PRE-LICENSURE EDUCATION (PE) TOPIC LIST Effective May 1, 2017

Transcription

1 Overview f Mrtgage Lending PRE-LICENSURE EDUCATION (PE) TOPIC LIST Effective May 1, 2017 Histry f the mrtgage industry Start f the mrtgage industry Events which led t the implementatin f the federal laws and need fr cnsumer prtectin. Rle f the Mrtgage Lan Originatr in cnsumer prtectin. The psitins in the mrtgage industry and their rles Definitin, jb descriptin, and rles f: Mrtgage Lan Originatr (MLO), Mrtgage Brker, Mrtgage Banker, Registered Mrtgage Lan Originatr (RMLO), mrtgage lender/funder, mrtgage investr, mrtgage servicer, mrtgage underwriter, mrtgage examiner, mrtgage regulatr. Regulatry Authrity Wh Oversee the Mrtgage Industry - Cnsumer Financial Prtectin Bureau (CFPB) Federal versight f the CFPB Functins perfrmed by the CFPB CFPB versight authrity Filing cmplaints with CFPB Department f Husing and Urban Develpment (HUD) Primary functin f HUD Prgrams ffered by HUD Number f husing agencies required t be listed n the husing cunseling disclsure Types f lans that trigger the requirement fr a cunseling agency t cnsult with a brrwer Entities that HUD versees Fair Husing Law Prtectins (e.g., health status, etc.) Federal Mrtgage-Related Laws Tpics intended t satisfy the 3 hurs f Federal Law Real Estate Settlement Prcedures Act (RESPA), 12 CFR Part 1024 (Regulatin X) RESPA rigins and purpse Knwledge f the prhibitins, limitatins and exemptins set by RESPA Types f lans t which RESPA is applicable Settlement services Required disclsures t the custmer fr an MLO wh is als a brker Bna fide discunt pints and applicatin during a mrtgage lan riginatin Required infrmatin frm a brrwer that must be included n an applicatin (Regulatin X) Knwledge f third party settlement service prviders Overview f the freclsure prcess Initial escrw statements 1

2 Changes that can be made t the HUD-1/Gd Faith Estimate Issuing a Gd Faith Estimate when nt all infrmatin has been prvided Equal Credit Opprtunity Act (ECOA), 12 CFR Part 1002 (Regulatin B) Factrs that cannt be used t discriminate Ntifying brrwer f actin taken General permissible acts under the Equal Credit Opprtunity Act Circumstances when it is acceptable t deny credit/lan Cmpnents f a ntice f adverse actin Definitin f adverse actin General prvisins f Regulatin B Exceptins t prviding the appraisal reprt Prhibited Factrs Required disclsures when an applicatin is denied Acceptable terms used t describe marital status Adverse actin ntice, including when multiple applicants/guarantrs are n the lan request Definitin f elderly Disparate treatment scenaris Recrd retentin timelines Requirement fr a c-signer Factrs cnsidered when determining creditwrthiness Types f acceptable incme cnsidered in a lan review Requests fr missing applicatin infrmatin Adverse actin scenaris Infrmatin required n a lan applicatin Adverse actin characteristics Timeframe fr sending an adverse actin t an applicant Actins an MLO shuld take when a brrwer refuses t prvide ethnic, race r gender infrmatin Truth-in-Lending Act (TILA), 12 CFR Part 1026 (Regulatin Z) Ntice f right t rescind Permissible fees and finance charges Advertisement requirements Knwledge f the cre cncepts f the Truth-in-Lending Act Ttal pints and fee threshld Definitin f finance charge Definitin f annual percentage rate Lans cvered by the Truth-in-Lending Act Definitin f business day Permissible annual percentage rate tlerances Definitin f dwelling Definitin f residential mrtgage lan Definitin f business day in a mrtgage rescissin Recrd retentin timeframes Classifying seller cntributins Refinancing scenaris with rights t rescind certain types f transactins 2

