Lykken on Lending

[David]  Let’s get over to Alice Alvey. So good to have you here. Alice she’s Vice President, Partner, Education and Training at Union Home Mortgage. And she’s here with a Legislative Update. So, anything you have on that, but really interested in talking about what you reported on last week via recording. Really fascinating. So any new updates you have for us, Alice?

[Alice] I think I’ll start with the VA piece, just real quick and then we’ll follow up with the Chevron piece so that we can have time to stretch out on that. This is just a reminder that their VA has a notice of proposed rulemaking out there for arms and temporary buy downs. The comment period will close on August 20th. And this is really pretty basic. I think what I like about this is VA. clarifying wording across their arm requirements and their temporary buydown to make it very clear on many of the policies that I know we hear at Union Home Mortgage have gotten responses from VA to get clarified. So for me, I feel like for the most part, this is just going to be aligning with what we’re already doing. It does clarify certain things that are nice to get in writing, but still a good proposal, I think, for everybody to go and read and make sure you get your comments on. Then as far as the Chevron deference ruling, Dave, it was really interesting. Last week, I hadn’t had a chance to really deep dive and read things, and I was just really going by what a lot of folks were speculating on in the market,  and I had a chance to read the Ballard Spahr, so for those of you who don’t know, it’s Ballard Spahr, SPAHR, they’re a well known law firm within the mortgage space along with Mitch Keiter in Wiener Brodsky Keiter and I like what they both put out, but they just recently put out an article that really took an interesting thought on this after they deep dove this, they really felt we aren’t going to see a change because this is a procedural act. So, it’s the administrative procedural act that had this wording changed and within that, apparently, there is still a. I don’t, you can use the word loophole, but there’s still verbiage that would allow a judge to go and still look at an agency’s policies if the agency had been very reasonable and effective and consistent in their interpretation. So I thought that was interesting. Whereas the initial thoughts on the Chevron deference was throw it away. The judges have to rely on their information and can’t defer as the second step is the way Ballard Spahr referred to it. And really just now it’s one step, but it doesn’t prohibit the judges from looking at the agency’s interpretation. I thought that was interesting. So I’ll turn it over to you all and see what you think.

[David] Yeah. Mark, any thoughts right out of the gate?

[Marc] No, I agree where Alice is coming from on that. And I’m glad she did that deep dive. Cause I’m glad every time she does a deep dive, I feel real comfortable. I know what’s going on then.

[David] I get that feedback all the time.  Bill, you always got some great feedback insights.

[Bill] I agree with Alice and where the deep dive went. The initial reaction is everything is going to change and I think the reality is, it’s not going to be that extreme, especially early on where It’s gonna take a while to figure out what’s appropriate to challenge and what’s not. But I wouldn’t look for large dramatic changes even over the next couple of years.

[Alice] And definitely not undoing anything that’s already been done.

[David] Yeah. Yeah. What about the challenging, I had a call with a client this morning and the question came up about to what extent if CFP does rules against me or my business or want to make it better. Can we go sue them? the answer is yes, there is now a precedence that allows you to do that, how long it’ll take or the amount of money they’ll go and do it. Like, how do you fight uncle Sam, which was in CFPB, which is funded by the treasury. That’s an endless deal, but we have Mitch Kiter that took on CFPB and won in the PHH case. So it’s not that it can’t be done. If you’re going to start a fight, man, you better make sure you can win. You have the capital to do and but I’m not sure that it’s interesting. It is a shift in the macro direction of things. I’m not sure that it’s going to end the end.  We’re going to see a whole lot of things changing. Like you said, Bill, but.

[Alice] And I think the key will be to your question, to your customer’s question about, can I open up a lawsuit now, everything’s going to depend on what is the topic, right? you have to have the money, but what is at issue? What is it they want to challenge? So if it’s some obscure, I’m being written up in an audit, I’m getting fined for something very significant. And they feel it’s a stretch of CFPB interpretation beyond the law that CFPB hasn’t consistently applied across lenders. That’s now directionally where you would be able to go in because the CFPB’s a one time interpretation by a particular agency, based on what I’m reading, may not hold up. I am not a lawyer. I’ll tell you that. And I can hear Mitch going with the legal ease, right? I would love to get on it, but I think those are the types of things that you would have to ask your legal counsel, does this change in light of this? If there’s something you take issue with any agency, not just CFPB and any regulatory agency.

[David] And I think you hit the nail on the head when you said, is this something where. If it’s, they went way out of the limb outside of other ruling that may justify that again, it’s going to be a protracted process and long period of time for that to happen. Although the Chevron case that actually moved pretty quickly, surprisingly fast. Do you have any timeframe on that?

[Alice] I’d have to go back and look at dates. Maybe what you’re thinking of is from the time that it got presented to the Supreme court to when we got a response, we usually do get our responses in June. But honestly, I’d have to go back and look at dates for when the full thing actually started.

[David] I think it’s seems like an interesting shift in the momentum. If it’s a momentum shift, that’s a good thing. That’s all I’m saying is anything to put the regulators back on their heels a little bit, or at least be a little more mindful about how they’re going out.  That is the most important bill you have some thought?

[Bill] Yeah, I think big picture. What I take out of it is they’re really drawing a line is. You can’t be the rulemaker, the judge, the jury, and the executioner. And that to me, that’s the big takeaway is that you’ve got to start separating the challenge and the enforcement side from the rulemaking side.

[Alice] Yeah. That’s a great way to put it. Yeah.

[David] Great way to put it, Bill. Very good. We could go on and on about that. Alice, thank you so much. Really appreciate you being here from the beginning of this podcast. It’s just so good. I say this for we have our new website. I don’t know if it’s up and running yet, but it will be shortly. But if you go in each one of our contributors, Alice, Bill, Mark. Allen, they’re all up on our website now. So you can binge listening to any one of the segments, if there’s something that’s going on. The 2 that are getting a lot of attention right now is Allen’s comments on tech because there’s such a big part of it. And Alice’s comments about. The regulatory side of it, we get a lot of downloads off of that area. So very interesting, but we thank you, Alice, for your contribution and a special thank you to our good friend, Bill at Union Home and we’re letting you be on here being generous with  your time. Appreciate it. Good job. All right.

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Alice Alvey, Master CMB
Vice President Partner Education and Training at Union Home Mortgage
8241 Dow Circle
Strongsville, OH 44136
D: 440.420.4294
C: 248.941.1939

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!