From the Editor
BY IVANNA C. SUKKAR, EDITOR
AFTER A YEAR OF ANTICIPATION, THE CONSUMER FINANCIAL PROTECTION BUREAU
(CFPB) TAKES THE REINS LATER THIS MONTH. AND ALTHOUGH IT HASN’T OFFI-
CIALLY BEEN IN CHARGE, THE BUREAU HAS BEEN PAVING THE WAY FOR NUMEROUS
CHANGES MANDATED BY THE DODD-FRANK ACT THESE PAST FEW MONTHS.
This past May, the bureau put two draft mortgage-disclosure forms up for industry and consumer comment at its website,
consumerfinance.gov/knowbeforeyouowe. The goal is to combine the good-faith estimate and Truth in Lending disclosure into one clear, concise form. In
this month’s FinePrint column (Page 16), columnist Richard Smith discusses the industry’s
response to these draft disclosure forms.
It’s important for mortgage originators to make their voices and opinions heard, and by requesting comments on the draft disclosure forms this past May, the CFPB indicated that it welcomes these opinions. After all, mortgage originators are on the front lines with the consumers
who the revised form intends to benefit.
In addition to ensuring that clients understand what fees and terms are associated with their
mortgage, it’s also more important than ever for originators to ensure borrowers will qualify
for a loan from the outset. Lenders’ underwriting guidelines have changed dramatically, and
underwriters may be less forgiving of errors or omissions in loan applications.
This month’s Scotsman Guide tackles some under writing issues you may face and offers tips
for ensuring you have all your bases covered when it comes to your clients’ loan applications.
Professional Mortgage Consulting’s Rich Leffler offers five tips for making loan applications
underwriter-friendly on Page 24. And on Page 40, Scott M. Cole of Clearwater Mortgage emphasizes the importance of five C’s — credit, capital, capacity, collateral and compliance — in
helping avoid under writing pitfalls.
As part of the underwriting process, lenders will examine borrowers’ home-insurance policies.
As evidenced by recent events in the South and the Midwest, it’s important to know whether
your client lives in a flood zone — and to know how flood-map and related insurance changes
affect their policies. Greg Holmes from Credit Plus Inc. discusses the Federal Emergency Management Agency’s map modernization revisions and notification requirements on Page 21.
With a new mortgage-industry regulator taking charge and overseeing everything from loan
origination through loan servicing, it’s a good idea to stay on top of any changes and continue
to advocate for your clients’ best interests.
… in August’s Scotsman Guide
to your business, and vice
property and investment
… and much more.
Online? Check out current and past editions
of Scotsman Guide at scotsmanguide.com.
Professionals making a
This past December, Supreme Lending raised
money for and donated gifts to 24 at-risk
elementary-age children from Dallas’ Buckner
Children’s Home. Lisa Perkins, project manager for Supreme Lending, led the project.
Employees chose gifts from the children’s
wish lists and also raised $2,000 for additional gifts via an office fundraiser. “The looks
on [the children’s] faces was total amazement,” Perkins says. “To me, that’s what
Christmas is about — it was the most rewarding thing I’ve ever seen.”
—To learn more, read the rest of this story at
Does your company give back to the community?
To share your story, e-mail helpinghands@
NEWS FROM THE INDUSTRY AND ABROAD
Foreclosure sales till play large role IRVINE, Calif. — More than a quarter of U.S. home sales this past first quarter involved properties in some stage of fore- closure, Realty Trac reported. The company said 28 percent of residential properties sold in the quarter involved homes in distress — either sold at an auction, in default or owned by a bank. The number is slightly higher than the fourth quarter of 2010, when 27 percent of homes sold were homes in distress. Realty Trac also reported that U.S. banks and lenders own 872,000 homes.
Home prices and sales
U.S. home prices dropped 4.2 percent this past first quarter
compared to the fourth quarter of 2010, according to the
S&P/Case-Shiller Home Price Index.
Prices in the first quarter fell 5.1 percent compared with the
same quarter of 2010. Nationally, prices were back to the
levels of mid-2002.
“[May’s] report is marked by the confirmation of a double-dip in home prices across much of the nation,” index committee chairman David Blitzer said.
Meanwhile, the Federal Housing Finance Agency (FHFA),
which tracks prices for homes with mortgages backed by
Fannie Mae and Freddie Mac, said prices fell 5. 5 percent from
the first quarter of 2010 to the same three months of 2011.
Also, sales of new single-family homes rose in April from
March but remain far below sales from 12 months earlier,
the U.S. Commerce Department reported. Pending U.S.
home sales declined 11. 6 percent in April after two months
of gains, the National Association of Realtors reported.
FHFA House Price Index: July 21
New-home sales: July 26
S&P/Case-Shiller Home Price Index: July 26
Pending home sales: July 28
plague baby boomers
NEW YORK — Surveys show significant numbers of U.S.
baby boomers are nearing retirement with serious financial
The 2010 Retirement Readiness Ratings survey taken by
the Employee Benefit Research Institute found 45 percent
of baby boomers could potentially run short of funds during
their retirement years, USA Today reported.
California investigates servicer
SACRAMENTO, Calif. — California’s Attorney General, Kamala Harris, said her office would investigate a Florida firm
that processed thousands of foreclosure cases for lenders.
The company, Lender Processing Services Inc. of Jacksonville,
Fla., handled paper work for half of the mortgages in the United States, Harris said and The Los Angeles Times reported.
The state is investigating whether the firm rushed its foreclosure processing to the point that its staff was signing
documents so quickly they could not have understood or
even read the paper work they were signing.
© 2011 United Press International. All rights reserved.
WASHINGTON, D.C. — Whistle-blowers who help U.S.
regulators find Wall Street skullduggery could get as much
as 30 percent of the money collected under rules announced in May.
The Securities and Exchange Commission (SEC) approved
a change advocated by President Barack Obama to encourage reports of wrongdoing in the financial world, The
Washington Post reported. Under the rules, whistle-blowers
could get anywhere from 10 percent to 30 percent of the
money collected by the SEC.