3 Hme Ownership and Equity Prtectin Act High-Cst Mrtgage, HOEPA Sectins 32 and 12 CFR Part 1026 Minimum term fr a balln payment Examples f cvered lans What is allwed under HOEPA Limitatins n brker fees Entity that enfrces HOEPA Types f lans/lines f credit subject t HOEPA Higher Priced Mrtgage Lans (12 CFR ) Definitin f high priced/cst mrtgage Prhibitins within high priced mrtgages Refinance mrtgage lans Lan Originatr Cmpensatin (12 CFR (d)) MLO cmpensatin basis The rules fr wh may cmpensate an MLO TILA-RESPA Integrated Disclsure Rule (TRID) (a.k.a Knw Befre Yu Owe ) Prhibitins n discriminatin Disclsure timeframes Sectin n disclsure where riginatin charges are reflected Affiliated Business Disclsure Special Infrmatin Bklet Brrwer infrmatin included n Regulatin Z Recrd retentin Required disclsures Timing f disclsures prvided t an applicant Types f permissible fees and finance charges Circumstances under which a Lan Estimate may be amended General infrmatin abut the TILA-RESPA Disclsure Rule Examples f change f circumstance Brrwer infrmatin that is included n an applicatin Infrmatin that must be disclsed t cnsumers upn request Explanatin f an annual percentage rate Party required t prvide the Lan Estimate Types f lans cvered under TILA Actins an MLO must take when there is incmplete infrmatin n a TRID disclsure Scenari vilatins f TRID A brrwer s right t rescissin Definitin f lan cnsummatin Infrmatin that must be disclsed n a Lan Estimate Facts abut Lan Estimate Infrming a brrwer f ther lan cnsideratins Charges/fees disclsed Infrmatin included n a Clsing Disclsure Infrmatin that must be disclsed in an annual escrw statement 3

4 Acceleratin definitin The right t receive an appraisal reprt Hme Mrtgage Disclsure Act (HMDA), 12 CFR Part 1003 (Regulatin C) Mrtgages in reprtable data HMDA definitin f dwelling Infrmatin included in brrwer data Infrmatin that a brrwer must include n an applicatin Infrmatin abut which an MLO shuld nt inquire Infrmatin prvided by the brrwer regarding the right f refusal Fair Credit Reprting Act (FCRA)/Fair and Accurate Credit Transactins Act (FACTA) 15 USC 1681 et seq. Definitin f a fraud alert Infrmatin included in a cnsumer reprt Permissible times when a credit reprt may be accessed Requirement t develp plicies and prcedures regarding identity theft Definitin f creditr Infrmatin included in a FACTA disclsure Length f time a bankruptcy will shw n a credit histry Credit scre evaluatin methds FTC Red Flag rules, 16 CFR Part 681 Parties subject t red flag rules Enfrcement authrity fr red flag rules Bank Secrecy Act/Anti-Mney Laundering (BSA/AML) Requirement that cmpanies prtect cnsumer infrmatin Facts abut Suspicius Activity Reprts (SARs) Circumstances that require filing a SAR SAR privacy requirements Gramm-Leach-Bliley Act (GLB) Privacy, FTC Safeguard Rules and D Nt Call Nn-public infrmatin regarding a custmer. Permissible use f nn-public infrmatin regarding a custmer Purpse f Act Requirement fr written privacy plicy disclsures Acceptable delivery methds fr a privacy ntice Permissible hurs fr telephne calls Written plicies fr maintaining D-Nt-Call lists Precautins t prtect custmer infrmatin Purpse f the Natinal D-Nt-Call Registry Permissible slicitatin scenaris D-Nt-Call request Retentin f infrmatin after a slicitatin Mrtgage Acts and Practices Advertising, 12 CFR Part 1014 (Regulatin N) Advertisements referring t specific credit terms Length f time required t retain advertisements 4

