You’re going to buy a home and you’ve gone to one of the many resources to pull a copy of your personal credit report, but is it the same as the credit report your lender will see? As far as the content, it probably is; as far as your credit scores, probably not. The scores you see on a personal credit report are just that - personal scores. The scores your lender will have will be different and most likely lower. The question remains, when is it ok for your lender to pull your credit report and do they need permission to do so?
When a consumer is considering getting a mortgage, the lender will normally pull a credit report prior to the actual application process for the purpose of getting them “pre-qualified.” Before a consumer actually writes a contract for a house the mortgage company wants to know ahead of time if the consumer will be able to qualify for a mortgage.
Due to regulatory laws this is the only reason a lender may pull a consumer’s credit report. They must have “permissible purpose,” to pull credit, which, in this case, is to qualify for a mortgage. A lender cannot pull credit reports on themselves, friends, family members, employees, etc., unless that person is actually trying to qualify for a mortgage.
The lender must also have the borrowers’ permission to pull a credit report. Normally this is done with written permission. There is a standard borrower authorization form that the borrower can sign that gives a lender permission to pull their credit. This permission must be dated either the same day or prior to the credit being pulled. Written permission is also the safest way to give permission for credit to be pulled as it creates written proof.
Permission can be given verbally but the lender must document thoroughly that verbal permission was given prior to pulling the credit report. At one time lenders would just jot down a note on a piece of paper that a verbal was given and put it in the file. While this could suffice it’s really not the best practice and is really not in keeping with industry standards. Trans Union and Equifax will accept a verbal authorization that is documented. Most lenders now have “certifications of verbal authorization” that are filled out by the loan officer that pulled the credit and include very detailed information regarding when and why the verbal was given as opposed to written authorization. Experian will only accept a verbal authorization if it has been captured by an audio recording.
After the credit report is pulled the lender may then provide a copy of that report to the consumer. Mortgage reports can contain additional information and disclosures that consumer-direct disclosures of credit reports do not contain. The report should be hand delivered to the borrower as this is the most secure method. There’s too much risk involved in emailing a consumer a copy of their credit report which could open the loan officer up to unwanted liabilities.
The fee for the credit report can also be paid for by the borrower and is the only fee that can be collected prior to receiving a receipt of a loan estimate. Also, it should be paid for using a credit or debit card and not by cash or check.
While a lender must follow due diligence when going through the process of approving a borrower for a loan it is equally important for the borrower to follow their own due diligence to ensure that the lender is following proper procedure and that mistakes are not being made. In the long run this will protect both the borrower and the lender.
By Mindy Leisure - Rescore Express Manager
On March 9th, Richey May hosted a webinar for independent mortgage lenders on the New York cyber security regulation, 23 NYCRR 500, which recently went into effect in an effort to protect the state’s financial services industry and consumers from the threat of cyber-attacks.
Presented by Mitch Tanenbaum of CyberCecurity, topics included entities covered by the regulation, required practices for covered entities, implementation timeline, impact to business processes, ongoing compliance requirements, and reporting.
You may have heard that MERS now requires all Third Party Reviewers to provide their electronic signature on the eAnnual Report and wondered whether First American will comply with this requirement. Yes – as always – First American will sign your eAnnual Report upon completion!
Starting this year MERSCORP Holdings, Inc. will require that all Third Party Reviewers provide their electronic signature on your 2017 Annual Report. Engagement letters in lieu of e-signature will no longer be permitted.
First American will provide e-signatures on your e-MERS Annual Report.
It's official! 10 members of The Mortgage Collaborative have been listed as the '50 Best Companies to Work For', as reported by Mortgage Executive Magazine.
TMC is proud to have these members as a part of our Network and we offer our congratulations!
To view the full list of companies recognized, click here.
The case of PHH Corporation vs. Consumer Financial Protection Bureau just took a turn that is simultaneously shocking and completely expected at the same time.
Recently, the United States government began to give off indications that it might be switching sides in the landmark battle between the CFPB and PHH, signaling that the Trump administration would not be as supportive of the CFPB as the Obama administration had been.
And Friday, that’s exactly what happened, as the United States government filed an amicus brief in the PHH vs. CFPB case, asking the court to rule the CFPB’s leadership structure unconstitutional and grant President Donald Trump the authority to fire the CFPB director at will.
