The Outlook for Mortgage Lenders and Brokers

1
The Outlook for Mortgage Lenders and Brokers and
the Impact of Federal Lending Regulations Marylan
d Association of Mortgage Professionals 2013
Annual Conference March 13, 2013 Jim
Milano milano_at_thewbkfirm.com
1
2
CFPB Regulatory Authority

• In January the CFPB issued 7 Final Rules
• January 10
• Ability to Repay (TILA)
• High-Cost Mortgages (HOEPA) Homeownership
  Counseling Amendments to TILA RESPA
• Escrow Accounts for Higher-Priced Loans (TILA)
• January 17
• Mortgage Servicing under TILA RESPA
• January 18
• Appraisals for Higher-Priced Mortgage Loans
• ECOA Appraisals Requirements
• January 20
• Loan Originator Compensation (TILA)

3
Ability to Repay Final Rule

• Scope Overview
• Applies to all consumer credit transactions
  secured by a dwelling
• Except HELOCs, investment properties (business
  purpose loans), timeshare plans, reverse
  mortgages, temporary or bridge loans of 12
  months or less, or construction-to-permanent loan
  with a construction phase of 12 months or less
• Creditors must make a reasonable good faith
  determination, at or before consummation, that
  the consumer will have a reasonable ability to
  repay the loan according to its terms
• 3 ways to comply
• General ATR Option meet 8 general underwriting
  factors
• Qualified Mortgage (QM) Option either a safe
  harbor from or a rebuttable presumption of
  compliance with ATR factors
• Includes Temporary QM Balloon QM
• Refinance of a non-standard mortgage into a
  standard mortgage
• Effective Date January 10, 2014

4
Ability to Repay Final Rule

• Penalties
• TILA contains severe penalty provisions for
  failure to consider Ability to Repay for
  violation of LO compensation qualification
  provisions
• Consumer may be able to recover special statutory
  damages equal to sum of all finance charges
  fees paid by the consumer, unless creditor
  demonstrates failure to comply is not material
  (in addition to actual damages, statutory
  damages, and court costs attorneys fees)
• Statute of limitations 3 years from date of
  violation
• Defense by recoupment or set-off in a foreclosure
  action by the creditor, any assignee of the
  creditor, or anyone acting as servicer on behalf
  of the holder of the loan
• No time limit on use of defense, but consumer
  cannot recover more than first 3 years of finance
  charges fees plus actual damages fees
  (including reasonable attorneys fees)
• Recordkeeping will be crucial for evidencing
  compliance

5
Ability to Repay Final Rule

• General ATR vs. QM
• General ATR
• Must consider verify 8 specific underwriting
  factors to make a reasonable good faith
  determination of ability to repay using
  reasonably reliable third-party records
• Creditors are given flexibility in developing
  their own underwriting standards changing those
  standards over time
• But must show determination was reasonable in
  good faith
• QM
• Provides liability protection either a safe
  harbor from or a rebuttable presumption of
  compliance with the 8 General ATR factors
• But a QM must satisfy product feature
  requirements, stricter underwriting standards
  points fees limitation
• Rule adds Appendix Q to Regulation Z
• Sets forth specific underwriting requirements on
  what must be considered for each factor how
  factors are used to calculate DTI ratio
• Based on FHA Handbook 4155.1 manual underwriting
  guidelines

6
Ability to Repay Final Rule

• General ATR Option
• Must consider verify 8 ATR underwriting factors
• Borrowers current or reasonably expected income
  or assets, except for value of the dwelling that
  secures the loan
• Borrowers current employment status (assuming
  creditor relies on employment income in
  determining repayment ability)
• Borrowers monthly payment on the covered
  transaction, calculated in accordance with the
  ATR final rule
• Borrowers monthly payment on any simultaneous
  loan the creditor knows or has reason to know
  will be made, calculated in accordance with the
  ATR final rule
• Borrowers monthly payment for mortgage-related
  obligations
• Borrowers current debt obligations, alimony and
  child support
• Borrowers monthly debt-to-income ratio (DTI) or
  residual income, calculated in accordance with
  the ATR final rule
• Borrowers credit history