5 Infrmatin required t be included in an advertisement Triggering terms that require additinal disclsure Vilatins f the Act Electrnic Signature in Glbal and Natinal Cmmerce Act (E-SIGN Act) Required ESIGN disclsures Brrwer s cnsent regarding access t infrmatin in electrnic frmat Requirements fr maintaining recrds in electrnic frmat Ways t verify a brrwer s identity USA PATRIOT Act Primary purpse f the Act Majr functins f the Act Cnfidential nature f filing reprts Ways t verify a brrwer s identity Parties subject t the Act Requirement t have a Custmer Identificatin Prgram in place and verifying the identities f brrwers Hmewners Prtectin Act (Private Mrtgage Insurance (PMI) Cancellatin Act) Majr functins f the Act Dcuments that must be prvided t a brrwer at lan cnsummatin Ddd-Frank Act Re-financing situatins Law versight ver TRID Independent appraisal requirements Lan Originatin Activities Tpics intended t satisfy the hurs f educatin nt specific by the SAFE Act. Terms used in the mrtgage industry Lan terms Junir liens Subrdinate lans Escrw accunts High priced mrtgages Table funding Rate lck agreement Tlerances Legal title granted via a mrtgage Types f mrtgages a lender cannt be frced t repurchase Facts n liens Delinquent lan High cst lans Early payment default 5

6 Disclsure terms Yield spread premiums High interest rates Federal mrtgage lans Qualified mrtgage Servicing transfers Lender credits Financial terms Discunt pints 2-1 Buy-dwn Accrued interest Lan-t-value rati Settlement Finance charges Lan discunt pint Debt rati Daily simple interest Premium pricing Lender credit General terms Subrdinatin Cnveyance Cash ut refinance Pre-paids Underwriting Secndary market Third party prviders Primary mrtgage market Nn-traditinal mrtgages Cnsumer credit Lan payment cllectin Assumable lan Examples f riginatin service Assigned lan Payment shck Annual Percentage Rate (APR) Average Prime Offer Rate (APOR) Lan Inquiry and Applicatin Prcess Requirements (1003) Lan Requirements Infrmatin n Frm 1003 Percentage f bank accunt assets attributable tward a lan applicatin Handling credit Reprt discrepancies Acceptable gift dnrs 6

7 Infrmatin prvided t a brrwer in respnse t a lan inquiry Lan Inquiry Prcess Required disclsures that must be prvided t a brrwer in respnse t a lan inquiry Applicatin accuracy and required infrmatin n an applicatin (e.g., name, SSN, address f prperty t be financed, estimated prperty value, incme, lan amunt) Permissible questins n an applicatin Applicatin Prcess Questins n a Brrwer Applicatin Hw MLOs accept lan applicatins Offering and negtiating the terms f a lan Hw MLOs manage infrmatin n an applicatin Service charges subject t 10% tlerance Verificatin and dcumentatin Frms used t authrize the release f infrmatin Methds f verifying incme and assets Percentage f bank accunt assets attributable tward a lan applicatin Methds f verifying emplyment Suitability f prducts and prgrams Reflecting the type f lan n a mrtgage applicatin Disclsures Infrmatin included in the Truth-in-Lending disclsure Disclsures n Lan Estimates Adjustable-rate mrtgage lan disclsures Cnsumer Handbk n ARMs (Charm bklet) Required disclsures Reverse mrtgages Accuracy (e.g., tlerances) Timing Scenaris and which allwable tlerance Service charges subject t a 10% tlerance Timing f ntificatin f actin taken Timing f early disclsures Lan Estimate Timeline f when a Lan Estimate must be prvided Expiratin f charges and terms in a Lan Estimate expire Time frm Lan Estimate t lan cnsummatin 7

