Hi, everyone. Today I wanna give you a reminder about the request for information from the CFPB regarding the mortgage disclosures. Everyone in the industry should be jumping on this. So far, I see only 82 comments have been posted, and they’re fascinating to read, to hear how much from the title industry is being brought up as far as their perspective on what should be changed, and lenders need to get their act together to get these disclosures out better. I don’t find anyone in there so far, and I’m still digesting through all of it who has proposed what we are proposing here, which is that the right of rescission for refinance transactions is actually just rescind that extra post-consummation waiting period. We talked about it on the show last week. I’m continuing to do my research, and will be talking about this again next show. But right now we’re focused on questions seven and nine within the RFI proposal. So in question seven, it’s asking what guidance or model form could the CFPB issue to better facilitate the consumer’s decision to waive the statutorily required waiting period for a bona fide personal financial emergency. So in layman’s terms, that means how can they make this easier for a customer to waive it, and what kind of form might be helpful? Because today they don’t give us any guidance on a form. We really have just have to resort to having the borrower put it in their own words. Definitely loan officers are assisting the borrowers, and closers and everyone else involved in that last stage of the process are helping borrowers with what that letter may look like if they want to actually waive it. A part of the logic there is that the government didn’t wanna give us a standard form, because would that make it too easy for a borrower to waive this right? Now, we are proposing that there would be a limited track for borrowers who are entitled to any rescission whatsoever because they are getting the closing disclosures in advance, they’re getting a chance to see the documents s- a- and learn all of the costs in advance, and so what does the three days actually offer? Now, I can see if we have a new person on title, if we’ve added somebody to title within the refinance world, or we’ve changed title, or we’ve somehow changed the borrowers on the loan and it’s still being treated like a refinance. In those two cases, I’m thinking let’s keep the right of rescission because we have changes in the actual lien and the people involved. But other than that, the right of rescission is not really giving any kind of consumer benefit. And so this idea of do I still need to have a waiver form, as brought up in question seven in the RFI, I think still exists. If this law still ends up existing for the right of rescission, there definitely should be a standardized form. There are a lot of commenters who are proposing this, that we are given a standardized form, and if we use the proper standardized form, that we are actually given a legal safe harbor for having gotten the right information, gotten clear disclosure out to the customer about their rights and what could be happening when they rescind this transaction. So we really do want to stress in question seven that a standardized form would be a benefit, and it looks like many commenters are leaning that way. Then it’s question nine that comes out and says, “Does the three business day post-consummation rescission waiting period, coupled with that there’s three days pre-consummation, is this an undue delay and delays the financing?” And our absolute response is yes. These are combined requirements. They cause extensive delays for refinance transactions, and as we are proposing, like I mentioned, changes in title, changes in borrowers, definitely high-cost mortgages should continue to be excluded. They’re already excluded. I’m sorry, they are already as– should be excluded from waiving the right of rescission. But what we want to have is that there is no longer a requirement to have a three-day waiting period post-consummation. So those are the two questions that we’re really focused on responding to for our purposes. I can see in the comments too that a lot of people are muddying up their responses, and so I would make a shout-out to everyone listening who is planning on comment to be very clear in communicating what’s applying to a purchase transaction and what are your thoughts and opinions versus a refinance transaction because it is very confusing. CFPB, of course, we hope knows the answers to that. But for all of you who are taking the time to write letters, you wanna make sure that your case and your points are clear and not just tossed to the side because you’ve mixed multiple concepts up when it comes to right of rescission that only applies to refinances in the first place. So just food for thought, and one last note I guess I’ll add is you can see a lot of comments are benefiting from AI in being able to pull together all of their facts and history and footnotes. So I really do see a major step up in how these comments are coming across, and I’m assuming it’s because of AI. So that’s my report for today, Dave, and I’ll turn it back to you. Thank you.
Alice Alvey, Master CMB
She handles development of their World Class Training program designed to support UHM partners and organizational effectiveness.
Prior to UHM, Alice served as Senior Vice President at Indecomm leading the Indecomm-Mortgage U division, Internal QA and Compliance and SaaS technologies. Indecomm acquired Mortgage U in 2013, where Alice was President/Co-founder, providing training and consulting since 1996. Prior to MU she served as SVP of Operations at a national bank overseeing operations for wholesale, retail and correspondent from underwriting through servicing, and compliance.
She has been in the trenches of mortgage lending operations from application through servicing for over 30 years. Her authoring work in training content, policies and procedures and the FHA/VA Practical guides illustrates her ability to bridge regulatory requirements with day-to-day operations.
Alice has been a weekly contributor to the Lykken on Lending show since its beginning in April 2009 and has made her weekly contributions to 450+ episodes!