Category: Compliance

Compliance – Lock Policy: As a correspondent lender, do we need to have a consistent pricing policy for lock extensions, or can this be flexible based on the investors we use?

Answer: This is an issue that most lenders must deal with as they progress from broker to correspondent.  As a correspondent, you are technically the lender, whereas as a broker, your investor was technically the lender.  The lender must demonstrate fair pricing policy to reduce the risk of disparate treatment.  This is why some adjustments […]

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Freddie Mac updated their “Income Received After Note Date” guidelines to allow lenders to use a raise or new job income received after closing to qualify the borrower. Comment below and I’ll send you a chart!

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Compliance – Automated Appraiser Assignment: If we have an automated appraiser assignment (on rotation) through our LOS, can an LO place the order for an appraisal?

Answer: An LO can never ‘order’ the appraisal, even if the system is automated and the LO has no contact with the appraiser.  This breaks down to a technicality and ultimately it would be the responsibility of the lender to make sure appraisal independence requirements are being met.  What makes it technical is the concept […]

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Compliance – HMDA: We don’t presently collect GMI (Government Monitoring Information) for HELOC or Closed End Equity Loan applications. Will this change January 1, 2018?

Answer: With the new HMDA rules that go into effect January 1, 2018, HELOCs and Closed End Equity Loans will move from being optional when reporting data, to being required when reporting HMDA. This means you will need to gather all of the GMI information on these types of loans as well. Reference: Here is […]

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Fair Lending – Public Servant Discount: I’d like to offer a discount of our lender fees for school district employees, and other public servants. Will this violate Fair Lending Rules?

Answer: These types of programs used to be overlooked by the examiners, but the CFPB doesn’t quite have that opinion in their interpretation of ECOA. The issue is that two consumers could walk into your office with similar financial profiles. A school district employee could technically get a lower rate or lower cost mortgage than […]

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