7
Ability to Repay Final Rule

• General ATR Option
• More flexible underwriting standards than QM
• Income or assets need only consider what is
  necessary to support a determination that the
  consumer can repay the loan
• Verify using third-party records that provide
  reasonably reliable evidence of the borrowers
  income or assets (e.g., copies of tax-returns,
  W-2s, payroll statements, employer records)
• Employment status may be full-time, part-time,
  irregular, etc. and may be verified orally if
  creditor makes a written record of the
  conversation
• Monthly payment on the covered transaction any
  known simultaneous loans must be calculated using
  the fully indexed rate or any introductory
  interest rate, whichever is greater and monthly,
  fully amortizing payments that are substantially
  equal
• Monthly payment for mortgage related obligations
  includes recurring payments such as property
  taxes, MIP, HOAs, etc.
• Current debt obligations creditor has
  significant flexibility to consider debt in light
  of attendant facts circumstances, including if
  the obligation is likely to be paid off soon
  after consummation

8
Ability to Repay Final Rule

• General ATR Option (continued)
• More flexible underwriting standards than QM
• DTI Creditors have discretion to determine the
  appropriate ratio in making a reasonable good
  faith ATR determination
• May consider compensating factors such as finding
  ATR despite a higher DTI in light of borrowers
  other assets
• Credit history does not specify which aspects of
  credit history must be considered or how aspects
  should be weighed
• Not required to obtain or consider a consolidated
  credit score
• Evidence that determination was reasonable in
  good faith
• Length of time a borrower successfully makes
  timely payments without modification or
  accommodation
• Underwriting standards adopted by the creditor
  how it was applied to the facts circumstances
  of the loan
• Standards were based on statistically sound
  models, historically resulted in low rates of
  default, applied consistently, etc.
• Commentary emphasizes that whether a decision was
  reasonable in good faith will be highly
  individualized specific to the transaction

9
Ability to Repay Final Rule

• QM Option
• Concern about availability affordability of
  credit led to QM standard
• QMs must meet the following requirements
• Product features
• Provide regular periodic payments
• Not include negative amortization, interest-only
  or balloon features (except for balloon QM)
• Loan term of 30 years or less
• Underwriting requirements
• Consider and verify borrowers current or
  reasonable expected income or assets current
  debt obligations in accordance with Appendix Q
• DTI not to exceed 43 calculated using Appendix Q
  
• Monthly payments calculated based on maximum
  interest rate that may apply during first 5 years
  of the loan periodic principal interest based
  on such interest rate
• Points fees not exceeding 3 of the total loan
  amount of 100,000 or more, with greater limits
  for smaller loans
• 60,000 - 99,999 3,000 (indexed for
  inflation)
• 20,000 - 59,999 5
• 12,500 - 19,999 1,000 (indexed for
  inflation)
• Less than 12,500 8

10
Ability to Repay Final Rule

• QM Option Underwriting Requirements
• Appendix Q sets forth what income debt
  creditors must consider when calculating the DTI
  ratio
• Income can only be used if it comes from a
  source that can be verified, is stable, and will
  continue (income must be reasonably expected to
  continue for at least the first 3 years of
  mortgage)
• Standards on how to consider employment income
  non-employment income, such as
• Overtime bonus only if received for the past 2
  years will likely continue (creditor must
  create an earnings trend)
• Part-time seasonal if uninterrupted for past 2
  years to continue
• Alimony, child support trust income only if
  payments are likely to be consistent for first 3
  years of mortgage (with strict documentation
  standards)
• Stricter rules on how to analyze tax
  returns/forms records
• Employment must verify for most recent 2 full
  years borrower must explain any gaps
• Must analyze the probability of continued
  employment by examining past record,
  qualifications, training, education, etc.

11
Ability to Repay Final Rule

• QM Option Underwriting Requirements (continued)
  
• Appendix Q sets forth what income debt
  creditors must consider when calculating the DTI
  ratio
• Debt standards on how to consider
• Recurring obligations (e.g., revolving accounts,
  alimony, child support)
• Monthly payments on revolving or open-end
  accounts included regardless of balance
• Debts of less than 10 months included if amount
  of debt affects ability to pay during months
  after closing
• Contingent liabilities (e.g., assumptions,
  cosigned obligations)
• Projected obligations debt payments to begin or
  come due within 12 months of closing (e.g.,
  student loan, balloon payment)
• DTI calculation cannot exceed 43
• Must include monthly mortgage-related obligations
  simultaneous loans that creditors knows or has
  reason know about at or before consummation for
  the current transaction

