Subscribe to our InfoBytes Blog weekly newsletter and other publications for news affecting the financial services industry.
On August 27, the Kansas Office of the State Bank Commissioner extended its remote work guidance, previously covered here and here, for mortgage companies, mortgage loan originators, supervised loan licensees, credit services organizations, money transmitters, and credit notification registrants. Licensed or registered individuals and entities are permitted to work from their residences or a company designated location, provided certain requirements are met, through December 31, 2020.
On July 29, Freddie Mac updated its Covid-19 frequently asked questions regarding mortgage origination, underwriting, and loan eligibility for sellers. The update addresses questions regarding, among other things, (i) obtaining 2019 tax returns; (ii) borrower creditworthiness; (iii) construction conversion and renovation mortgages; and (iv) appraisal reports. Previous InfoBytes coverage on FAQ updates is available here.
On July 1, Fannie Mae and Freddie Mac updated its Covid-19 frequently asked questions regarding the underwriting and loan eligibility for sellers. Fannie Mae’s FAQs (previously discussed here) were updated to address questions regarding documentation and calculations related to self-employed income and variable income, including where borrowers experienced gaps of employment due to Covid-19. Freddie Mac’s origination, underwriting, and eligibility FAQs were updated to address questions regarding, among other things, pre-closing verifications, fluctuating employment earnings, self-employed income, determining income eligibility with additional analysis and documentation, documentation requirements, and Covid-19 business assistance, including proceeds from Paycheck Protection Program loans.
On June 11, the Kansas Office of the State Bank Commissioner extended its remote work guidance, previously covered here, for mortgage companies, mortgage loan originators, supervised loan licensees, credit services organizations, money transmitters, and credit notification registrants. Licensed or registered individuals and entities are permitted to work from their residences or a company designated location, provided certain requirements are met, through July 15, 2020.
South Carolina regulator updates guidance on working remotely and defers deadline for submitting the 2019 mortgage log
On May 28, the South Carolina Department of Consumer Affairs issued updated interim guidance (previously discussed here) regarding working remotely from unlicensed locations and the deadline for submission of the 2019 mortgage log. The updated interim guidance provides that, until July 1, 2020, licensed mortgage loan originators are permitted to work from home, whether in South Carolina or another state, even if the home is not a licensed branch. The guidance also notes the deferral of filing deadline for the 2019 mortgage log required of mortgage broker companies until June 1, 2020.
On May 22, the Idaho Department of Finance extended temporary work from home guidance previously issued to Idaho mortgage brokers and lenders, mortgage loan originators, regulated lenders, title lenders, payday lenders, and collection agency licensees and registrants. The original guidance, previously covered here, permits employees to work from home where the residence is not a licensed branch. The guidance is extended through September 1, 2020.
Washington Department of Financial Institutions extends guidance regarding remote work for mortgage loan originators
On May 7, the Washington Department of Financial Institutions issued interim regulatory guidance to licensed mortgage loan originators and companies that sponsor them relating to temporary remote work. The guidance extends earlier interim guidance permitting mortgage loan originators to work from home, previously covered here, until July 10, 2020.
On April 27, the Department of Veterans Affairs revised Circular 26-20-10, Lending Guidance for Borrowers Affected by Covid-19. The revisions provide that the VA may delegate responsibility to an approved lender to close loans automatically, and that any loan closed under this authority is guaranteed from the date of loan closing. The circular otherwise provides guidance for VA home loan borrowers impacted by Covid-19 and creates temporary measures for loan originating, closing and guarantee. Among other measures, the circular provides that furloughs and other income curtailments as a result of Covid-19 should not be considered a break in employment for underwriting purposes.
West Virginia amends mortgage loan originator definition; adjusts allowable final installment payment on mortgage loans
On March 25, the West Virginia governor signed SB 651, which amends the definition of a mortgage loan originator “with respect to retailers of manufactured or modular homes and their employees” under the West Virginia Safe Mortgage Licensing Act. Among other things, SB 651 states that retailers of manufactured or modular homes (or the retailers’ employees) do not qualify as a mortgage loan originators provided they meet certain criteria, including that they (i) provide written disclosures to consumers of “any corporate affiliation with any mortgage lender” (including “at least one unaffiliated mortgage lender,” if they do have a corporate affiliation); (ii) do not directly negotiate loan terms with consumers or mortgage lenders; and (iii) do not represent that they can perform the activities of a mortgage loan originator. The amendments take effect June 2.
Also on March 25, the governor signed HB 4411, which adjusts the allowable final installment payment on a mortgage loan to be “a lesser amount or no more than $5 greater than any previous payment installment.” This adjustment does not apply to “any mortgage modification or refinancing loan made in participation with and in compliance with the federal Making Homes Affordable program, or any other mortgage modification or refinancing loan eligible under any government sponsored enterprise requirements or funded through any federal or state program or litigation settlement.” The adjustment takes effect May 27.
On March 20, the Texas Department of Savings and Mortgage Lending issued a statement temporarily suspending any requirement that a physical office of a licensed mortgage entity be open to the public during posted normal business hours. Additionally, licensed MLOs may work from home or another remote location, as long as (i) strict security of information is maintained; (ii) all physical business records are kept at a licensed office; and (iii) consumers are not allowed to go to the MLO’s home.
- Jessica L. Pollet to discuss "Defining accurate credit reporting under the CARES Act during the pandemic consumer financial services" at the American Bar Association Business Law Virtual Section Meeting
- Jonice Gray Tucker to discuss "Driving to one-click: The new point of sale" at the American Bar Association Business Law Virtual Section Meeting
- Amanda R. Lawrence to discuss "New privacy legislation: Preparing for a major source of class action and enforcement activity going forward" at the American Conference Institute Consumer Finance Class Actions, Litigation & Government Enforcement Actions
- Daniel P. Stipano to discuss "Making customers whole: Trends in remediation and restitution expectations" at the American Bar Association Business Law Virtual Section Meeting
- Jonice Gray Tucker to discuss "Fairness gone viral: Fair lending considerations for financial institutions amid Covid-19" at the American Bar Association Business Law Virtual Section Meeting
- Daniel P. Stipano to discuss "High standards: Best practices for banking marijuana-related businesses" at the ACAMS AML & Anti-Financial Crime Conference
- Daniel R. Alonso to discuss "A look at how next level investigation teams operate in LatAm" at an RKA Worldwide webinar
- Daniel P. Stipano to discuss "Wait wait ... do tell me! Where the panelists answer to you" at the ACAMS AML & Anti-Financial Crime Conference
- Matthew P. Previn and Walter E. Zalenski to discuss "Is valid when made ... valid?" at the Women in Housing & Finance Partner Series webinar
- Warren W. Traiger and Caroline K. Eisner to discuss "CRA modernization" at CBA Live
- Sherry-Maria Safchuk and Lauren Frank to discuss "New CFPB interpretation on UDAAP" at a California Mortgage Bankers Association Mortgage Quality and Compliance Committee webinar
- Thomas A. Sporkin to discuss "Managing internal investigations and advanced government defense" at the Securities Enforcement Forum
- Jonice Gray Tucker to discuss "The future of fair lending" at the Mortgage Bankers Association Regulatory Compliance Conference
- Michelle L. Rogers to discuss "Major litigation" at the Mortgage Bankers Association Regulatory Compliance Conference
- Kathryn L. Ryan to discuss "Pandemic fallout – Navigating practical operational challenges" at the Mortgage Bankers Association Regulatory Compliance Conference
- Jonice Gray Tucker to discuss "Consumer financial services" at the Practising Law Institute Banking Law Institute