Ethics In Mortgage Lending - Gold Coast Schools
Chapter 11: Ethics in Mortgage LendingChapter 11Ethics in MortgageLendingMortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage LendingChapter Objectives Define ethics and discuss purpose of codes of ethicsRecognize material facts in an advertisementDefine the bait and switch advertising strategyList classes that are protected from illegaldiscriminationIdentify scenarios that violate RESPA’s prohibitionagainst kickbacksRecognize indicators of mortgage fraudIdentify participants and their roles in mortgage fraudschemesIdentify predatory lending practicesMortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage LendingEthical and Legal Considerations Ethics in the Mortgage Industry– Serve mortgage lending needs of public inethical manner– Treat everyone equally– Be honest– Give full disclosure of all terms and conditions– Don’t take advantage of people– Keep good documentation– Adhere to a code of ethics from professionalorganization National Association of Mortgage Brokers Code of EthicsMortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage LendingEthical and Legal Considerations Penalties for Unethical Behavior– Action by state licensing and regulatory authority– Civil lawsuits filed by injured parties– Disciplinary action by professional associations– Filing of criminal charges in very serious casesMortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage LendingEthics in Advertising Regulations– TILA; Regulation Z Advertisement is a commercial message in any mediumthat promotes, directly or indirectly, a credit transaction– Federal Trade Commission Act Grants FTC authority to protect consumer interests Section 5 prohibits unfair and deceptive practices of anykind– Mortgage Acts and Practices (MAP) Rules Implemented by Regulation N Prohibits misrepresentations in a commercialcommunication regarding mortgage products Enforced at state levelTitle 15 USC §41-58; 12 CFR §1014.3 and §1026.2Mortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage LendingEthics in Advertising Misrepresentation and Material Facts– Puffing An opinion that is not necessarily intended as arepresentation of fact May be made unintentionally or through negligence– Form of Fraud A misrepresentation is made to a consumer with theintent to deceive– Misrepresentation of Material Fact A fact that, if known, might have caused a reasonableconsumer to make a different decision Serious violation; grounds to rescind a contractMortgage Lending Principles & Practices (10th Edition) 01/03/202012 CFR §1014.3
Chapter 11: Ethics in Mortgage LendingEthics in Advertising Bait and Switch Luring consumers in with promises of low rates andspecific products then steering otherwise qualifiedbuyers to other terms so MLO can earn higher fee Must not discourage the purchase of advertisedmerchandise or switch to higher-priced product– Not Bona Fide Offer Refusal to show or sell; disparagement of product;failure to have available; refusal to take application for– Switch After Sale/Sale Not Made In Good Faith Accepting a fee for advertised product then switch tohigher-priced product; failure to deliver withinreasonable timeframe; disparagement of product termsMortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage Lending11.1 Knowledge CheckMLO Jack advertises refinance loans with 0points and 3.8% APR just to get prospectiveborrowers in the door and then tells them thatsuch terms are not available because of theirdebt, income, or another factor. In reality, Jackdid not intend to originate any loan with thoseterms. Jack is guilty ofA. bait and switch advertising.B. predatory lending.C. puffing.D. steering.Mortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage Lending11.2 Apply Your Knowledge1. MLO Jane advertises what she calls “5 for 5”mortgage loans: 5% down and 5% fixed-rateinterest for 30 years. A qualified borrower arrivesand starts the loan process, paying for a creditreport, and completing a loan application. However,Jane does not lock in that interest rate. She knowsthat rates are going up, so she sits on theapplication for an extra week, and then tells theborrower that the best she can do is 5 3/4%.Would this be considered an example of a baitand switch tactic? Why or why not? YesMortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage Lending11.2 Apply Your Knowledge (cont.)2. MLO Alex advertises that he will close loans in 14business days, even though he knows that hisaverage close takes 47 days. His ad brings in 100new customers, and he works hard to close a fewof those loans in 14 days so that his advertisementremains legitimate.Would this be considered an example of a baitand switch tactic? Why or why not?YesMortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage LendingEthics in Advertising Unfair and Deceptive Practice– Dodd-Frank Act Unlawful for any provider of consumer financialproducts or services or a service provider to engage inany unfair, deceptive, or abusive act or practice Provides CFPB with rule-making, supervisory, andenforcement authority to prevent, detect, and penalize– CFPB Guidance Established a standard of items that constitute what isan unfair, deceptive, and/or abusive ce/guidance/Mortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage LendingEthics in Advertising Unfair and Deceptive Practice– Unfair Practices The act causes or is likely to cause substantial injury(monetary harm) to consumers, The injury is not reasonably avoided by consumers, and The injury is not outweighed by countervailing benefits to theconsumers or to competition.– Deceptive Practices The representation, omission, act, or practice misleads or islikely to mislead the consumer, The consumer’s interpretation of representation, omission,act, or practice is reasonable under the circumstances, and The misleading representation, omission, act, or practice ismaterial.Mortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage LendingEthics in Advertising Unfair and Deceptive Practice– Abusive Practices Materially interfere with the ability on the part of theconsumer to understand a term or condition of a consumerfinancial product or service, or Reasonably take advantage of:– A lack of understanding on the part of the consumer ofthe material risks, costs, or conditions of the product orservice,– The inability of the consumer to protect its interests inselecting or using a consumer financial product orservice, or– The reasonable reliance by the consumer on a coveredperson to act in the interests of the consumer.Mortgage Lending Principles & Practices (10th Edition) ompliance/guidance/
Chapter 11: Ethics in Mortgage LendingEthics in Advertising Examining Advertisement– FTC examines reasonableness from the perspectiveof the ad’s targeted audience FTC Consumer Alerts––––Understand all terms and conditionsDon’t be tempted by ads that don’t disclose all termsAPR is critical and may be hidden or buriedImportant payment information may be excluded; beprepared to ask– Consider shopping with several lenders– Negotiating is acceptablehttp://www.consumer.ftc.gov/Mortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage LendingEthics in Advertising Evaluating Buzzwords– Consider whether the use of such words orterms is fair, accurate, and complete within thecontext of an advertisement Low fixed rate; should also indicate how long itwill be fixed Very low rates; is this low payment or interestrate; must inform consumers of all details to avoidpayment shock Very low payment amounts; is it interest-only oran adjustable rate; ad must tell the whole storyhttp://www.consumer.ftc.gov/Mortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage LendingEthics in Advertising Internet Advertising– Same laws apply Must be truthful and not misleading Must have evidence to back up claims Cannot be unfair– Disclosures must be clear and conspicuous Adhere to FTC’s .Com Disclosures:Information about Online Advertisinghttp://www.consumer.ftc.gov/Mortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage LendingEthics in Advertising Better Business Bureau Advertising Guidance Does your advertising resultin satisfied customers? Do you avoid impossiblepromises and guarantees? Is the advertisedmerchandise or programreadily available? Is it your intent to sell what isadvertised?Mortgage Lending Principles & Practices (10th Edition) 01/03/2020 Do you avoid usingmisleading inferences? Do advertised terms agreewith the facts? Is the advertisement easy tounderstand without asterisksand fine print? Do you agree with yourcomparatives? Are you attracted by yourad?
