Multistate Regulatory Initiatives Mark Pearce President, American - - PowerPoint PPT Presentation

Multistate Regulatory Initiatives

Mark Pearce President, American Association of Residential Mortgage Regulators Residential Mortgage Regulators Chief Deputy Commissioner of Banks State of North Carolina State of North Carolina

LICENSING

State Licensing of Non-banks

May 2010

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States in NMLS

60 45 49 50 60 22 32 30 40 7 13 22 10 20 7 10

J 08 J l 08 J 09 O t 09 J 10 J l 10

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Jan‐08 Jul‐08 Jan‐09 Oct‐09 Jan‐10 Jul‐10

NMLS Population

Company, 13,531 Branch, 16,446 , Individual,

May 2010

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89,887

State SAFE Legislation

Montana Oregon Minnesota Washington North Dakota Maine Vermont Utah Idaho Nevada Oregon Iowa Wyoming Nebraska South Dakota Illi i Ohio Wisconsin Indiana Michigan Pennsylvania New Jersey New York New Hampshire Connecticut Delaware Massachusetts Rhode Island Utah California (DFI, DOC & DRE) Arizona Colorado Kansas New Mexico Missouri Oklahoma Arkansas Illinois Virginia (DFI & SOS) Kentucky Tennessee

North Carolina South Carolina West Virginia

Maryland (DFI & DRE) District of Columbia Texas (OCCC & SML) New Mexico Louisiana Hawaii

Florida

Georgia Alabama

Mississippi

Carolina

Legislation passed Legislation pending No legislation

Alaska

Florida

Puerto Rico Virgin Islands

May 2010

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Major SAFE Act Issues

• Boundaries of Licensure Requirements

– Non-profits (Habitat) C t t d it d – Contract underwriters and processors – Servicers and loss mitigation staff – Loan modification companies – Loan modification companies – De minimis exceptions for various professions or transactions

• Avoiding new regulatory gaps in interpretations of

SAFE Act among federal regulators

– Example: Definition of “employee” for non-bank licensing and bank registration

May 2010

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Multistate Examination and

EXAMINATION AND

Enforcement

EXAMINATION AND ENFORCEMENT

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Cooperative Protocol

Washington Maine Montana Idaho Oregon Iowa Wyoming Minnesota South Dakota North Dakota Wisconsin Michigan P l i New York Vermont New Hampshire Connecticut Massachusetts Rhode Island Utah California Nevada Iowa Colorado Kansas Missouri Nebraska Illinois DFI/DOB Ohio Virginia Indiana DFI/SOS Kentucky Pennsylvania

North C li West Virginia

New Jersey Maryland Delaware District of Columbia Texas Arizona New Mexico Oklahoma Arkansas Hawaii Georgia Alabama Mississippi Tennessee

Carolina South Carolina

Alaska Texas OCCC/SML Louisiana

Florida

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Puerto Rico

2008 Agreement Ratified 2009

The MMC

• Multistate Mortgage Committee

– Composed of 10 State representatives appointed by AARMR and CSBS AARMR and CSBS – Identify largest (and most multi-state) non-bank mortgage companies – Establish examination schedule, common protocol, and multistate examination teams T i ti l t d ith i ht t d – Two examinations completed with eight more expected by end of 2010 – First public report available on CSBS website: First public report available on CSBS website: http://www.csbs.org/Content/NavigationMenu/Home/20 09MMCREPORTTOSTATEREGULATORSFinal.pdf

May 2010

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Increased Use of Data

• NMLS annual call report

– Enables risk profiles to assist MMC examination priorities priorities

• Loan-level data through RegulatorConnect

– NC has pilot tested automated compliance review of – NC has pilot tested automated compliance review of loan-level tapes beginning mid-2009 – PA and WA and other regulators notifying licensees of expectations regarding loan-level data capabilities – Integration with lenders’ LOS systems to increase consistency and reduce compliance burdens consistency and reduce compliance burdens