12
Ability to Repay Final Rule

• QM Option 3 Points Fees Cap
• Points fees includes, if known at or before
  consummation
• Finance charge items other than interest
• Real estate-related fees paid to lender,
  originator, or affiliate of either normally
  excluded from the finance charge (e.g., fees for
  title insurance, appraisal fees, credit report
  fees)
• Third party settlement agent fees if the creditor
  requires the service or charge, or retains a
  portion of the charge
• Points charged to consumer to offset loan-level
  price adjustments
• Credit insurance, debt cancellation premiums
  payable at or before consummation
• Loan originator compensation (including employee
  LOs), paid directly or indirectly by a consumer
  or creditor that can be attributed to that
  transaction at the time the interest rate is set

13
Ability to Repay Final Rule

• QM Option 3 Points Fees Cap
• Points fees does not include
• Third-party charges not retained by the creditor,
  originator or an affiliate of either (except
  otherwise included mortgage/credit insurance
  premiums real estate related fees)
• Government mortgage insurance or guarantee fees
• PMI payable after closing the portion of the
  up-front PMI premium that is not in excess of FHA
  standards if the premium is refundable on a pro
  rata basis automatic when loan is paid in full
• Bona fide discount points that are knowingly paid
  to reduce the rate actually reduces the rate
  consistent with established industry practices,
  limited to
• 2 points if undiscounted rate does not exceed the
  APOR by more than 1 percentage point
• 1 point if undiscounted rate does not exceed the
  APOR by more than 2 percentage points

14
Ability to Repay Final Rule

• Temporary QM
• Because of the fragile state of the mortgage
  market, CFPB provided for a second, temporary
  category of QMs with more flexible underwriting
  requirements
• Temporary QM must
• Satisfy the general QM criteria for regular
  periodic payments, maximum 30 year term, and 3
  points fees limit)
• Satisfy the underwriting criteria of/eligible for
  purchase, insurance or guarantee by
• Fannie Mae/Freddie Mac while they operate under
  Federal conservatorship or receivership or
• HUD, VA, USDA RHS
• Temporary QM will expire on the earlier of
• Date the Federal agency issues its own QM rules
• After 7 years (January 10, 2021)

15
Ability to Repay Final Rule

• Special Small Creditor Portfolio Balloon QM
  Exception
• Standard definition of QM excludes loans with
  balloon payments
• Exception for small creditors in
  rural/underserved areas
• Less than 2 billion in assets, originated more
  than 50 of transactions in rural or underserved
  areas, but fewer than 500 total (with affiliates)
  
• Loan generally cannot be sold, assigned, or
  transferred (unless 3 years after consummation or
  to another small creditor)
• Balloon QM Requirements
• Satisfy the standard QM requirements except for
  prohibitions on balloon payments deferment of
  principal
• Consider verify current or reasonably expected
  income/assets, current debt obligations
  DTI/residual income
• Determine consumer can make monthly mortgage
  payments mortgage-related obligations excluding
  the balloon payment
• Must have substantially equal scheduled payments
  calculated using an amortization schedule that
  does not exceed 30 years
• Loan term of 5 years or more
• Fixed rate only

16
Ability to Repay Final Rule

• QM Liability Protection
• Safe Harbor if QM is not a higher-priced
  transaction
• APR does not exceed the APOR (Average Prime Offer
  Rate) by 1.5 or more percentage points (3.5 or
  more for junior lien)
• Borrower can always challenge whether loan
  actually met the QM standards (i.e., points
  fees test, compliance with Appendix Q)
• Rebuttable Presumption if QM is a higher-priced
  transaction
• APR exceeds the APOR by 1.5 percentage points
  (3.5 or more for junior lien)
• Borrower can rebut presumption by showing
  creditor did not make a reasonable, good faith
  determination of repayment ability because
  consumers income, debt, alimony, child support
  monthly payments would leave insufficient
  residual income or assets to meet living expenses
  other non-debt obligations creditor was aware
  of
• But the longer borrower is able to pay, less
  likely able to rebut
• Borrower can again always challenge whether loan
  met QM standards

17
Ability to Repay Final Rule

• Concurrent Proposal
• CFPB requested comments on the following
• Inclusion of LO compensation in points fees
  (proposes alternative calculation methods to
  eliminate double counting or over-inclusion)
• Raising the APR-APOR triggers for balloon loan
  QMs to allow more to reach safe harbor
• New QM for smaller creditors that hold mortgages
  in portfolio
• Proposed exemptions for Federal GSE refinancing
  programs, Homeownership Stabilization
  Foreclosure Prevention programs certain
  non-profit lenders
• Comments were due Feb. 25, 2013

