WASHINGTON (8/23/12)--The Community Development Advisory Board of the U.S. Department of the Treasury's Community Development Financial Institutions (CDFI) Fund will hold its next meeting on Sept. 12 in Washington.
The meeting is scheduled to take place between 2:00 and 3:30 p.m. (ET), via a conference call. The teleconference will be open to the public, and fifty members of the public can register to listen in to the call by emailing to AdvisoryBoard@cdfi.treas.gov .
However, the CDFI Fund in its release noted that discussions at the meeting would be limited to advisory board members, Treasury staff, and certain invited guests.
The Community Development Advisory Board makes broad policy recommendations to CDFI Fund Director Donna Gambrell. The CDFI Fund notes that the granting or denial of any particular application for monetary or non-monetary awards is not discussed during the meetings. The CDFI Fund helps locally based financial institutions offer small business, consumer and home loans in communities and populations that lack access to affordable credit.
The CDFI Fund this month awarded $186,853,456 in funds to 210 organizations serving low-income communities, including 22 credit unions.
The fiscal 2012 awards, provided through the CDFI Fund's Community Development Financial Institutions Program (CDFI Program) and the Native American CDFI Assistance Program (NACA Program), represent the largest single announcement of award dollars and award recipients in the CDFI Fund's history.
For more on the CDFI Fund, use the resource link.
WASHINGTON (8/23/12)--The mortgage lending industry is still analyzing how the Consumer Financial Protection Bureau's (CFPB) new mortgage origination proposal could impact their business practices and the Credit Union National Association's (CUNA) Consumer Protection Subcommittee, Lending Council and Housing Finance Reform Task Force will be asked to weigh in to help shape the association comments on the proposal.
The 369-page CFPB proposal, which addresses loan origination standards and compensation rules for mortgage loan officers (MLOs), was issued last week.
Under one part of the CFPB proposal, MLOs would be subject to federal character, fitness and financial responsibility screenings, and also be screened for felony convictions. The screening standards would require credit unions and other institutions to pull credit reports on employees before they are hired and perform criminal background checks to uncover any potential instances of dishonesty, money laundering or breach of trust, or other felony convictions that have been charged in the past seven years.
Credit unions will not be required to focus on an individual's credit score during the credit check, but rather on whether or not they have used credit in a responsible and honest fashion.
Overall, the CFPB proposal states that financial institutions will need to determine that their existing and incoming MLOs have demonstrated the financial responsibility and character to indicate that they will "operate honestly, fairly and efficiently" in their position.
The agency's proposed mortgage loan originator qualification and screening standards would replace varied state and federal Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) standards for loan originators working at credit unions, banks, thrifts, mortgage brokerage firms and nonprofit organizations with a single federal standard.
Financial institutions would also need to provide continuing education courses relating to mortgage loan origination to their MLOs that are not licensed under the SAFE Act. Training courses must cover applicable federal and state law requirements. Training may be provided online, and MLO training approved by the Nationwide Mortgage Licensing System and Registry would meet the potential CFPB training requirements.
Jared Ihrig, CUNA's senior assistant general counsel, said credit unions will more than likely satisfy these screening and training requirements by doing what they are, in most cases, already doing. However, CUNA is continuing to study the details of the proposed rule. Credit unions' training regimes will need to address federal and state law requirements that pertain to the actual MLO's activities.
He also noted that the CFPB proposal would not require registered MLOs to sit for and pass the same certification test that is required of licensed MLOs.
Part of the CFPB mortgage origination proposal also addresses how MLOs are compensated.
MLO bonuses based on the terms of loan transactions would still be banned, but financial institutions could compensate MLOs in certain circumstances utilizing mortgage loan revenues in some instances, such as credit unions' contributions to MLOs' qualified 401(k) plans, employee stock plans and other types of "qualified" deferred compensation plans if certain requirements are met.
Some of the proposed compensation elements of the rule would allow for compensation to MLOs in instances where the MLO has made five or fewer mortgage loan originations in the past year, and in other instances where financial institutions' revenues from mortgage loan origination activities do not exceed certain percentages of their total revenues. The CFPB has considered two different thresholds for this percentage: 25% and 50%.
The proposal will remain open for public comment until Oct. 16. A final version of the proposal will be released in January, according to the CFPB.
For more on the CFPB proposal, use the resource link.
WASHINGTON (8/23/12)--Pending mortgage servicing guidelines that will consolidate and coordinate existing short sale programs into a single standard short sale program could be beneficial to consumers and mortgage lenders, Credit Union National Association (CUNA) Deputy General Counsel Mary Dunn said.
The Federal Housing Finance Agency (FHFA) this week announced that Fannie Mae and Freddie Mac will soon issue new short sale guidelines that will help mortgage lenders and mortgage servicers speed up the short sale process. The new guidelines are scheduled to go into effect on Nov. 1.
The new guidelines will allow homeowners with Fannie- or Freddie-held mortgages that are current on their mortgage payments to sell their homes through the short sale process, provided they have an eligible hardship. The FHFA said mortgage servicers may expedite the short sale process for mortgageholders whose spouse or home co-owner has died. Divorce, disability and job relocations of 50 miles or more will also be considered eligible hardships under the new guidelines.
Additional approval from Fannie Mae or Freddie Mac will not be needed in these cases.
Military personnel who are being relocated due to Permanent Change of Station orders would also be automatically eligible for short sales, and would not be obligated to contribute funds to cover the shortfall between the outstanding loan balance and the sales price on their homes, under the new guidelines, the FHFA said.
The guidelines also streamline the short sale process for homeowners that have missed several mortgage payments or have low credit scores. Fannie Mae and Freddie Mac will also be permitted to offer as much as $6,000 to second lien holders to expedite short sale closings. The guidance will also clarify when applications and sales offers must be submitted for a home sale to be considered a short sale.
Dunn noted that the guidelines raise some questions, and CUNA plans to follow up with the FHFA and review the guidelines with the CUNA Housing Finance Reform Task Force.
The short sale changes are part of the FHFA's Servicing Alignment Initiative, which seeks to aid troubled homeowners by streamlining Fannie Mae and Freddie Mac short sale and foreclosure alternative programs.
For a full FHFA release, use the resource link.