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Recent changes to mortgage regulations impact escrow accounts, jumbo loans and credit notices. Lawyers unsuccessfully tried to stop the implementation of regulations that affect how companies deal with private customer information. Other recently addressed issues include risk-based pricing, appraisals and discrimination.

In February, the Federal Reserve Board issued a final rule and requested comments for a second rule under Regulation Z that implements the Truth in Lending Act. The rules, required by the Dodd Frank Wall Street Reform Act, revise escrow account requirements.

The final rule increases the annual-percentage-rate threshold for jumbo loans considered to be higher-priced. While a first lien is normally considered to be higher-priced if it is priced 150 basis points higher than current prime rates, the final rule raises the threshold to 250 BPS on jumbo mortgages.

Jumbo applications taken on or after April 1 are impacted.

The other Fed rule expands the minimum period for mandatory escrow accounts for first-lien, higher-priced mortgage loans from one to five years. In some cases, the period can exceed five years.

Additional escrow disclosures are also required under the rule.

Maine’s Bureaus of Financial Institutions and Consumer Credit Protection issued clarifying guidance regarding how licensees should meet their Maine Truth-in-Lending disclosure obligations, Patton Boggs LLP reported. Maine opted out of the federal TILA.

On March 15, the Federal Reserve Board of Governors published new model disclosure notices for the Equal Credit Opportunity Act and the Fair Credit Reporting Act. The updates are required under section 615(a) of the FCRA that were added by section 1100F of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

A ruling by the U.S. District Court for the District of Columbia against the Federal Trade Commission on the Red Flags Rule was overturned by the U.S. Circuit Court of Appeals, the FTC said in a March 4 news release.

The appeals court dismissed the case filed by the American Bar Association because, “in light of the recent amendments to the Fair Credit Reporting Act, the ABA’s challenge to the FTC Red Flags Rule is moot.”

A newsletter from Patton Boggs LLP indicated that the Fed and the FTC published a risk-based pricing rule pursuant to an FCRA amendment that was made by the Fair and Accurate Credit Transactions Act of 2003. Compliance with the rule became mandatory on Jan. 1. The law firm noted that Section 1100F of Dodd-Frank amended the FCRA risk-based pricing notice requirements to provide for the disclosure of a numerical credit score used in making the credit decision plus credit-score information that was already required.

As proposed, the new disclosures would need to be included in a general risk-based pricing notice, and mortgage companies that elect to provide a credit score disclosure notice in lieu of a general risk-based pricing notice could continue to do so.

The completion of a “rigorous” internal audit by Solidifi confirmed that the company is meeting the regulatory requirements of the FHA appraiser independence guidelines, the Dodd-Frank Act and its supporting interim final rules, and revisions to interagency guidelines, a March 15 statement said. Solidifi, a Mortgage Daily advertiser, focused on five major aspects — including appraiser compensation, appraiser independence and quality control.

A milestone million delinquent mortgages have been reviewed for loss mitigation by DecisionReady, a Feb. 8 statement said.

The Irvine, Calif., company claims its technology enables adherence to servicer guidelines and supplemental directives.

ISGN said in January that it added Interthinx’s FraudGUARD and PredProtect compliance suite to the MORvision loan origination system.

Also in January, Ellie Mae announced that ComplianceEase granted its RegulatorConnect certification to export capabilities in Encompass360.

New regulations that are intended to prevent discrimination were proposed by the Department of Housing and Urban Development, a recent news release said. Among the prohibitions outlined in the rule are lending decisions based on sexual orientation or gender identity. The requirement applies to loans insured by the Federal Housing Administration.

A study by Compliance Tech reportedly found that blacks and Hispanics “received significantly fewer mortgages than whites between 2004 and 2009,” America’s Wire announced last month.

“African-Americans and Hispanics borrowed 62 percent less to buy or refinance homes in 2009 than they borrowed before the housing market crashed in 2004,” America’s Wire claims, “while mortgages to whites declined only 17 percent, and Asians obtaining nearly an equal amount in mortgages.”


A million delinquent mortgages have been reviewed for loss mitigation by DecisionReady, a Feb. 8 statement said.

The Irvine, Calif., company claims its technology enables adherence to servicer guidelines and supplemental directives.

ISGN said in January that it added Interthinx’s FraudGUARD and PredProtect compliance suite to the MORvision loan origination system.

Also in January, Ellie Mae announced that ComplianceEase granted its RegulatorConnect certification to export capabilities in Encompass360.

American Bar Association, Appellee, v. Federal Trade Commission, Appellant.

Case No. 10-1057, (U.S. Court of Appeals For The District of Columbia Circuit).

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