8 Exceptins t prviding the Lan Estimate Reissuing a Lan Estimate Time perid fr the delivery f the Affiliated Business Disclsure Time perid fr the delivery f the Special Infrmatin Bklet (Knw Befre Yu Owe) Timeframe fr the cnsideratin fr settlement charge befre the expiratin Timing f the reissuing Lan Estimates Timeline f the initial Lan Estimate disclsure Timing f prviding the appraisal reprt Timing f tlerance crrectins Sending a list f cunseling services Shpping Valid reasns fr a Change in Circumstance Delivery Methd Electrnic Face-t-Face Standard Mail Overnight Delivery Clsing Disclsure When applicants entitled t advance inspectin f a clsing Initial Clsing Disclsure Timing f Disclsures Final Clsing Disclsure Timeframe f prviding an updated clsing disclsure Definitin f a business day fr delivery purpses Hmewnership Cunseling Disclsure Lan Qualificatin Requirements, Prcessing, and Underwriting Brrwer analysis Assets Acceptable assets that may be used fr a dwn payment Types f asset classificatins Assets permissible t be used tward reserve funds Actins nt permitted with respect t Verificatin f Depsits Liabilities Liabilities listed n a lan applicatin Types f liabilities 8

9 Incme Dcumentatin required fr a self-emplyed applicant Utilizing capital gains incme n an applicatin Types f applicable incmes types fr lan qualificatin Scial security and/r disability incme that may be applied tward a lan analysis r as qualifying incme Dcumentatin f wrk histry and incme when there has been an absence in emplyment ver 3 years Calculating mnthly incme Credit reprt Infrmatin included n a credit reprt Factrs used in determining a credit scre Qualifying ratis Definitin f capacity Factrs when calculating the expense-t-incme rati Lan t value ratis Calculating the debt-t-incme rati Calculating the husing t incme rati Calculating the ttal debt rati Ability t Repay Factrs taken int cnsideratin when reviewing an applicant s ability t repay a lan Methds f verifying incme/assets Determining a brrwer s ability t repay Allwable debt t incme rati at lan cnsummatin Safe harbr prvisins and scenaris Ability t repay scenaris Tangible net benefit Occupancy types Verificatin f Depsit scenaris Appraisals Purpse f appraisals Market apprach Incme apprach Cst apprach Market data apprach Using cmparable infrmatin t establish values 9

10 Requirement/timeline t infrm applicant f the right t receive an appraisal Facts n appraisals Definitin f appraisal Appraisal requirement with a high-risk mrtgage Definitin f appraiser Title reprt Obtaining title reprts Timing f title reprts and cmmitments Preliminary Title Reprts Cst apprach Insurance Fld Insurance Designates znes fr fld insurance Limits f fld insurance Private Mrtgage Insurance Purpse f private mrtgage insurance Benefits f private mrtgage insurance Facts n private mrtgage insurance and ratis Requirement guidelines t ending private mrtgage insurance Lan t value rati that triggers private mrtgage insurance Hazard/Hmewner Insurance Frced-placed insurance Clsing Title and title insurance Title insurance cverage Pririty in multiple mrtgage scenaris Definitin f easement Encumbrances Recnveyance Settlement/Clsing agent Brrwer/Seller s ability t review the HUD-1 Settlement Statement Eligible signatures n the security instrument Use f a Pwer f Attrney (POA) Explanatin f fees Fees/charges listed n HUD-1 Settlement Statement Title insurance fees Pre-paid fees Types f escrw expenses 10

11 Examples f Originatin fees Lan riginatin fees Explanatin f dcuments Required dcuments at a clsing Required dcuments when using a prperty as cllateral Nte disclsures n a lan Assumptin clauses Prviding the escrw analysis statement Funding When des a rescissin perid end? Funding regarding rescissin perids Financial Calculatins/Mrtgage Math/APR Peridic Interest Interest rate calculatin scenaris General facts Interests per diem facts Payments Calculatin scenaris fr mrtgage insurance Calculatin scenaris fr interest rates Calculatin scenaris fr mnthly payments Calculatin scenaris fr lan amunts Effect f escrw n mrtgage Order f payments and imprtance f payments t the underwriting f lan Clsing Disclsure infrmatin Dwn Payments Calculating dwn payment amunts/percentages Lan-t-value ratis Lan-t-value rati calculatin scenaris Debt-t-incme ratis Debt rati calculatin scenaris Factrs in calculating debt ratis Discunt Pints: Fixed interest rate buy-dwns Permanent nte Definitin f discunt pint Discunt pint calculatin scenaris Purpse f discunt pints 11

