2017 Industry Issues

Industry Thoughts from the  2017 MMBA Board of Directors

During the past few meetings of the MMBA Board of Directors, there has been much discussion focused around current mortgage industry issues; the implementation of new regulations and technologies; and what we as an Association can do to support our members.    
Below is a compilation of current industry topics and thoughts from the MMBA Board. We welcome your thoughts and suggestions on what we can provide to our members. 
The MMBA strives to be Your Resource, Your Voice and Your Connection!
Mounzer Aylouche, MMBA 2017 Chair   

Day 1 Certainty (Fannie Mae) and Loan Advisor Suite (Freddie Mac)

will provide rep and warrant relief from day 1 if technology solutions are utilized such as third party employment, income, asset verification and collateral verification through automated underwriting. While all this seems great on the surface, lenders need to make sure they  understand the benefits and the risks such as replying on technology in place of borrower-provided documentation. In addition, members also should familiarize themselves with the Mortgage Insurance vendors and what Rescission relief they may or not be entitled to. 

The MMBA will be hosting a Technology program with Fannie Mae and Freddie Mac, vendors and industry peers on June 13th (click here for details) and will address issues as part of the program.  

Legalization of Marijuana

Now that marijuana is legal in Massachusetts along with 25 other states, lenders may begin seeing income connected to legalized marijuana activities or a property with a grow farm.  Lenders must keep in mind that regardless of  State or Municipal Laws, Federal Laws still considers Marijuana illegal. All Lenders must comply with the Bank Secrecy Act and Anti-Money Laundering Laws and must complete a Suspicious Activity Report (SAR) with the Financial Crimes Enforcement Network (FinCEN).  Members should carefully review any contracts or Master Policies that have with investors and vendors to ensure you are complying with all Federal, State, and Municipal laws and regulations.  Member's should also review internal policies and procedures for employees who may engage in a legal act within a State that is considered illegal Federally.

Impact of Executive Orders From President Trump

The change in the Oval Office and the control of both the Senate and House of Representatives by the Republicans signal potential changes to the regulatory landscape. Recent initiatives include establishing Core Principles for financial regulation including "make regulation efficient, effective, and appropriately tailored" and "restore public accountability with Federal financial agencies and rationalize the financial regulatory framework."  The MMBA plans to submit a document to the CFPB (a member of the FSOC) as well as to our elected officials within the 120 day deadline detailing recommended changes to some of the Final Mortgage Lending Rules which align with the spirit of the presidential order while still protecting consumers.  

This week President Trump marked his first 100 days in office by releasing the outlines of a comprehensive tax reform plan that would slash corporate and individual tax rates while closing loopholes - but leaving the mortgage interest deduction intact.

There is also a belief that legislators will be tackling GSE Reform this year. The MMBA encourages our members to get involved on a national effort and join the Mortgage Action Alliance and/or join us in Washington DC on June 20 & 21st! 

CFPB's Final Servicing Rule

The CFPB's Final Servicing Rule is confusing: The CFPB issued the Final Servicing Rule changes in 2016 and it is critical that all members are aware that they have expressly prohibited early adoption.  This means the burden of what is new and what was a clarification of a previously established rule is placed on the servicer to decide when and how they will ensure compliance.  Over 50 servicers attended an education program on March 7th to help our members understand and comply with the new rule as well as other regulations impacting servicing of mortgage loans.

HUD Mortgage Letter 2016-18 and Vendor Management

HUD Mortgagee Letter 2016-18 allows Lenders to utilize contract processing, legal functions, quality control, and human resources - While this was seen as a major benefit to many lenders looking to outsource certain parts of the lending process, at a time when cyber-security is on the forefront of every CEO and IT managers mind, Lenders must consider the additional due diligence required when hiring or utilizing any third party to perform services on its behalf.  Verifying anyone handling your originations is still the responsibility of the FHA Lender and you must still retain direct supervision and control.  Many of the providers of these outsources services do not have contracts that meet the requirements set forth by HUD.  With the Department of Justice coming down on lenders for false claims, members will want to ensure they can provide documentation of the due diligence performed on anyone providing services on their behalf.

On June 14th members of the MMBA will be able to attend a Vendor Management webinar  to learn about the increasing scrutiny by regulators and application of statutory and regulatory Vendor Management requirements.

HMDA Data Expansion and the New Frontier

Implementation for the majority of the new data collection and reporting requirements start on January 1, 2018.  There are vast changes to Regulation C including covered institutions, types of transactions being reported, reportable information and collection of borrower information. 
The MMBA will continue to provide updates and education throughout 2017. Starting in May there will be a series of HMDA Implementation programs that will include webinars, conference calls and in-person programs with industry experts, LOS providers and regulators. The CFPB will joining us for our September 7th which will include mapping, technical coding, interpretation and operational challenges. HMDA policies, procedures and employee training will be greatly impacted in 2017!

Fair Lending Policies and Procedures

 As a result of HMDA data expansion, this will have a direct impact on your Fair Lending policies and procedures. Members are encouraged to review internal policies and procedures.

Uniform Closing Data Set (UCD)

This is an ongoing effort by Fannie Mae and Freddie Mac to provide a common industry dataset to support the CFPB's Closing Disclosure. Mandate for delivering UCD files to the GSE's is September 25th. Members should be working with their LOS provider for direct integration for submitting files to Fannie Mae and Freddie Mac. 

The MMBA will be hosting a Technology program with Fannie Mae and Freddie Mac, vendors and industry peers on June 13th (click here for details) and will address issues as part of the program.  

Your Resource. Your Voice. Your Connection