Chapter 11: Ethics in Mortgage Lending11.3 Apply Your KnowledgeDetermine if these examples of advertising ideas, terms, andslogans might be considered deceptive to the public.1.We have loans with an APR of 4.607%Not orDeceptiveDeceptiveNot Deceptive2.Interest rates from 2.00%Deceptiveor Not DeceptiveDeceptive3.Very Low Monthly PaymentsDeceptiveDeceptiveor Not DeceptiveMortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage Lending11.3 Apply Your Knowledge4. An Internet advertisement contains a hyperlinkthat directs the consumer to a disclosure pagewith the details of the advertised loanDeceptiveNot DeceptiveNot orDeceptive5. A licensed MLO has a Facebook “fan page”where he describes various loan programs aswell as a range of interest rates available, butdoes not display his NMLS unique identifiernumber or his employing broker informationDeceptiveor Not DeceptiveDeceptiveMortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage LendingAnti-Discrimination Laws Civil Rights Act of 1866– 1866: Prohibits public and private racialdiscrimination in any property transaction in theUnited States– 1868: Court upheld; prohibits all racialdiscrimination, private or public, in the sale andrental of property– Enforcement: Person who has been unlawfullydiscriminated against can sue for compensatoryor punitive damagesTitle 42, Section 1981(a) of the U.S. Code/Mortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage LendingAnti-Discrimination Laws Fair Housing Act– Title VIII of the Civil Rights Act of 1968– Extends protection against race, color, religion,sex, disability, and familial status Americans with Disabilities Act– Further expands protection for disabled42 USC §3601 et seq.Mortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage LendingAnti-Discrimination Laws Fair Housing Act– Exemptions Rental of a room or unit in a dwelling of no morethan four independent units, provided the owneroccupies one unit as a residence Single-family home sold or rented by a privateowner without the use of a broker Housing operated by organizations Housing operated by private clubs42 USC §3601 et seq.Mortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage LendingAnti-Discrimination Laws Fair Housing Act Violations Refusing to rent/sell property Using discriminatoryafter good faith offeradvertising that indicateslimitation/preference Refusing to negotiatesale/rental of residential Coercing, intimidating,propertythreatening, or interfering withanyone for exercising rights Taking action that wouldgranted by the Actmake residential propertyunavailable to any person Discriminating in theterms/conditions of any Making any representationsale/rental of residentialthat property is not availableproperty or providing anyfor inspection/sale/or rentservices/facilitieswhen it is availableMortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage Lending11.4 Knowledge Check1. A lender may decline to make a mortgageloan in a particular neighborhood if theA. area is largely a commercial district.B. foreclosure rate in the area is higher than50%.C. property is in a declining market area and noprotected class is singled out.D. racial demographics of the neighborhoodindicate a high percentage of minorityborrowers.Mortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage Lending11.4 Knowledge Check2. The Fair Housing Act prohibitsdiscrimination against all the followingEXCEPTA. age.B. familial status.C. religion.D. sex.Mortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage LendingEthics: Prohibited Discrimination Discrimination in Mortgage Lending– Based on a person’s membership in a protectedclass, lenders must not: Refuse to make a mortgage loan Refuse to provide information regarding loans Impose different terms or conditions on loan Discriminate in the appraisal of property Refuse to purchase a loan Set different terms or conditions for purchasinga loan42 USC §3601 et seq.Mortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage LendingEthics: Prohibited Discrimination Prohibited Discriminatory Practices– Blockbusting Try to induce owners to sell home by suggesting thatethnic/racial composition of neighborhood is changingwith implication property values will decline– Steering Channel prospective real estate buyers/tenants to oraway from particular neighborhoods based on theirrace, religion, or ethnic background– Redlining Refusal to make loans (or make less favorable loans)on property located in particular neighborhood fordiscriminatory reasonsMortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage LendingEthics: Prohibited Discrimination FHA Anti-Discrimination AdvertisingRequirements– Include Equal Housing Lender slogan in broadcast– Display Equal Housing Opportunity poster in everybranch where mortgage loans are made– Display the Equal Housing Opportunity logo on allprinted promotional material Enforcement– Person discriminated against may file a written complaintwith HUD within 1 year of alleged violation– U.S. Attorney General may bring civil suit against anyoneengaged in ongoing pattern/practice of discriminatoryactivitiesMortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage LendingEthics: Prohibited Discrimination Prohibited Discrimination Against Same-SexMarried Borrowers– United States Supreme Court; Obergefell et