HUD announced today a delay in "HUD ENFORCEMENT" on the new RESPA Rule which goes into effect on Jan. 1st, 2010 on FHA loans. We need to highlight the fact that only HUD Enforcement of the new RESPA rule has been delayed for 120 days on FHA loans. Civil litigation on the new RESPA Rule goes into effect on Jan. 1st, 2010 and therefore is not delayed.
We applaud HUD for delaying enforcement of the new rule for 4 months it still exposes companies that do not implement the new changes to potential civil litigation issues for not complying with the new rule.
Another RESPA attorney said it best: "Better pin on your badge and strap on your gun. Looks like HUD will look to the plaintiff's bar to bring the heat in the first 4 months."
According to FDIC they are not advising the Banks to rest before implementing a program. The cost of not implementing a program includes a variety of penalties and opens the financial institution to civil penalties.
You
Have a balanced organization that is in harmony with your goals. You have competitors, economic turbulence, and an uncertain regulatory environment. Our software will help you regain the safe and profitable high ground. You will be able to produce loans and focus on your true business.
Workflow
You must give pre-application disclosures before you start collecting data. You must re-disclose your TIL if out of tolerance 3 to 7 days before closing. Are you ready to lock your loans for 10 days at the time of initial disclosure? These are just a few of the regulatory issues that you must solve. Do you have your workflow in place to protect your organization?
Data
The data for your fees and charges on a loan must be explicitly controlled. Be sure that you know when and how a fee or charge is handled. Is it done on paper? Is it done in software? Is it done between two or more pieces of software? Is it done with paper and software? The data for fees and charges must be properly handled and disclosed under strict rules in the new regulatory changes.
The data that impacts changed circumstances generally is not the data about fees and charges. This changed circumstance data allows for a re-disclosure but does not require a new disclosure if the fees and charges do not change. Keeping track of the data changes in the changed circumstances will become important.
Risk
Maximizing your profit means maximizing your loan volume to the risk level that your capital and structure will allow. Your risk analysis must be available 24/7/365. Your forms must respond to this analysis. Your risk analysis must fit your lending areas. Your fees and charges must fit the risk. Market, credit and collateral risk factors must be managed within regulatory requirements in play within a given circumstance.
Access
To create your products you need information. This information comes from many sources. That information comes from inside and outside your organization. You need to connect with those sources of information. Being happier and spending more time communicating is not the answer. All the sources want to be involved you just need to make is easy and safe for them to do so. The economic and regulatory waters are rough.