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Countdown to QM Compliance

Posted by Jeff Schneider on Jan 8, 2014 10:29:00 AM

After more than a year of preparation for many companies in the mortgage industry, we are now just days away from the Consumer Financial Protection Bureau’s deadline for compliance with the new Qualified Mortgage rule. As I’m sure every reader of this blog knows, all loans started after January 10, must be sorted into one of the three new buckets. 

 

Back when I started in this business, we used Excel spreadsheets for much of the analytical work required to keep our business on track. Some executives out there now are probably still trying to put all the calculations into a handy worksheet. Some of you younger readers are laughing, but it can be very hard to let go of the safeguards that have protected us over the years. That’s part of the reason that we still use so much paper in a process that is, for the most part, already electronic.

 

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Topics: Mortgage Compliance, Compliance, QM

Two Questions Every Mortgage Pro Needs to Answer Before 2014

Posted by Jeff Schneider on Dec 20, 2013 1:49:00 PM

2013 was an eventful year in the mortgage industry to say the least. As this year comes to an end, there are two questions that every lender needs to address for the upcoming year in addition to all the normal end-of-year hustle and bustle… and while having only two questions to answer doesn’t seem like a lot, these two items are undoubtedly going to change the mortgage origination environment.

 

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Topics: Mortgage Compliance, Compliance, Lead Management System

What Gets Monitored Gets Done...Right

Posted by Jeff Schneider on Dec 4, 2013 4:21:00 PM

There’s an old management adage that says that what you monitor is what gets done. There’s a lot of truth to that. When you set up management systems that pay attention to what’s important, the people you manage tend to pay attention to the same things. Everybody wins. That same adage can be applied to compliance in our industry.

 

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Topics: Mortgage Compliance, Compliance

Why Compliance Begins Before the Application is Taken

Posted by Jeff Schneider on Nov 20, 2013 4:15:00 PM

I’ve known Don Kracl, Zillow’s vice president of mortgage tools and our leader here in the Mortech division, for many years. We started out in this business together well over 30 years ago. Like me, Don is a Midwesterner and has that clarity of language that has made people from our area famous (or perhaps infamous) since at least the days of Mark Twain. 

 

One of the things Don has said for years is that lenders who hope to be more efficient in their loan origination businesses have to learn how to “separate the crap from the apps.” Colorful, yes, but true nonetheless. When a loan officer is permitted to enter an application into the LOS that has no chance of making it all the way to the closing table, it wastes time and money. Worse, in today’s compliance environment, it risks borrower dis-satisfaction.

 

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Topics: Mortgage Compliance, Compliance

Re-thinking the Broker to Mini-Correspondent Strategy?

Posted by Jeff Schneider on Oct 31, 2013 3:01:00 PM

Last week, I told you about an interesting compliance-related strategy that some mortgage brokers are considering that they hope will help them stay within compliance guidelines without having to limit their incomes to 3% or less of the loan amounts they write.

 

A move from broker to mini-correspondent brings with it a lot of changes. Instead of originating and funding loans in the name of their wholesale lenders, mini-correspondents close the loans in their own name for a single wholesale lender, who then re-underwrites and conditions the loan for sale into the secondary market.

 

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Topics: Mortgage Compliance, Compliance

Should You Become a Mini-Correspondent as a Compliance Strategy?

Posted by Jeff Schneider on Oct 23, 2013 2:45:00 PM

Compliance is a top concern, of that there is no doubt. Most lenders are adopting strategies that will see them paying more attention to the new rules or bringing in extra help for quality assurance or even outsourcing compliance work to a third party. This issue doesn’t just impact bankers; it’s also a top concern for mortgage brokers.

 

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Topics: Mortgage Compliance, Compliance

Compliance Corner: The Third ATR Safe Harbor Test for the QM Rule

Posted by Jeff Schneider on Oct 15, 2013 3:01:00 PM

To conclude our discussion on the three safe harbor tests offered to loan originators under the QM rule as it relates to the Ability to Repay rule, we come at last to the third test. This involves borrower paid discount points in connection with the loan.  

 

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Topics: Mortgage Compliance, Compliance

Compliance Corner: The Second ATR Safe Harbor Test in the QM Rule

Posted by Jeff Schneider on Oct 8, 2013 8:16:00 AM

As we discussed in the preceding post, under the new QM rule, if a loan is classified as a safe harbor loan it will be substantially protected from litigation and class action suits for the ATR (ability to repay) compliance regulation. We spoke about the first safe harbor under that rule. The second is called the “3% points and fees” rule.  

 

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Topics: Mortgage Compliance, Compliance

Compliance Corner: Testing for Safe Harbors in the QM Rule (Part 1)

Posted by Jeff Schneider on Oct 1, 2013 2:09:00 PM
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Topics: Mortgage Compliance, Compliance

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