18
Ability to Repay Final Rule

• Refinance Non-Standard Mortgage into Standard
  Mortgage
• Exempt from general ATR requirements if
• New creditor is current holder or servicer of the
  non-standard loan
• New monthly payment is materially lower
• Creditor receives application no later than 2
  months after non-standard mortgage has recast
• Consumer has made no more than one 30-day late
  payment in preceding 12 months no late payment
  in preceding 6 months
• Creditor must consider whether the consumer is
  likely to default on existing non-standard
  mortgage when the loan is recast whether
  standard mortgage would likely prevent consumers
  default
• Non-standard mortgage an ARM with an
  introductory fixed rate for a period of 1 year or
  longer, an interest only loan, or a negative
  amortization loan
• Standard mortgage
• Provides for regular payments cannot have
  negative amortization, interest-only or balloon
  payment features
• Fixed interest for first 5 years term cannot
  exceed 40 years
• 3 points fees cap no cash out

19
Ability to Repay Final Rule

• Prepayment Fee Restrictions
• Covered transactions cannot include prepayment
  fees unless
• Fee is otherwise permitted by law APR cannot
  increase after consummation
• Loan is a QM (standard, temporary, or balloon)
  with a safe harbor (i.e., loan is not
  higher-priced)
• Fee cannot apply after 3rd year following
  consummation
• Must not exceed 2 of outstanding loan balance
  prepaid during first 2 years after consummation
• Must not exceed 1 during 3rd year after
  consummation
• If lender offers loan product with prepayment
  fee, then must also offer an alternative with
  similar features without prepayment fee
• May not structure loan as open-end to circumvent
  restrictions
• Must document compliance that alternative was
  offered
• Recordkeeping Requirements
• Records must be kept for 3 years after
  consummation
• Though records should be retained beyond because
  defense to foreclosure claims have no statute of
  limitations
• Actual paper records not required, as long as
  records can be reproduced

20
LO Compensation Final Rule

• Loan Originator Standards/Compensation under TILA
• Effective Jan. 10, 2014
• Effective June 1, 2013 for prohibition on
  mandatory arbitration financing of credit
  insurance
• Generally keeps 3 basic principles of the current
  provisions
• No compensation based on a transactions terms or
  a proxy (fixed percentage of amount of credit
  extended is allowed)
• No dual compensation
• No steering
• Loan Originator definition is expanded to
  include referring a consumer to a loan originator
  through directed actions that can affirmatively
  influence the consumer
• The term does not include a person that performs
  purely administrative or clerical tasks, real
  estate brokers unless compensated by a creditor
  or loan originator, servicer employees or
  contractors for loan modifications, or seller
  financers that meet certain criteria (no more
  than 3 properties a year, not a contractor, etc.)
• Violations are subject to same TILA penalties as
  Ability to Repay

21
LO Compensation Final Rule

• Payments Based on Loan Terms or a Proxy for Loan
  Terms
• Maintains existing prohibition on compensation
  based on a term of a transaction or a proxy for a
  term
• Clarifies the definition of a proxy to focus on
  whether
• The factor consistently varies with a transaction
  term over a significant number of transactions,
  and
• The loan officer has ability, directly or
  indirectly, to add, drop or change the factor in
  originating the transaction
• Defined Contribution Plans
• Allows for profit-sharing and bonus plans if it
  is not based on the terms of the individual
  originators transactions AND
• Compensation paid in the aggregate does not
  exceed 10 of the originators total compensation
  during the time period the non-deferred profits
  based compensation is paid OR
• Originated 10 or fewer transactions during the
  previous 12 months
• Allows for contributions to designated
  tax-advantaged plans if it is not based on the
  terms of the individual originators transactions
  AND it is one of the enumerated plans in the rule
  that meets IRS requirements (annuity plans,
  simple retirement accounts, etc.)