12 Clsing csts and prepaid items Clsing csts/pre-paid items calculatin scenaris Hazard insurance cllectin ARMs (e.g., fully indexed rate) Interest rate adjustment calculatin scenaris Payment adjustment calculatin scenaris Qualified Mrtgage mnthly payment calculatins Calculating the debt t incme rati Traditinal and Nn-Traditinal Mrtgage Prducts Tpics intended t satisfy the 2 hurs f Nn-Traditinal Mrtgage Lending Cnventinal/cnfrming (e.g., Fannie Mae, Freddie Mac) Respnsibilities f Fannie Mae Limits n clsing cst cncessins Fee charges n lans with certain risk characteristics Fannie Mae/Freddie Mac s autmated underwriting systems Requirements when purchasing a nn-wner ccupied rental prperty Acceptable dwn payment amunts Hazard insurance requirements Pre-payment requirements Gvernment (e.g., FHA, VA, USDA) Definitin f FHA Mrtgage Facts abut FHA lans Definitin f FHA Facts abut VA lans Prhibitin n mrtgage insurance FHA interest rate calculatin scenaris Types f gvernment guarantrs Definitin f entitlement Certificate eligibility requirement Acceptable funds fr a dwn payment/clsing csts Prperties eligible fr FHA purchase transactins FHA lan limits VA funding fees Upfrnt mrtgage insurance premiums Residual incme qualificatin test Required dcumentatin Mnthly mrtgage insurance payment scenaris Minimum dwn payment fr an FHA lan Cnventinal/nncnfrming (e.g., Jumb, Alt-A) 12

13 Facts n jumb lans Definitin f nn-cnfrming lan Examples f nn-traditinal lans Requirements fr an escrw accunt assciated with a high priced lan Requirements fr an escrw accunt assciated with a high cst lan Statement n Subprime Lending Definitin f payment shck Definitin f subprime Characteristics f ARM lans Definitin f a debt-t-incme rati assessment Examples f credit risk characteristics Scenaris t determine when a balln lan may be apprpriate fr a brrwer Characteristics f subprime brrwers Characteristics f a subprime mrtgage Stated incme lans Nn-incme verifying lans Guidance n Nntraditinal Mrtgage Prduct Risk Characteristics f a nn-traditinal mrtgage lan Risks f nn-traditinal mrtgage prducts Re-payment capacity f a brrwer Identifying the right nn-traditinal mrtgage prduct fr brrwers Cmmunicatins with cnsumers regarding nn-traditinal mrtgage prducts Qualified and Nn-Qualified Mrtgage Prgrams Features f a qualified mrtgage Allwable pints and fees fr qualified mrtgages Infrmatin used t determine whether a lan is qualified Annual percentage rates that make a mrtgage qualified Categries f qualified mrtgages Nn-qualified mrtgage (Nn-QM) Features f a nn-qualified mrtgage Types f nn-qualified mrtgages Mrtgage lan prducts Fixed Characteristics f a fixed-rate mrtgage Cmparisns f types f lans (scenaris) Situatins that affect a fixed rate mrtgage payment Percentage f pay dwn required t lessen mnthly payments Fixed-rate mrtgage lan with escrw Adjustable Payment ptins fr an adjustable-rate mrtgage Facts n margin with respect t adjustable-rate mrtgages Facts n the index with respect t adjustable-rate mrtgages Definitin f fully indexed rate 13

