The definition of insanity: doing the same things over and over and expecting different results. Welcome to the mortgage business! Mortgage company owners and recruiters often entice new Mortgage Loan Originators (MLOs) into the industry with the allure of minimal entry requirements. However, this approach frequently leads to a puzzling outcome: these new entrants struggle to succeed. The critical question arises: where is the emphasis on truly understanding the mortgage business? Beyond the basics of …
On October 13, 2022 the Federal Department of Labor published findings in Vol. 87, No. 197 of the Federal Register. The W-2/1099 controversary hits many businesses. As stated in previous posts, there is no special 1099 consideration for mortgage loan originators. Regardless of which state you work in or which type of employer your work for, Mortgage Loan Originators are required to have their income reported on IRS Form W-2. There are many companies that …
The overlap between federal and state laws and regulations becomes very apparent once there is an examination and/or an enforcement action. With COVID dominating our work environment over the past two years, not many audits or exams were scheduled by state regulators. That is all about to change. They are way behind and will begin the process of catching up sooner than you may be ready for. In many cases where mortgage companies get caught …
With the new URLA behind us…along comes the next major change in residential lending. Fannie Mae and Freddie Mac (aka the GSEs) have provided an update on the new URAR. Yes, the Uniform Residential Appraisal Report is undergoing some major changes. Here are just a few highlights: Input was gathered from 107 stakeholders across the industry in designing the new form. The key benefits of the new form are: Dynamic output with commentary placed within each …
With rates going up, refinance volume quickly heading south and originators looking for the next shiny thing, we are bound to see movement in the industry. That means mergers, buyouts and some companies closing. Migrating originators can be a tricky challenge for the next employer. There are two issues that may surface; who owns the customer and how were the originators compensated? I’ll save the former for another time. Last week I received a call …
Real estate transactions are the easiest way to launder money due to the size of the transactions and the amount of money that can be “cleaned”. All financial institutions are required to comply with the Bank Secrecy Act. Money laundering may also involve tax fraud as well as other potential crimes. All “financial institutions” must comply. According to the Bank Secrecy Act, a “financial institution” includes an exhaustive list of entities, including but not limited to: …
Money laundering is a huge problem for financial institutions and monitoring compliance and reporting is a challenge. As I read through FinCEN’s recent announcement, it became clear…the law is not really clear! Because real estate transactions are large in dollars, they are one of the easiest places to “clean up the money.” If you think Anti-Money Laundering regulations are vague or too complicated, now is your chance to help clarify how current regulations may be …
Recently a mortgage loan originator in another state contacted me for help. He was stuck with an underwriter and was challenged by how to calculate the self employment income. In that conversation he told me how helpful it would be to originators to have a “loan advisor” to consult with. He encouraged me to set up Advisory Sessions and they are now available to any originator who knows the value of time. In addition to …
Why the two tier system anyway? Do consumers realize the difference? For the sake of full disclosure, my business is education. I am a mortgage educator. I write, record and instruct courses for depository and non-depository originators alike. Their job is the same! One could reasonably argue that I have an agenda; I earn my living on education. Does that make the argument for all originators to be educated any less valid? In 2007, I …
April 29, 2020 – The CFPB issued an Interpretive Rule today titled: Application of Certain Provisions in the TILA-RESPA Integrated Disclosure Rule and Regulation Z Right of Rescission Rules in Light of the COVID-19 Pandemic. The rule allows for COVID-19 to be a “financial emergency reason for borrowers to WAIVE the TRID closing waiting period and the three-day right of rescission. “The Bureau understands that the COVID-19 pandemic could pose temporary business disruptions and challenges …