al.V. Hodges, Director, Ohio Department of Health,et al. decided June 26, 2015– Same-sex couples have right to marry– Cannot be discriminated against due to sexualpreference– A mortgage lender may not discriminate againstmarried same-sex couples for any loan programMortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage LendingEqual Credit Opportunity Act About ECOA– Original legislation adopted in 1974– Implemented by Regulation B– Enforced by the CFPB– Ensures all consumers are given equal chanceto obtain credit– Applicants must be informed of their rights ECOA Disclosure12 CFR§1002Mortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage LendingEqual Credit Opportunity Act About ECOA– Requires that anyone who grants credit or setsterms of credit not discriminate based on: Race or Color Religion or National Origin Age (provided the applicant has the capacity tocontract; i.e., 18 years old) Sex or Marital Status Receipt of income from public assistanceprograms Exercised rights under the Consumer Credit12 CFR§1002Protection ActMortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage LendingEqual Credit Opportunity Act About ECOA– Must be followed when Taking loan applications Evaluating an application Approving or denying a loan– Sets Forth Qualifying Income Requirements Consider income adequacy and stability Do not consider income sources12 CFR§1002Mortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage LendingEqual Credit Opportunity Act ECOA Application Evaluation– Qualifying Income Requirements Must consider reliable public assistance income thesame as other income Must consider reliable income from part-timeemployment, Social Security, pensions, and annuities Must consider reliable alimony, child support, orseparate maintenance payments if the borrowerchooses to provide this information Must accept someone other than a spouse as a cosigner, if needed12 CFR§1002Mortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage LendingEqual Credit Opportunity Act ECOA Application Evaluation– Qualifying Income Requirements Creditors must disclose to consumers what their rightsare under ECOA, including right to receive appraisalreport copy Credit bureaus must maintain separate credit files onmarried spouses, if requested Credit applicants may file discrimination complaints orbring a civil lawsuit for alleged discrimination Creditors must maintain records of application andrelated information for 25 months (12 months forbusiness credit) after notifying the applicant of action12 CFR§1002takenMortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage LendingEqual Credit Opportunity Act ECOA Application Evaluation– Qualifying Income Prohibitions Must not refuse to consider public assistance incomethe same way as other income Must not discount income because of sex or maritalstatus Must not discount or refuse to consider incomebecause it comes from part-time employment orpension, annuity, or retirement benefits programs Must not refuse to consider regular alimony, childsupport, or separate maintenance payments Must not discriminate against applicants who exercise12 CFR§1002right of nondisclosure of income sourceMortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage LendingEqual Credit Opportunity Act ECOA Application Evaluation– Qualifying Income Real Success Best Practices When a lender may ask about spouse– Applicant relying on spouse for income– Joint application– Loan is secured by property– State that recognizes dower or curtesy rights How to ask about spouse– May not ask if applicant is widowed or divorced– May ask married, unmarried, or separated12 CFR§1002Mortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage LendingEqual Credit Opportunity Act ECOA Application Evaluation– Qualifying Income Real Success Best Practices How to ask about children– May ask questions about expenses related todependents– May not ask applicant about plans tohave/raise children12 CFR§1002Mortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage LendingEqual Credit Opportunity Act ECOA Application Evaluation– Age Consideration Allowed Applicant is too young to sign contracts, generally underage 18 Creditor would favor applicants age 62 and older It is used to determine meaning of other factors importantto creditworthiness, such as to determine if an applicant’sincome might drop because of pending retirement It may be used in a valid credit scoring system that favorsapplicants depending on their age– Citizenship Status Inquiry Allowed The applicant’s permanent residence and immigrationstatus in the US is a factor in determining creditworthiness12 CFR§1002Mortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage LendingEqual Credit Opportunity Act ECOA Credit Decision Requirements– Time Requirement Must provide credit decision to applicant within 30days after receipt of a complete application– Decision Notification Approved: Commitment Letter Incomplete: Notice of Incomplete Application Denied or offered less favorable or differentterms: Statement of Adverse Action12 CFR§1002Mortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage LendingEqual Credit Opportunity Act ECOA Credit Decision Requirements– Adverse Action Requirements Include specific reasons for the decision or informthe applicant of the right to request specificreasons