14 Examples f adjustable-rate mrtgages Scenaris resulting in a change in mnthly payments Facts n ARM lans Fully indexed rate scenaris Scenaris reflecting payments increasing/decreasing n change date Timeline fr ntifying a custmer f a rate change Factrs when determining interest rates Calculating a brrwer s mnthly payment Balln mrtgage lan prducts Facts abut balln mrtgages Types f balln mrtgages Lender requirements Scenaris t determine when a balln lan may be apprpriate fr a brrwer Reverse mrtgage Facts n reverse mrtgages Timeline fr calculating interest n hme equity cnversin mrtgage lans Payments required after clsing n a cnversin mrtgage lan Age requirements fr cnversin mrtgages Amunt f title insurance Facts n cnstructin-t-permanent financing prgrams Permissible percentage f ttal equity allwed fr withdrawal Scenaris that cause the full balance t becme due Requirements f reverse mrtgage advertisements Required disclsures Purchase Mney Secnd Mrtgages Hme Equity Line f Credit (HELOC) Examples f pen-ended credit lans Characteristics f a HELOC Fundamentals f Cnstructin Mrtgages Definitin f cnstructin lan Classifying the disclsure f financing by the same creditr when cnstructing a hme Required payments n a cnstructin lan Interest-nly Mrtgages Facts abut interest nly lans Facts n interest nly payments Facts n interest nly mrtgages Other Mrtgage Prducts 14

15 Ethics Tpics intended t satisfy the 3 hurs f Ethics, Fraud, and Cnsumer Prtectin. Ethical issues and behavir related t lan riginatin activities Vilatins f law Vilatins f Graham-Leach Bliley Act Prhibited acts Examples f redlining Acceptable/nn-acceptable practices under RESPA Examples f prhibited acts Requests fr persnal infrmatin Examples f kickbacks Duties a lan prcessr may/may nt perfrm Predatry lending and steering Definitin f steering Scenaris surrunding the prper designatins f lans and prperty types Fairness Lending Definitin f a referral and the required assciated disclsures, if necessary Cercin scenaris Scenaris where the appraiser has a cnflict f interest Discriminating against an applicant Requirement t treat all applicants with the same level f fairness Truth in marketing and advertising Scenaris where infrmatin is misleading within an advertisement Bait and switch scenaris Perfrming a due diligence review f advertisements prir t publicatin Scenaris where unfair, deceptive, r abusive acts are undertaken Examples f lawful advertising Types f advertisements that are subject t federal regulatins Rules surrunding cntact (e.g., Established business relatinship ) Permissible statements/phrases within an advertisement Brrwer educatin Fraud detectin Asset fraud Red flags n a sales cntract Applicatin red flags Verifying lan applicatin infrmatin 15

16 Occupancy fraud Incme fraud General red flags that culd represent fraud Scenaris surrunding a cnsumer s bank activity Scenaris where infrmatin is nt prvided t a brrwer Emplyment fraud Liability fraud Suspicius activity Financial respnsibility Permitted fees, payments, and cmpensatin (e.g., Lan Estimate) Fees that may nt increase due t changed circumstances Hw fees are handled based n the Lan Estimate Clsing cst scenaris Settlement scenaris where mnies are missing r misused Scenaris surrunding referral fees Splitting fees Handling cnsumer cmplaints Mrtgage cmpany cmpliance Acceptable practices when acting n behalf f a lender Acceptable practices regarding appraisals Scenaris when an MLO discvers material infrmatin that shuld be cnveyed t the lender Scenaris surrunding the infrmatin supplied by emplyers Requirements fr MLOs Relatinship with cnsumers Ethical handling f a custmer s persnal infrmatin Dwn payment scenaris Interest rate adjustment scenaris Pwer f Attrney (POA) scenaris Permissible reasns fr requesting a credit reprt Scenaris f ntifying the underwriter f a change in the brrwer s applicatin r status Prper disclsures by MLO if there is a ptential cnflict f interest Scenaris surrunding situatins with brrwer s and c-brrwer s Permissible acts regarding the appraisal f a client s prperty Scenaris surrunding situatins with brrwer s undisclsed incme Permissible acts after discvering depsits incnsistent with brrwer s incme included n applicatin Scenaris invlving a gift received by the brrwer 16

