers and hedge funds that are less than $1 billion in assets under management. It is not clear where the cutoff will be in volume threshold requiring the application of the 5% retention rule. Unless the threshold is at least $100 million or more, this could prove to be the demise of many small to moderate sized “hard money” mortgage brokers. The surviving industry will be left...

Make More Money Now – Extended Workshop Featuring 3 Wise Men Q&A San Francisco/Oakland Bay Area October 22, 2011 In today’s difficult legislative and economic environment, wouldn’t you like to acquire new and creative ways to do business that will increase your bottom line? How about a personalized Q&A session with three of the most experienced and knowledgeable veterans of the mortgage lending industry whose goal is to help you not only understand and comply with new laws but also increase your income as a result of this understanding? Our next Make More Money Now workshop offers two information-packed sessions full of tools and advice to help...

Today we point you to this article in MarketWatch: “One Year On: Most Dodd-Frank changes still to come,” MarketWatch, July 21, 2011. (Click link to download PDF.) The 3 Wise Men disagree with this piece on two main points: 1. Regarding community and regional banks: Mr. Chris Cole’s comments generally make sense with the exception of the enormous regulatory requirements being imposed on the banking industry. The leaders of community banks with whom we have personally spoken are concerned their resources are inadequate to effectively function under the anticipated massive overkill of regulations coming out of Dodd-Frank, some of which have already been promulgated. It is our...

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Action by Governor Brown Threatens Extinction of Mortgage Brokers

Appraisal Foundation Boards Seek Your Comments on Draft Revisions by December 5

Appraisal Foundation Draft: Submitted for Comment By November 14

Legislative UPDATE: Summaries of Bills Chaptered By the California Secretary of State

Independent Contractor Relationships Are Now More Dangerous to Establish or Maintain

Must Mortgage Brokers Complete and Deliver Mortgage Loan Disclosure Statements in Residential Mortgage Loan Transactions?

Contents of CD that Will Be Distributed At Our Upcoming Workshop

Volume Discount Available for “Make More Money Now” Workshop on October 22nd

Summaries of California Mortgage Industry Bills Currently Enrolled or Signed

Agency Relationships Are Material Facts

“New Consumer Protection Agency Faces Opposition,” NPR, July 21, 2011

QRM on the Hot Seat

Next Make More Money Now Workshop plus Q & A: October 22

Dodd-Frank Still Being Ironed Out

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