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

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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...

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QRM on the Hot Seat

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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...

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

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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...

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Dodd-Frank Still Being Ironed Out

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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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Short-Sale Law Clarification

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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.

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Dodd-Frank: Your Questions Answered

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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...

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Q & A: New NMLS Registration Rules

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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...

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

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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;...

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GET THIS FORM: New Appraisal Rules Cover ALL Property Types

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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....

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Regulatory Overload Requires Knowledgeable Consultants Now More than Ever

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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...

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Give Your Feedback: Dodd-Frank Combined RESPA-TILA Disclosure

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This week, the Consumer Financial Protection Bureau (CFPB) released the first prototypes of a combined RESPA-TILA disclosure. Consumers and industry members are offered two different feedback paths for providing your input. Click this link to provide your comments–select the “switch to the industry tool” option at the bottom of the page: http://www.consumerfinance.gov/knowbeforeyouowe/ Thank you to our colleagues at Franzén & Salzano for the notification regarding this call-to-action.

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Set Reasonable Goals, Stick to the Budget and Keep the Napkin

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By Scott J. Corwin Eighteen years ago I passed the bar. Before I was even admitted, I made a decision that I wanted to work for myself. I had no clients, no money and a mountain of debt from law school. I decided to hang out my own shingle seven days after I was admitted. I would never have predicted that my practice would have grown into what it is today. Nor would I have predicted that I would have as fulfilling a professional life as I do today. The path to getting from there to here has been both challenging and rewarding. And the single most...

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Mortgage Brokers: Make More Money Now

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Are you feeling stuck competing for the same commercial loans everybody else is trying to find? Do the new State and Federal Laws affecting all mortgages (even non-owner-occupied business-purposed and commercial mortgages) have you hamstrung? Does the combination of stressors have you considering shutting down your business? Sign up now to attend our next workshop! The 3 Wisemen presents MAKE MORE MONEY NOW How to protect your business and earn more money in this tough economy Access new creative ways to do business AND key  information that will help you ensure you don’t run afoul of all the new laws. Get the answers, advice, approaches and procedures...

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Investors Move in on Real Estate Opportunities

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This article by N. Mitchell Feinstein, posted in Investor Uprising, discusses the upsides and downfalls to investing in the current real estate market. Click through to read the post–and then click around to view more. We recommend Investor Uprising as a good source of news on a variety of markets. The past has little to do with the future, and those who rely on historical data to predict market movements are often wrong. Take real estate, one of the fundamental drivers of the economy. When the real estate market collapsed, it put the whole economy in freefall. And even though real estate has historically been a catalyst...

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