17 Scenaris f ntifying a lan fficer if a brrwer has applied with ther cmpanies fr additinal mrtgages Scenaris surrunding a brrwer prviding infrmatin n incme Cybersecurity scenaris General business ethics Scenaris where brrwer has prvided false infrmatin Scenaris where brrwer is seeking advice Scenaris where the MLO is falsifying infrmatin n behalf f a brrwer Prviding suitable unslicited advice t a brrwer Scenaris where utside parties/individuals t the lan attempt t btain infrmatin n a lan r abut a brrwer Unifrm State Cntent Tpics Intended t Satisfy the Requirements Assciated with the Unifrm State Test SAFE Act and CSBS/ARRMR Mdel State Law State mrtgage regulatry agencies Regulatry authrity Regulatry pwer Creatin and purpse f the NMLS Registry Frequency f investigatins and exams CFPB authrity t cnduct exams Cntinuing educatin requirements Unique identifiers fr MLOs CFPB penalty limits CFPB Lan Originatr Rule Authrity f state regulatr (e.g., audit) Respnsibilities and limitatins Definitins and Dcuments NMLS SAFE Act Dcuments t be filed fr public recrd License Law and Regulatin Minimum requirements fr state licensing laws Persns required t be licensed Services cnducted by MLOs and the requirement t be licensed Entities required t use MLOs Allwable acts by underwriters Clerical/supprt duties Lan prcessrs 17

18 Business that individuals may/may nt cnduct withut being licensed as an MLO license General business Nn-prfit institutins Business purpse lans (e.g., cmmercial, nn-wner) Licensee qualificatins and applicatin prcess Pre-licensing educatin requirements Backgrund checks Requirements t becming an MLO Managing felny charges Waiting perid fr test retakes Spnsrship requirement MLO and the requirement t be licensed with a state Grunds fr denying a license Reasns fr denying an applicant License maintenance Cntinuing educatin requirements Renewal perid License renewal lengths and minimum standards Cntinuing educatin curses apprvals Withhlding a recrd Requirements t re-take exam if individual has been absent frm industry Requirement t maintain an active license Required cntinuing educatin hurs cmpleted t renew a license NMLS requirements Change f emplyment and updating NMLS Required submissins that applicants must make t the NMLS system Required disclsures t NMLS Requirement t publicly display an NMLS identifier Requirement t include the NMLS identifier in certain situatins Licensed nn-depsitry emplyees - vs registered depsitry emplyees in NMLS Cmpliance Authrity t examine licensee s bks and recrds Prhibited cnduct and practices Prhibited acts Requirement t btain a unique identifier Investigatins by state agencies Required cnduct Individual respnsible fr prviding dcuments during a cmplaint investigatin Required infrmatin t be maintained in a lan file Assumable mrtgage lan prducts 18

19 Penalties assessed fr failure t cnduct certain duties Permissible acts Timeline fr submitting bks and recrds t a state regulatr General scenaris regarding mrtgage lan riginatin Required infrmatin n lan dcuments Recrd retentin requirements Advertising Requirement t include NMLS unique ID in advertisements 19