22
LO Compensation Final Rule

• Pricing Concessions
• Permits decrease in originator compensation to
  defray the cost of an unforeseen increase in an
  actual settlement cost over an estimated
  settlement cost disclosed to the consumer or an
  unforeseen actual settlement cost not disclosed
  to the consumer
• Dual Compensation
• LO cannot receive compensation from both the
  consumer the creditor
• Allows mortgage brokerage firms paid by the
  consumer to pay commissions to their individual
  brokers, so long as commission is not based on
  transaction terms
• Requires that parties closely track document
  each payment
• Payments from the consumer to the LO include
• Payments to the LO from loan proceeds
• Payments to the LO pursuant to an agreement by a
  person other than creditor or its affiliates
  (i.e., non-affiliated seller or homebuilder)
• Payments from the consumer to the LO do not
  include
• Payments derived from an increased interest rate
• Funds from the creditor to reduce the consumers
  settlement charges, including origination fees
  paid by a creditor to the LO
• Payments to the creditor, whether paid directly
  by the consumer or out of loan proceeds

23
LO Compensation Final Rule

• Upfront Points Fees
• Creditors can charge consumers upfront points
  fees
• CFPB declined to put the proposed No-Point,
  No-Fee loan option requirement in the Final Rule
• No Point Banks
• CFPB briefly indicated that it believes there are
  no circumstances under which point banks are
  permissible
• Record Keeping Requirements
• Creditors are required to maintain records
  sufficient to evidence all compensation paid to
  an originator the compensation agreement that
  governs those payments for 3 years after the date
  of payment
• LO organizations have the same requirements plus
  records of all compensation received from
  creditors, consumers or another party
• Personal Liability for Loan Originators for
  Violations
• Limited to the greater of actual damages or 3
  times the total amount of direct or indirect
  compensation received, plus costs of the action
  reasonable attorneys fees

24
LO Compensation Final Rule

• Originator Qualification Screening Standards
• Individual loan originators their employers
  must be qualified
• Employers must ensure their loan originator
  employees are licensed or registered under the
  SAFE Act where applicable
• Employers of loan originators not required to be
  licensed under the SAFE Act must ensure that loan
  originators meet character, fitness and criminal
  background check standards equivalent to those in
  the SAFE Act
• Requires the loan originator receive appropriate
  training
• Requires individual loan originators their
  employers names license or registration
  numbers to be included on the following mortgage
  loan documents
• Credit application
• Note or loan contract
• Security instrument

25
LO Compensation Final Rule

• Additional Requirements
• More Steering Provisions in the Future
• Dodd-Frank requires the CFPB to prescribe
  regulations to prohibit certain kinds of
  steering, abusive or unfair lending practices,
  mischaracterization of credit histories or
  appraisals discouraging consumers from shopping
  
• CFPB to address such regulations in a future
  rulemaking
• Ban on Mandatory Arbitration Clauses
• Contract cannot include terms that require
  arbitration or any other non-judicial procedure
  to settle claims arising from the transaction
• Contract cannot be interpreted to bar a consumer
  from bringing a claim
• Restriction on Financing of Credit Insurance
  Premiums
• Creditors are not permitted to finance, directly
  or indirectly, any premiums or fees for credit
  insurance in connection with a covered
  transaction
• Does not apply to credit insurance paid in full
  on a monthly basis or credit unemployment
  insurance where premiums are reasonable, paid
  pursuant to a separate contract, not paid to an
  affiliate of the creditor the creditor receives
  no compensation on it

26
High-Cost Mortgage Final Rule

• Final Rule for High-Cost Mortgage Homeownership
  Counseling
• Expands HOEPA coverage (High-Cost Mortgage)
• To include purchase-money loans open-end credit
  plans
• Reverse mortgages remain excluded
• Revisions to HOEPA triggers
• APR Test Loan APR exceeds the APOR by
• 6.5 percentage points for first-lien mortgages
  (8.5 if dwelling is personal property total
  transaction amount is less than 50,000)
• 8.5 percentage points for subordinate lien
  mortgages
• Points Fees Test Loan points fees exceed 5
  of the total loan amount, or 8 for loans below
  20,000 or
• Prepayment Penalty Test Loan provides that
  creditor may charge
• a prepayment penalty more than 36 months after
  loan consummation or account opening or
• penalties that exceed more than 2 of the amount
  prepaid
• New restrictions on HOEPA
• Ban fees for modifying loans, cap late fees and
  restrict the charging of fees for payoff
  statement
• Require housing counseling before taking out a
  high-cost mortgage
• New general RESPA requirement list of
  homeownership counseling organizations must be
  provided within 3 business days of application
• Effective Date Jan. 10, 2014

