Contents of CD that Will Be Distributed At Our Upcoming Workshop


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...

Read more »

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


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...

Read more »

Summaries of California Mortgage Industry Bills Currently Enrolled or Signed

California Capitol Building

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...

Read more »

Agency Relationships Are Material Facts


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...

Read more »

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


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...

Read more »

QRM on the Hot Seat


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...

Read more »

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


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...

Read more »

Dodd-Frank Still Being Ironed Out


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...

Read more »

Short-Sale Law Clarification


The 3 Wise Men recommend this succinct article by Neil J. Rubenstein of Buchalter Nemer about the new short-sale law and its effect on delinquency judgments and guarantors. (Click the link to download the full article PDF.) Please note: Under the act as written the lender approving the short sale must not receive a fee for approving the short sale.

Read more »

Dodd-Frank: Your Questions Answered


Q: Is an escrow fee a prohibited payment to loan originators (MLB/MLO) in connection with a consumer credit transaction secured by a dwelling? A: It is our opinion, the phrase “…consumer credit transaction secured by a dwelling …” means a federally related residential mortgage loan transaction, i.e., a loan secured by 1 to 4 residential units, whether the principal residence of the borrower; whether for the purpose of purchasing, refinancing, or further encumbering the security property; and when the proceeds of the loan are used for personal, family, or household purposes, therefore the limitations of Dodd-Frank apply. Q: What if the MLB/MLO requires the use of a...

Read more »

Q & A: New NMLS Registration Rules


Q: I am a broker and I just received my NMLS. Do I have to accrue the education credits before the end of 2011? A: Yes. It is our understanding that you will need eight (8) units to apply for the renewal of your NMLS registration effective January 1, 2012. The prerequisites required to obtain the initial NMLS registration expire at the end of the first year. Q: On the report for NMLS, do non-NMLS loans count? A: Yes. The annual report that is required to be filed with the DRE covers everything the mortgage broker does. The report may be consolidated with the threshold report required pursuant...

Read more »

ANALYSIS & ADVICE: How the New Federal Law Severly Restricting Payments of Referring Brokers Affects YOU


New federal law requires the registration of any person acting in the capacity of an MLO broker when arranging a loan for personal, family, or household purposes secured by a one-to-four-unit residential dwelling; and also severely restricts the payments of compensation, including commissions. In a simple explanation, the law allows compensation to be paid to only one MLO in any federally related residential mortgage loan transaction. Example: In the old world, before NMLS and additional recent amendments to applicable federal law, if a real estate broker got a phone call from a fellow broker to refer a loan transaction the brokers could agree to divide the commission;...

Read more »

GET THIS FORM: New Appraisal Rules Cover ALL Property Types


At the most recent seminar presented by The 3 Wise Men, held at the offices of Applied Business Software in Long Beach, Guy Puccio presented a much needed explanation of the new rules implemented by Federal Interagency Appraisal and Evaluation Guidelines Promulgated December 10, 2010. Guy explained in detail the effect of these new guidelines and the new requirements that these rules place on brokers making and arranging loans secured by ANY real property.  He pointed out that failure to follow these new rules could open the broker to liability from both the borrower or the lender should any problem with the loan develop in the future....

Read more »

Regulatory Overload Requires Knowledgeable Consultants Now More than Ever


By Guy Puccio The greatest recession ever experienced has facilitated an overwhelming amount of new statues and regulations. These new rules are promoted by those who believe expanding federal government control is the solution to prevent a future economic crisis. Much of this regulatory overload affects the financial services industry. For example, the “Dodd-Frank Act” is approximately 2000 pages of legislation—including trailer bills—with an additional 6000 pages expected in implementing rules and regulations. If you run a small-to-moderate size business, do you have the tools or the time to absorb and apply this sea change without the assistance of knowledgeable consultants? Consider the following: The Board of...

Read more »