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Legislative and Regulatory Update

Introduction. Good morning

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Legislative and Regulatory Update

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    1. Legislative and Regulatory Update Francis Creighton Vice President – Chief Lobbyist Ken Markison Associate Vice President and Regulatory Counsel Mortgage Bankers Association National Fraud Issues Conference

    2. Introduction Good morning – Unparalleled crisis brings unparalleled reaction Fed, Treasury, HUD, FTC and the FHFA through the GSEs are exercising their authorities Congress and the states are enacting landmark legislation to increase authorities and change the regulatory paradigm Francis is our key legislative person, I’ll do the regs

    3. Key Regulations and Quasi-Rules HOEPA/HMDA RESPA Fed and NY AG – Appraisals FCRA/FACTA HASP/HMA Road Ahead RESPA TILA HASP/MHA Regulatory Reform Today I’ll Survey

    4. Home Ownership and Equity Protection Act (HOEPA)

    5. HOEPA/HMDA “HIGHER PRICED”

    6. Higher-Priced and HOEPA Covered Loan Prohibitions

    7. All Closed-End Mortgage Loans - Prohibitions

    8. Advertising

    9. HOEPA Take Aways

    10. New RESPA Rule Published by HUD as final rule on Monday, November 17 Prescribes new standardized GFE and HUD-1 required January 1, 2010 – Unclear how it effects pipeline Makes some rule changes, i.e., average cost pricing and technical changes effective January 16, 2008 Required use reopened following litigation. Comments due April 9

    11. GFE Spells out key loan terms & costs Standardized form Consolidates charges Comes with tolerances Changed circumstances exception Applies yield spread premiums to origination charges

    12. GFE Page 1

    13. GFE Page 2

    14. GFE Page 3 Instructions

    16. HUD-1 Also standardized form Redesigned to correspond to GFE Consolidates charges but Includes loan terms Comparison chart

    17. HUD-1 Settlement Statement

    18. HUD-1 Page 2

    19. HUD-1 page 3

    20. Comparison Chart

    21. Loan Terms

    22. RESPA Take Aways HUD and the Board now overlap Both describe terms, are provided at the same time and need to be coordinated RESPA implementation is required by January 1 of next year TILA disclosure rules will come soon after If we can land a man on the moon, can we get these two rules together?

    23. The Appraiser Issue Fed rules prohibit appraiser coercion for all loans December 2008, Attorney General Cuomo and GSEs entered Home Valuation Code of Conduct (HVCC) agreement to change appraisal practices Effective May 2009 Restricts ordering of appraisals Requires new firewalls Likely Congress may also act

    24. Fair and Accurate Transactions Act (FACTA)

    25. Legislation - HERA Last Summer, Congress enacted Housing and Economic Recovery Act (HERA) Major piece of legislation – Landmark in ordinary times - S. A. F. E. Act FHA Reform with new loan limits ( Increased in Stimulus Acts of 2008 and 2009) Mortgage Disclosure Improvement Act (MDIA) GSE Reform and much more

    26. S.A.F.E. Act - National Originator Licensing and Registration NMLSR - Establishes Nationwide Mortgage Licensing System and Registry comprehensive database operated by CSBS/AARMR Coverage – “Loan originators” who take applications and negotiate loans State Licensing of Originators - States are to enact licensing laws meeting minimum standards for state regulated loan originators in one year, two years if biennial legislature Minimum Standards – For state licensing and registry laws for “originators” include: Annual licensing and registration; Unique identifier; fingerprints and background checks: Demonstrated financial responsibility, character, and general fitness Minimum educational requirements and written examination Restrictions against licensees being issued to persons that have had license revoked, pled guilty or been convicted of a financial crime or breach of trust

    27. S.A.F.E. Act - Federal and HUD Roles Federal Registration of Originators - Federal financial regulators are to establish registration requirements for originators employed by federally regulated institutions Default System - For states failing to enact state law, HUD establishes backup licensing and registry system Progress - Numerous states are moving ahead with varying laws Information - Sharing among regulators and availability of loan originator employment history and disciplinary actions to consumers Big Job - Delay implementation?

    28. Recent Guidance – HASP/MHA New Administration plan to help homeowners Refinance Plan for Fannie Mae or Freddie Mac held or guaranteed loans Allows homeowners in these loans to refinance into a 15 year or 30 year fixed rate loan even if 105% LTV $75 billion Homeowner Stability Initiative for other loans Requires write down to 38% LTV Government matching to get LTV to 31% Other incentives to servicers and borrowers Details announced March 4, more to follow

    29. What’s Next

    30. Questions Thank you for your attention Questions??????

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