27
Appraisals for Higher-Priced Loans

• Final Rule on Appraisals for Higher-Priced
  Mortgage Loans
• Final Rule Amends TILA/Reg Z
• Effective Date Jan. 18, 2014
• Before making higher-priced mortgage loan
  creditors must
• Obtain a written appraisal performed by a
  certified appraiser and based on a physical
  inspection of a propertys interior
• Provide applicant a statement regarding the
  purpose of the appraisal at time of application
  and a free copy of any written appraisals
  obtained 3 business days prior to closing
• Obtain a second written appraisal at no cost to
  the borrower in connection with certain flipped
  properties if
• Seller acquired the home less than 180 days
  prior, and
• New sales price is 10 higher (if seller acquired
  less than 90 days prior) or 20 higher (if 91-180
  days)
• Excludes Qualified Mortgages, open end credit
  plans, reverse mortgage loans, initial
  construction loans, bridge loans, loans secured
  by new manufactured homes transactions secured
  by a mobile home, boat or trailer

28
ECOA Appraisals Final Rule

• Equal Credit Opportunity Act (Reg B) Appraisals
• Final Rule requires notice and copy of appraisals
• Effective Date Jan. 18, 2014
• Requires creditors to
• Notify applicants within 3 business days of
  receiving an application of their right to
  receive a copy of written appraisals valuations
• Provide applicants a copy of written appraisals
  valuations no later than 3 business days before
  consummation
• Prohibits creditors from charging a fee for
  providing a copy of the appraisal or valuation
• Requirements apply only to appraisals
  valuations made in connection with applications
  for loans secured by a first lien on a dwelling

29
Escrow Account Final Rule

• Final Rule on Escrow Accounts for Higher-Priced
  Mortgage Loans (TILA/Reg Z)
• Final rule issued Jan. 10, 2013 (Board issued
  Proposed Rule Mar. 2, 2011)
• Effective Date June 1, 2013
• Implements Dodd-Frank changes that extend the
  length of time escrow accounts must be maintained
  for certain higher-priced mortgage loans
• Requires accounts to be maintained for at least 5
  years (instead of existing 1 year requirement)
  for closed-end, higher-priced mortgage loans
  secured by a first lien on a consumers principal
  dwelling
• Account may be cancelled upon termination of the
  underlying debt obligation, including by
  repayment, refinancing, rescission and
  foreclosure
• After 5 years, account may be cancelled at
  consumers request if (a) the unpaid principal
  balance is less than 80 of the original value of
  the property, and (b) the consumer is not
  currently delinquent or in default
• Continued exemption for open-end loans, loans
  secured by shares in a cooperative, loans to
  finance initial construction of a dwelling,
  temporary bridge loans with a loan term of 12
  months or less reverse mortgages

30
Upcoming Regulatory Changes

• Other Rules on the Horizon
• Integrated Mortgage Disclosures Rule under TILA
  RESPA
• Final Rule now expected in Sept. 2013
• Proposed 2 new disclosures
• Loan Estimate 3 page replacement for GFE/Initial
  TIL
• Closing Disclosure 5 page replacement for
  HUD-1/Final TIL
• Proposed expanded definition of Finance Charge to
  include the 4(c)(7) real estate related fees
  currently exempt
• HMDA Changes
• Not effective until CFPB issues final regulation
• Will require collection of additional data
  including points fees, difference between the
  loan APR benchmark rate for all loans,
  prepayment penalty term, value of any collateral,
  loan term in months, applicants age credit
  score, originators ID number
• Credit Risk Retention (QRM)
• Final Rule expected in 2013
• Requires 5 credit risk retention of all but
  least risky mortgages

31
Other Hot Regulatory Topics

• CFPB Exams of Non-Bank Mortgage Companies
• Recess Appointment
• Fair Lending
• FHA
• Tighter Requirements
• Higher Premiums
• More Stingy on Claims
• More Enforcement Actions, Indemnification Demands
  
• Servicing
• More Servicing Regulations, Oversight
• Cost of Servicing will Rise
• Servicing Spreads will Rise
• Rates will Rise
• Advertising Marketing Home Warranties
• RESPA Transferred to the Bureau
• Still No GSE Solution in Sight

32
Conclusion

• What Can You Do?
• Make Compliance Your Top Priority
• Company wide, on every level
• System for employees to report problems to
  management
• Stay Informed
• Be ready for upcoming changes
• Continual Training
• Significant amount of new regulatory requirements
• Work with Integrity No Shortcuts
• Personal responsibility liability
• No second chances

33
An Overview and Understanding of The New CFPB
Rules
James (Jim) M. MilanoWEINER BRODSKY KIDER
PC1300 19th Street, NW, 5th FloorWashington, DC
20036Phone [phone] milano_at_thewbkfirm.com

• Washington, DC Dallas, TX Newport Beach,
  CA
• www.thewbkfirm.com