20 CONTINUING EDUCATION (CE) APROVED TOPIC LIST (fr Annual CE Year 2018) Federal Mrtgage-Related Laws Tpics Intended t Satisfy the 3 Hurs f Federal Law Required: Truth-in-Lending Act (TILA), 12 CFR Part 1026 (Regulatin Z) Cmprehensive review f permissible fees and finance charges Advertisement requirements. Mrtgage Lan Originatr and Real Estate Agent Mrtgage Lan Originatr and Title/Settlement Cmpany Mrtgage Lan Originatr t cnsumer Lans cvered by the Truth-in-Lending Act Permissible annual percentage rate tlerances Refinancing scenaris with rights t rescind certain types f transactins Finance charge verstated n initial Truth in Lending Disclsure Regulatin Z, 12 C.F.R (b) and 12 C.F.R (c) Regulatin Z 12 C.F.R (e)(1) Finance charge understated n initial Truth in Lending Disclsure Regulatin Z, 12 C.F.R (d)(1) Required: Real Estate Settlement Prcedures Act (RESPA), 12 CFR Part 1024 (Regulatin X) Cmprehensive knwledge f the prhibitins, limitatins and exemptins set by RESPA Types f lans t which RESPA is applicable Settlement services Bna fide discunt pints Freclsure prcess Changes that can be made t the HUD-1/Gd Faith Estimate Federal Finding 7: Prhibited payments in cnnectin with Marketing Service Agreements. Sectin 8 f RESPA, 12 U.S.C. 2607(a) Regulatin X, 12 C.F.R (e) 12 C.F.R (g)(2) Higher Priced Mrtgage Lans (12 CFR ) Prhibitins within high priced mrtgages Refinance mrtgage lans Equal Credit Opprtunity Act (ECOA) 12 CFR 1002 (Regulatin B) Factrs that cannt be used t discriminate Ntifying brrwer f actin taken Permissible acts under the Equal Credit Opprtunity Act Circumstances when it is acceptable t deny credit/lan Cmpnents f a ntice f adverse actin Disparate treatment scenaris Factrs cnsidered when determining creditwrthiness 20

21 Types f acceptable incme cnsidered in a lan review Adverse actin scenaris Privacy f Cnsumer Financial Infrmatin 12 CFR 1016 (Regulatin P) / 16 CFR 313 Cnditins which a financial institutin may r may nt disclse nnpublic infrmatin Defining when an individual is a cnsumer r a custmer Identifying the difference between custmer relatinships vs. cnsumer relatinships Privacy and Opt ut ntices fr cnsumer r custmer Other Federal laws pertaining t lan riginatin activities. Ethics Tpics intended t Satisfy the 2 Hurs f Ethics, Fraud, and Cnsumer Prtectin. Identity Theft Rules 16 CFR 681 Identity theft prgram Elements f the prgram t detect and prevent identity theft Detecting and identifying relevant Red Flags Actins taken when identity theft ccurs Situatins f identity theft detected D Nt Call Telemarketing and Cnsumer Fraud and Abuse Preventin Act 15 USC 6101 et seq. Defining and prhibiting deceptive telemarketing acts Senir citizen and ther cnsumer fraud Scenaris f abusive cnsumer acts Mrtgage Acts and Practices Advertising (Regulatin N) 12 CFR 1014 Detectin f prhibited advertising Other prhibited mrtgage acts and practices Required: Failed t cmply with Bank Secrecy Act/Anti-Mney Laundering and Suspicius Activity Reprt filing requirements. Title 31 C.F.R and 1029 Other tpics pertaining t ethics, fraud, and cnsumer prtectin. Enfrcement actins Traditinal and Nn-Traditinal Mrtgage Prducts Tpics Intended t Satisfy the 2 hurs f Nn-Traditinal Mrtgage Lending FHA Mrtgage Limits and Updates CSBS/AARMR Guidance n Nntraditinal Mrtgage Prducts Risks Other tpics pertaining t Nn-Traditinal Mrtgage Prducts ARMS Negative amrtizatin lans 21

22 Jumb lans Reverse Mrtgages NON-APPROVED TOPIC LIST The fllwing curse tpics have been determined t nt be nt in cmpliance with the SAFE act: Any curse nt directly tied t the negtiating, taking, and prcessing f a residential lan applicatin. General Self-Imprvement Curses Financial Planning Curses Any curse relating t selling, sales, marketing, lead-generatin, r business develpment Lan prduct training (lan sales, prduct marketing, r advertising Any curse tpics related t cnsumer data mining, market segmentatin, r minrity marketing practices Any infrmatin technlgy-related curse Cmmercial lending Curses n any Federal r State law nt directly tied t residential mrtgage lending 22