Under the CFPB’s current structure, the director serves a five-year term and may only be terminated by the president for “inefficiency, neglect of duty, or malfeasance in office.”
The court’s previous ruling in the CFPB-PHH case made the director removable at will, but the CFPB is fighting that ruling, which led the Trump administration to take this unusual, but telegraphed tactic.
The case began with CFPB Director Richard Cordray tacking a $103 million increase onto a $6 million fine initially levied against PHH for allegedly illegally referring consumers to mortgage insurers in exchange for kickbacks.
PHH fought the fine, arguing that Cordray did not have the authority to increase the fine. The case made its way to the Court of Appeals, which ruled in October that the CFPB’s leadership structure was unconstitutional in a 2-1 vote. The ruling also vacated the additional $100 million fine against PHH.
The CFPB fought the ruling, asking the court to rehear the case en banc, meaning that it wanted the entire court to hear the case, rather than the three judges who ruled on the case in October.
And last month, the full Court of Appeals ruled that it would rehear the case, giving the CFPB the opportunity to defend its constitutionality.
But the government began tipping its hand recently, when a recent filing from the Solicitor General appeared to indicate that the government now supports PHH.
Friday’s filing confirmed that fact.
In the filing, the Department of Justice, arguing on behalf of the U.S., states that the CFPB’s structure is a violation of the separation of powers and should be ruled unconstitutional.
The DOJ’s filing is limited to the issue of whether the CFPB director is removable for cause or not.
“In sum, a removal restriction for the Director of the CFPB is an unwarranted limitation on the
President’s executive power,” the DOJ argues in the filing.
But the DOJ does not ask for the abolishment of the CFPB, as PHH did in a recent filing.
“The panel correctly concluded that the proper remedy for the constitutional violation is to sever the provision limiting the President’s authority to remove the CFPB’s Director, not to declare the entire agency and its operations unconstitutional,” the DOJ states.
But the CFPB director should be removable by the president, the DOJ argues.
“In, in our view, the panel correctly applied severability principles and therefore properly struck down only the for-cause removal restrictions,” the DOJ states in reference to the Court of Appeals earlier ruling.
The government’s decision to flip sides has the full support of House Financial Services Committee Chairman Jeb Hensarling, R-TX, who issued the following statement on Friday afternoon:
“Republicans have said for years that the Bureau is unconstitutionally structured. Its lack of accountability and the unparalleled authority placed in the hands of the Bureau’s unaccountable sole director make the CFPB arguably the most powerful and least accountable bureaucracy in American history. Owing to its unconstitutional structure, the Bureau’s sole unaccountable director, unlike bipartisan commissions, can act unilaterally to eliminate access to credit options and increase consumer costs. In addition, the Bureau does not recognize core constitutional principles like the right to due process. Instead, it relies almost exclusively on its vague or undefined enforcement authority to practice regulation by enforcement. The Bureau’s consumer protection mission is important, but no government agency – no matter how well-intentioned – should be able to evade common sense checks and balances that are necessary for accountability. I applaud the Department of Justice for recognizing this unconstitutional CFPB must not stand and must not continue to harm the very consumers it is supposed to protect.”
To read the DOJ’s filing in full, click here.
Article by Ben Lane, Senior Financial Reporter for HousingWire.
MBSQuoteline has put together some enticing offers for TMC Members to take advantage of their services. The real time market updates and in-depth, easy to comprehend analysis on the how's and why's of market moves are not only a key resource to secondary and capital markets teams, but a vital resource to production teams and originators on the move!
Originators need to know when changing market conditions may negatively impact a customer’s experience with your company, and MBSQuoteline is the tool that you can empower your originators with to manage this risk, stay in sync with secondary and keep their referral partners happy.
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Don't forget, TMC Members qualify for a 14-day FREE trial to try out MBSQuoteline!
Two of The Mortgage Collaborative's best-in-class organizations have come together on a new business agreement!
Centennial Lending Group has recently added Envoy Mortgage's Correspondent Lending Division to their preferred investor base. "We are excited to partner with Sue Meitner and her team at CLG. Envoy's experience and Centennial Lending Group's reputation should create a strong partnership for a long time to come," said Envoy Correspondent SVP - National Sales Manager, Todd Potter, CMB.
We knew we were on to something shortly into our first Collaboration Lab ever this past January, hosted by Alterra Home Loans CEO Jason Madiedo at his corporate offices in Las Vegas, NV.
