8 minute read
From the Desk of the Om-Bobs-man
From the Desk of the ‘Om-Bobs-man’ "Om-Bobs-Man" is the nickname Bob Niemi earned while serving as the NMLS Ombudsman in 2014 and 2015. Bob is a former Ohio state regulator and now an expert consultant on NMLS and state regulatory matters. Bob can be reached at BNiemi@Bradley.com.
Deadlines, Deadlines, Deadlines…
November is the month we give thanks and remember our Veterans; it is also the month of renewals in the NMLS. For those who are actively deployed, many states have processes and regulations in place to provide benefits to active duty and veterans of the United States Armed Forces and National Guard of any state. More details on those programs can be found by searching on the NMLS Resource Center or checking with your home state agency.
For the rest of us, November is NMLS Renewal Period and lasts from one to ninety days and sometimes more. While the most common timeframe for renewals is from November 1st through December 31st, there are a few states with shorter periods. There are also a few other states with stricter guidelines for renewals.
Condensed Renewals
If you do business in West Virginia, hopefully your renewal is already in process. While not a hard deadline, renewal requests submitted after November 2nd may not be approved before the end of the year. The challenge to a late renewal is that if the renewal has not been approved, all activity in the New Year must cease until the renewal has been approved.
Similar issues will impact companies in Idaho, Iowa, Kansas, Wyoming, and some Vermont mortgage licenses. This is not an exclusive list. Their December 1st submission date is to guarantee a review prior to year-end to prevent a cessation in mortgage activities until the license renewal is approved. But note that the Kansas renewal deadline is by statute. So, please double check that renewal.
December 15th brings more states into the mix with Minnesota and Washington. Some states like Wyoming and Minnesota do not allow a company to operate in the New Year even if the renewal request was submitted within the renewal period but not approved prior to the end of the year. No one wants to send the email notification that your originators must cease all business activities in a state until the renewal has been approved. Yes, that is another reason to double check that your renewals have all been requested.
Reinstatement
Some states do offer reinstatement with added fees, but not all states. Iowa has a December 1st submission, and late submissions must be approved by December 31st for lenders to operate in the New Year. Further, there is no reinstatement and companies who fail to submit a renewal by December 31st are moved to terminated-expired status. These companies would begin with a new license submission. But no one is picking on Iowa since similar circumstances exist in Idaho, Illinois, New Hampshire, South Dakota, and West Virginia.
Now, if you believe that this is enough already, consider your continuing education deadlines. Georgia’s state specific education must be completed by Halloween. Washington, D.C. and West Virginia provide one more day to November 1st. There are five more states that have December 1st for their education completion deadline.
Give thanks that all this is available on the NMLS Annual Renewal Page at www. nationsidelicensing.org. MBM
REGULATORY CORNER
FEDERAL COMPLIANCE
FLOOD PROGRAM EXTENDED
The president signed H.R. 8337 on October 1, 2020. Section 146 of the "Continuing Appropriations Act, 2021 and Other Extensions Act" postponed the expiration of the National Flood Insurance Program for one year, to September 30, 2021. Language was included to bridge the gap between the September 30, 2020, expiration date and the signing date.
CFPB ISSUES RESPA SECTION 8 FAQS
The CFPB published guidance on October 8, 2020 in the form of FAQs on RESPA Section 8 topics. The FAQs, which the CFPB issued as a Compliance Aid, provide an overview of the provisions of RESPA Section 8 and respective Regulation X sections, and address the application of certain provisions to common scenarios described in CFPB inquiries involving gifts and promotional activities, and marketing services agreements (MSAs).
The CFPB also said it has determined that Compliance Bulletin 2015-05, "RESPA Compliance and Marketing Services Agreements," does not provide the regulatory clarity needed on how to comply with RESPA and Regulation X and therefore is rescinding it. The CFPB’s rescission of the Bulletin does not mean that MSAs are per se or presumptively legal. Whether a particular MSA violates RESPA Section 8 will depend on specific facts and circumstances, including the details of how the MSA is structured and implemented. MSAs remain subject to scrutiny.
On October 14, 2020, the FHA announced the availability of the first module of its FHA Catalyst technology platform for Multifamily lenders doing business with FHA. The module will allow eligible lenders to electronically submit applications for FHA insurance on multifamily properties. The new capability supports lenders in providing FHA-insured mortgage financing while working remotely because of the COVID-19 pandemic.
