the Mortgage Process Designs for Learning

Transcription

1 The Fundamentals of the Mortgage Process Designs for Learning 1

2 Legal Disclaimer The information presented in these training materials is based on guidelines and practices accepted within the mortgage finance industry generally and is not intended to be all-inclusive. All examples are hypothetical and are for illustrative purposes only. Investor requirements change from time to time and their application is subject to interpretation. Therefore, we cannot and do not guarantee how any specific investor guidelines will be applied to individual circumstances. Our training is not intended and should not be interpreted or relied upon as legal advice. We encourage you to seek legal and compliance advice from a qualified professional. MGIC expressly disclaims any and all warranties, express or implied, including without limitation, warranties of merchantability and fitness for a particular purpose regarding these materials and our training program. In no event will MGIC be liable for any direct, indirect, incidental, punitive or consequential damages of any kind with respect to the training or materials provided. 2

3 Table of Contents 3 Book 1: Understanding The Mortgage Cycle - The Mortgage Cycle & Key Players - Regulatory Compliance Book 2: Taking the Loan Application - Loan Types & Programs - Completing the Loan Application Book 3: Processing the Loan - Processing the Loan - Automated Underwriting - Uniform Underwriting & Transmittal Summary (1008) Book 4: Evaluating Credit, Capacity, Capital & Collateral - Underwriting 4Cs - Credit, Capacity, Capital, Collateral Book 5: Understanding How MI Works - What is MI? - Premium plan options

4 THE FUNDAMENTALS OF THE MORTGAGE PROCESS Book 1 Understanding the Mortgage Cycle

5 Understanding the mortgage cycles helps you: Increase your credibility with your client base Recognize and understand common terms Set buyer expectations 5

6 8 Stages of the Mortgage Cycle Servicing Payments to third parties are collected. Origination The loan application is completed. Processing The loan file is documented. Secondary Market Mortgages are bought and sold by lenders and investors. Underwriting The loan file is evaluated. Warehousing Closed loans are temporarily held. 6 Delivery Loans are packaged and shipped to an investor. Closing Loan documents are signed; title is transferred.

7 Key Players Borrowers Investors Fannie Mae & Freddie Mac (GSEs), Depository Institutions (Bank, Credit Union), Insurance Companies & Pension Funds, Foreign Investors Lenders Retail Originators, Mortgage Brokers, Correspondents Other Specialized Players 7

8 FCRA HMDA ATR Dodd-Frank Act Gramm-Leach Bliley Act USA Patriot Act LE CD TRID CFPB QM FAIR HOUSING ACT Regulatory Compliance 8

9 Looking at the LE, which used to be called the early TIL and GFE, it s now integrated with the CD, which used to be called the final TIL and HUD-1, HUD-1 the APR is different than the TIP, and it looks like you meet ATR 9

10 Regulatory Compliance 10 Fair Housing Act- - Prohibit denial of housing based on discriminatory nature Fair Credit Reporting Act (FCRA) - - Promote accuracy, fairness & privacy of credit file information Equal Credit Opportunity Act (ECOA) - - Make credit equally available to all creditworthy applicants Homeowners Protection Act (HPA) - - Automatic cancellation of mortgage insurance Gramm-Leach Bliley Act (GLB) - - Protect the privacy of nonpublic consumer information

11 Regulatory Compliance Dodd-Frank CFPB QM TRID LE CD 11

12 Regulatory Compliance CFPB Educate consumers Protect consumers Regulate lending practices 12

13 Regulatory Compliance QM Part of ATR rule (Ability to Repay) Credit granted based on good faith determination QM loan has none of the following: Negative amortization Interest only payments > 30 year term Excessive points and fees 13

14 Regulatory Compliance TRID TILA-RESPA Integrated Disclosures Effective 10/3/15 Loan Estimate (LE) Closing Disclosure (CD) 14

15 Regulatory Compliance LE Key loan features Costs Risks Issued within 3 business days of receiving loan application CD Issued at least 3 business days before closing 15

16 Summary Book 1 Eight Stages of the Mortgage Cycle Key Players Regulatory Compliance 16

17 THE FUNDAMENTALS OF THE MORTGAGE PROCESS Book 2 Taking the Loan Application 17

18 Understanding the Loan Application helps you: Minimize buyer anxiety about the home-buying process Increase your credibility with your client base Set buyer expectations 18

19 19 As an alternative to the traditional 30-year mortgage, we also offer an interest-only mortgage, balloon mortgage, reverse mortgage, upside down mortgage, inside-out mortgage, loop-de-loop mortgage and the spinning double axel mortgage with a triple lutz.

20 Loan Types Conventional loans NOT insured or guaranteed by the Federal Government - Conforming - Nonconforming Government loans insured or guaranteed by the Federal Government, i.e., FHA or VA 20