Here’s a link to a video highlighting the first Lab.
We wanted to roll the Labs out to our Members right after that first one, then decided to do it in person at our Winter Conference in Scottsdale. Just two weeks later, we’ve created our second, third, and fourth Labs … and are working on the fifth. We’re working with our initial Lab participants on their second meeting. And we’ve fielded all sorts of inquiries from prospective TMC Lender Members and interested new Members that we’re trying to find the right partner companies and dates for.
The concept is simple - TMC forms a Lab group consisting of the CEO's of 4-5 similarly sized TMC Lender Member companies, one of whom serves as the host at their offices. Our team facilitates the execution of a mutual NDA, the collection of a set of defined benchmarking metrics, and all of the planning and communication related to the Lab and the agenda.
Day one starts with lunch, an afternoon of the CEO's getting to know one another and their companies better, and a dinner reception that evening. Day two sees the CEO's take a deeper dive inside their companies, business models, operating metrics, and current and future strategic initiatives.
The participants of our first Lab walked away with very actionable intelligence, a firm sense of the strengths and weaknesses of their operations, and a close bond with the other Lab attendees.
San Diego, CA – March 14, 2017 – The Mortgage Collaborative, the nation’s only independent mortgage cooperative, announced today that the 100th lender member joined the organization, a milestone reached following their recent Winter Lender Member Conference in Scottsdale, AZ. This continues the steady growth that The Collaborative has achieved adding thirty lender members in the last four months.
“Reaching the 100 lender member milestone is a seminal moment for our network,” said Rich Swerbinsky, EVP of National Sales & Strategic Alliances. “The addition of these companies increases the aggregate origination volume of The Mortgage Collaborative’s lender members to over $150 billion”
“The Mortgage Collaborative also unveiled “The Collaboration Lab” at their Winter Conference in Scottsdale. It’s an intimate relationship building initiative that focuses on benchmarking and problem solving, receiving rave reviews from our record number of attendees.” said David G. Kittle, TMC’s Vice Chairman and President. “The value proposition delivered by Rich and our team is clearly being recognized by our preferred partners and lender members”.
“I could not be more proud of the success of the Winter Lender Member Conference and our sustained growth,” Kittle said.
The cooperative network also released details about recently announced dates and locations for their next two Lender Member Conferences, which will be held from August 20-23, 2017 in Nashville, TN and February 11-14, 2018 in San Diego, CA. The conferences provide The Collaborative’s lender members have a unique opportunity to interact with top industry leaders and to attend and participate in a number of powerful compelling educational and peer-to-peer networking sessions. Details on their recent and upcoming conferences can be found at www.mortgagecollaborative.com.
About The Mortgage Collaborative
Based in San Diego, CA, The Mortgage Collaborative was founded in 2013 to empower mortgage lenders across the country with better financial execution, reduced costs, enhanced expertise, improved compliance, and to help its members access the dynamic and changing consumer base in America. The association is managed by its founding members: John Robbins, CMB; David Kittle, CMB; Gary Acosta, CEO of the National Association of Hispanic Real Estate Professionals (NAHREP); and Jim Park, former chair of the Asian Real Estate Association of America (AREAA). Robbins and Kittle are former chairmen of the Mortgage Bankers Association of America (MBA). For more information, visit: www.mortgagecollaborative.com.
Look up rule anywhere.
The Rule Tool is now optimized for your smartphone on either iPhone (Apple) or Android devices (e.g. Samsung). You don't have to wait to get back to the office to look up an agency or investor rule. The Rule Tool is with you wherever you go!
Mobile-Enabled, Not an App
The Rule Tool is not an app that you download from iTunes or the Google Store. To access on your smart phone, simply launch your web browser like Safari or Chrome and go to www.theruletool.com to log in just like you do from a computer.
Get it on Your Home Screen
Just because it's not an app doesn't mean The Rule Tool can't be on your home screen. Go online and bookmark The Rule Tool can't be on your home screen. Go online and bookmark The Rule Tool in your mobile browser (Safari or Chrome) and drag it to your home screen to add it for one-click access.
Here are step-by-step instructions from the HowToGeek blog for both iPhone & Android smartphones.
TMC - Chief Operating Officer
President/CEO - Pulte Financial Services