FRB PUBLISHED CRA ANPR
The Federal Reserve Board published [85 FR 66410] in the October 19, 2020 Federal Register its September 21 Advance Notice of Proposed Rulemaking to solicit public input regarding modernizing the Board's Community Reinvestment Act regulatory and supervisory framework. Comments are due by February 16, 2021.
CFPB POSTS HMDA DATA REFERENCE CHART FOR 2021
On October 15, 2020, the CFPB posted the "Reportable HMDA Data: A Regulatory and Reporting Overview Reference Chart for HMDA Data Collected in 2021," which can be used as a reference tool for data points required to be collected, recorded, and reported under Regulation C, as amended by the HMDA Rules. Relevant regulation and commentary sections are provided for ease of reference. The chart also incorporates the information found in Section 4.2.2 of the 2021 Filing Instructions Guide and provides when to report not applicable or exempt, including the codes used for reporting not applicable or exempt from section 4 of the 2021 Filing Instructions Guide for ease of reference.
FHFA PROPOSED RULE FOR NEW ENTERPRISE PRODUCTS AND ACTIVITIES
The FHFA is seeking comments on a notice of proposed rulemaking that would require Fannie Mae and Freddie Mac to provide advance notice to FHFA of new activities and obtain prior approval before launching new products. The proposed rule would also establish revised criteria for determining whether a new activity requires notice to FHFA and for determining if that activity is a new product that merits public notice and comment. The proposed rule would replace the interim final rule that has been in effect since 2009.
The proposed rule’s requirements would also outline the process for FHFA review of a new activity and the timelines for approving a new product, including issuing a public notice and requesting public comment about a potential new product. Comments on the proposal will be accepted for 60 days following Federal Register publication.
FANNIE MAE AND FREDDIE MAC EXTENSION OF COVID-19 LOAN FLEXIBILITIES
The FHFA announced on October 19, 2020 that Fannie Mae and Freddie Mac will extend several of their loan origination flexibilities until the end of November, 2020. The changes are to ensure continued support for borrowers during the COVID-19 national emergency. The flexibilities were set to expire on October 31, 2020.
The extended flexibilities include: • Alternative appraisals on purchase and rate term refinance loans; • Alternative methods for documenting income and verifying employment before loan closing; and • Expanding the use of power of attorney to assist with loan closings.
FHA FORBEARANCE EXTENSION
On October 20, 2020, the FHA announced that it is extending the date for single family homeowners with FHA-insured mortgages to request an initial forbearance from their mortgage servicer to forbear their mortgage payments for up to six months. Homeowners experiencing a financial hardship as a result of the COVID-19 pandemic may now request an initial forbearance through December 31, 2020 (the deadline was previously October 30). The FHA requires mortgage servicers to: • Offer homeowners with FHA-insured mortgages mortgage payment forbearance when the homeowner requests it, with the option to extend the forbearance for up to a year in total. FHA does not require a lump sum payment at the end of the forbearance period. • Assess homeowners who receive COVID-19 forbearance for FHA's special
COVID-19 National Emergency Standalone Partial Claim before the end of the forbearance period. This program puts all suspended mortgage payment amounts owed into a junior lien, which is only repaid when the homeowner sells the home, refinances the mortgage, or the mortgage is otherwise extinguished. • Assess homeowners who are not eligible for the COVID-19 National Emergency
Standalone Partial Claim for one of FHA’s COVID-19 expanded home retention solutions announced on July 8, 2020.
CFPB FINAL RULE ON GSE PATCH EXTENSION
The CFPB issued a final rule on October 20, 2020 to extend the GSE Patch until the (yet to be established) mandatory compliance date of a final rule amending the General QM loan definition in Regulation Z. The GSE Patch was scheduled to expire on January 10, 2021. The CFPB is not amending the provision in Regulation Z stating that the GSE Patch will expire if the GSEs exit conservatorship.
The GSE Patch provides QM status to certain mortgage loans eligible for purchase or guarantee by either of the GSEs. GSE Patch loans are eligible for QM status even if the borrower's debt-to-income ratio exceeds 43 percent. The rule extending the GSE Patch will be effective 60 days after it is published in the Federal Register. MBM
