Key MBA Actions
FHFA Announces Revisions to MI Master Policy Requirements
Last week, FHFA announced what it has termed “the first major overhaul of mortgage insurance master policy requirements in many years.” The GSEs were required to develop aligned requirements for master policies by the end of this year under the 2013 Conservatorship Scorecard. Some key changes include: requirements that master policies support various loss mitigation strategies that were developed during the housing crisis to help troubled homeowners; the establishment of specific timeframes for processing claims, including requests for additional documentation; standard setting with respect to determining when, and under what circumstances, coverage under the mortgage insurance (MI) policy must be maintained and when it may be revoked; and the promotion of information sharing among mortgage insurers, servicers, and the GSEs. These new requirements will be incorporated by each mortgage insurer into their master policies and filed with their state insurance regulators for review and approval. FHFA and the GSEs expect that the master policies will become effective in 2014 and promise additional information regarding effective dates in the coming weeks.
MBA Releases Document Outlining its Understanding of Affiliate Fees in QM and HOEPA Points and Fees Calculations
There has been significant industry confusion concerning the extent to which affiliate fees are included in the points and fees calculation, particularly when only a portion of a fee is retained by an affiliate. In order to help alleviate this confusion, MBA has put together a document outlining its understanding of the CFPB’s definitive guidance, based on discussions with Bureau staff, on the treatment of affiliate fees in the Qualified Mortgage (QM) and HOEPA points and fees calculations. The document also includes hypothetical questions and answers to better illustrate the concepts. Important to note, MBA is also of the understanding that CFPB will consider addressing this issue in authoritative written commentary. As background, this document is the product of constant dialogue between MBA and CFPB staff to attempt to gain clarification on the Dodd-Frank rules in order to distribute it widely to industry stakeholders. In addition, because MBA has received a number of inquiries on the issue of bona fide discount points, please see MBA’s guidance on how to apply discount points under the QM’s points and fees cap, which was generated through this same engagement process with CFPB.
CFPB Releases Semi-Annual Update to Rulemaking Agenda
Last Tuesday, the CFPB posted its semi-annual update to its rulemaking agenda on the Bureau’s website. This agenda outlines the CFPB’s rulemaking plans and priorities, in particular their focus on “both continuing to work on rulemakings mandated by the Dodd-Frank Act and turning [their] attention to significant issues in other major markets for consumer financial products and services.” Of interest to the mortgage industry is the listing of pre-rule activities for the Home Mortgage Disclosure Act (HDMA or Regulation C) scheduled for February, as well as “Further Amendments to 2013 Mortgage Rules” – where the CFPB intends to conduct further analysis on the definition of rural and underserved counties, provide additional guidance on Appendix Q’s debt-to-income standards under QM to help facilitate the development of automated underwriting systems, and other topics as warranted. The full agenda may be found here and includes the Dodd-Frank rulemakings scheduled to come into effect this January.
HUD Extends Annual Recertification Filing Deadline for Title I and Title II Lenders and Mortgagees with a December 31, 2013 Fiscal Year End
Recently, HUD announced in Mortgagee Letter 2013-42 that it has extended the deadline for FHA-approved Title I and Title II lenders and mortgagees with a December 31, 2013 fiscal year end to file the annual recertification package, including the submission of financial information and annual renewal fees. FHA-approved lenders and mortgagees have 90 days after the end of their fiscal year to complete the recertification process. Going forward, HUD is requiring that all lenders and mortgagees use the new Lender Electronic Assessment Portal (LEAP) for the recertification process. However, because LEAP recertification functionality will not be deployed until after March 31, 2014, lenders and mortgagees with a fiscal year end of December 31, 2013 will be unable to access LEAP within the required timeframe. For all FHA-approved lenders and mortgagees affected, the filing date has been extended until 30 days after the deployment of LEAP recertification functionality. According to HUD, the lenders and mortgagees in question should be prepared to complete the recertification process, including the submission of financial information and fee payments, no later than May 31, 2014.
