Are we completing our Good Faith Estimates (GFEs) correctly? This is a question that I frequently receive from credit unions even though we are almost two years removed from the required implementation of the new GFE. And as it turns out, many credit unions are still not completing them correctly. So, with the anniversary approaching, I thought now would be a good time to review some common mistakes made on a very common form. As the title of today’s post indicates, this is the beginning of a series of posts describing common mistakes and instructions on how to complete the GFE correctly.
Today’s common mistake: “Your Adjusted Origination Charges”
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And you thought worrying about the SAFE Act was over! Just in time for Halloween, it is time to start thinking about staying SAFE by renewing your registration on the NMLS Federal Registry. In case you forgot, the SAFE Act requires Mortgage Loan Originators (MLOs) and institution account holders (your credit union) to renew their registrations annually between November 1st and December 31st.
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Everyone knows that re-disclosing documents are a pain; however, most credit unions do a very good job of making sure that the documents are re-disclosed when required. Many credit unions over re-disclose certain documents even when they are not required to do so. One re-disclosure issue which I am seeing more frequently is the re-disclosure of the APR for mortgage transactions.
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For the first time in some while, I am going to blog about something other than recent or upcoming changes. Relieved? Based on what I have seen in credit unions, you shouldn’t be! There just so happens to be a nondescript paragraph within the Official Staff Interpretations of Regulation B that seems to frequently get overlooked by credit unions (and banks for that matter).
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That’s right…there is a new mortgage related advertising rule! Did you miss it? Based on the chatter I have been hearing, a lot of you have. For those of you who have no idea what I am talking about, here is what you need to know. Effective August 19, 2011, an FTC rule went into effect which prohibits misrepresentation in any advertisement relating to mortgage credit products and imposes record retention requirements.
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Merriam-Webster provides the following completely unrelated (and some would argue diabolically opposed) definitions to GARNISHMENTS:
An ornament; a useful accessory; something that lends grace or beauty; a manner or quality that adorns; one whose virtues or graces add luster to a place or society; the act of adorning or being adorned; or an embellishment.
OR
A legal summons or warning concerning the attachment of property to satisfy a debt; or a stoppage of a specified sum from wages to satisfy a creditor or a legal obligation.
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Ok, so it might not be worth celebrating, but it is certainly a momentous day! July 21st, is the effective date for many of the provisions contained within Dodd-Frank. The highlights of these provisions include:
- Regulation Z: Changes the maximum limit for consumer transactions from $25,000 to $50,000.
- Regulation B: Adds credit score information to adverse action notices.
- FCRA / FACT Act: Adds credit score information to risk based pricing notices.
- CFPB: Official start date of the Consumer Financial Protection Bureau.
- Regulation CC: Increases the amount of deposits made available for withdrawal by the next business day from $100 t0 $200.
Now that Dodd-Frank day has arrived, you may be asking yourself what is next? Well, you don’t have to look far from the list above. I have a feeling that the CFPB will be providing us with a lot of fun here before we know it!
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