May 2010

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Multistate Enforcement

• Taylor Bean & Whitaker (June 2009)

– Nontraditional underwriting of 2006 loan book 14 St t l t ti i ti – 14 State regulators participating – $9 million settlement, loan review, improved controls

• CitiFinancial (March 2010)
• CitiFinancial (March 2010)

– Failure to report loans to HMDA – 35 State regulators participating 35 State regulators participating – $1.2 mil settlement, improved controls, fair lending review

May 2010

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Multistate Foreclosure Prevention

FORECLOSURE PREVENTION

Efforts

FORECLOSURE PREVENTION

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SFPWG

• State Foreclosure Prevention Working Group

– Close partnership with State Attorneys General M t ith 20 l t i f b i t – Met with 20 largest servicers of subprime mortgage loans in Fall 2007 – Two years of data collection from 13 servicers (non- Two years of data collection from 13 servicers (non banks’ active and legacy portfolios) – Four public reports, available on CSBS’ website: htt // b /C t t/N i ti M /H /StF http://www.csbs.org/Content/NavigationMenu/Home/StF

• reclosureMain.htm

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Loss mitigation gap

1 800 1,400 1,600 1,800

• usands

1,000 1,200 , Tho 400 600 800 200 400 Oct 07 Dec 07 Feb 08 Apr 08 Jun 08 Aug 08 Oct 08 Dec 08 Feb 09 Apr 09 Jun 09 Aug 09 Oct 09 Dec 09 Feb 10 Seriously Delinquent Loans Loss Mitigations in Process

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y q g

Principal reductions rare

80% 60% 70% 80% 40% 50% 60% 10% 20% 30% 0% 10% 07 07 07 08 08 08 08 08 08 08 08 08 08 08 08 09 09 09 09 09 09 09 09 09 09 09 09 10 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Principal Reduction Payment Reduction

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Foreclosures to come…

2 000 1,600 2,000

• usands

1,200 Tho 800 400 Oct 07 Dec 07 Feb 08 Apr 08 Jun 08 Aug 08 Oct 08 Dec 08 Feb 09 Apr 09 Jun 09 Aug 09 Oct 09 Dec 09 Feb 09

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Foreclosed In Foreclosure Seriously Delinquent

NORTH CAROLINA

North Carolina Initiatives

NORTH CAROLINA INITIATIVES

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Foreclosure Prevention

• State Home Foreclosure Prevention Project

– Servicers required to notify homeowners and State court system 45 days in advance of foreclosure filing for court system 45 days in advance of foreclosure filing for certain subprime loans – NCCOB manages outreach effort to connect seriously delinquent homeowners to one of 34 non-profit housing counseling agencies NCCOB provides “back office” support on “hard cases” – NCCOB provides back office support on hard cases – Results since implementation in November 2008

• 10,000 homeowners received foreclosure prevention

p counseling

• 4,000 homeowners able to avoid foreclosure
• $350 million in economic benefits to investors and neighboring

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$350 million in economic benefits to investors and neighboring property owners

Recent Rulemaking

• Foreclosure and Servicing Rules

– Rule 702: Communications Rule R l 703 F l H ld R l – Rule 703: Foreclosure Hold Rule

• Origination Practices rules currently “on hold” for

further development further development

– Proposed Rule 601 related to broker compensation – Proposed Rule 602 related to lenders affiliated with Proposed Rule 602 related to lenders affiliated with homebuilders – Proposed Rule 603 related to early disclosures for standard mortgage products

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Current NC Concerns

• Non-bona fide discount points
• Compliance with FHA guidelines and

i t requirements

• Origination practices with affiliated manufactured

and traditional homeb ilders and traditional homebuilders

• Net branching and weak supervision

Abilit f i t ff ti l i t

• Ability of servicers to effectively assist

homeowners seeking loss mitigation assistance M t f d

• Mortgage fraud
• Reverse mortgage lending

May 2010

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