for the decision within 60 days of a creditdecision– Right to Appraisal Copy Disclosure Must disclose that borrowers have a right to acopy of the appraisal report used in the decisionprocess upon completion of the appraisal or nolater than 3 business days before settlement12 CFR§1002Mortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage LendingEqual Credit Opportunity Act HMDA Reporting Requirements– Purpose Monitor compliance with equal credit and equal housinglaw with focus on ethnicity, sex, and race discrimination Reveal patterns of discriminatory practices– Data Collection Collect information about the sex, race, and ethnicity of theborrower and co-borrower during application process Enter data on mortgage loan application (URLA) for homepurpose or improvement, refinancing, or subordinaterefinancing Borrower may decline to answer; if declined, MLOcompletes for in-person/face-to-face applicationsMortgage Lending Principles & Practices (10th Edition) 01/03/202012 CFR§1003
Chapter 11: Ethics in Mortgage LendingEqual Credit Opportunity Act Enforcement– CFPB-enforced– Penalties for Violations Liability for punitive damages can apply only tonongovernmental entities For individual actions, up to 10,000 in punitivedamages For class actions, the lesser of 500,000 or 1% of thecreditor’s net worth A civil action may be brought in the appropriate UnitedStates district court within 2 years after the date of theoccurrence of the violation12 CFR§1003Mortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage LendingCommunity Reinvestment Act About the CRA– Purpose Enacted in 1977 to encourage financialinstitutions to help meet local credit needs of lowand moderate-income neighborhoods– CRA Examination Requirement Federal agencies must periodically evaluatedepository institution’s record in helping meetcredit needs of its entire community Examinations may include mortgage lenders;differs by state12 U.S.C §2901 et seqMortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage Lending11.5 Apply Your KnowledgeMatch the timeframe with requirement.Timeframe60 daysRequirementA consumer has to requestadditional reasoning after receiptof an adverse action.No later than before3 business days settlement, borrower has right toappraisal report copy.A creditor has after receipt of30 daysa “complete application” toprovide credit decision.Mortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage LendingEthics: Prohibited Discrimination Intentional and Unintentional Discrimination– Disparate treatment: Intentional decisions totreat people differently based upon protectedcharacteristics– Disparate impact: Practices that are intended tobe neutral but are shown to have a negativeimpact upon a particular protected classMortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage LendingEthics: Prohibited Discrimination Discrimination in Municipal Actions– Exclusionary zoning laws have the effect of denyinghousing to minorities or other protected classes– Ordinances limiting low-cost housing have a disparateimpact on minority groups; in effect, excluding themfrom certain communities Discrimination in Advertising– Certain phrases used in residential mortgageadvertising could convey either overt or tacitdiscriminatory preferences or limitations– Advertising content must not be construed as being inviolation of the Fair Housing ActMortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage LendingKickbacks and Referral Fees RESPA Prohibits Unethical Behavior– No giving or accepting a fee, kickback, or anything of value in exchange for referrals ofsettlement services on federally-relatedmortgage loan Thing of value: Any payment, advance, funds,loan, service, other consideration Referral: Any action that influences selection of aservice provider– No fee splitting and receiving unearned fees forservices not performed12 CFR §1024.14Mortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage LendingKickbacks and Referral Fees Allowable Fees Payment to attorney forservices rendered Payment by title company toappointed agent for servicesperformed regarding titleinsurance Payment by lender to its dulyappointed agent/contractor forservices performed inorigination, processing, or loan funding Employers payment toemployees for referral activitiesMortgage Lending Principles & Practices (10th Edition) 01/03/2020Payment to any person of abona fide salary orcompensation or otherpayment for goods orfacilities furnished orservices performedPayment pursuant tocooperativebrokerage/agent referralarrangementsNormal promotional andeducational activities thatare not conditioned referral12 CFR §1024.14(g)
Chapter 11: Ethics in Mortgage LendingKickbacks and Referral Fees Allowable Multiple Services Fee– Lawful if a person already providing a service in amortgage transaction, is in a position to refersettlement service providers, and also can provideadditional settlement services; must be actual,necessary, and distinct Allowable “Required Use” Discounts– Discounts on a combination of settlement serviceslawful if the use of any such combination is optionalto the purchaser and the lower price for thecombination is not made up by higher costselsewhere in the settlement process12 CFR §1024.14Mortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage LendingKickbacks and Referral Fees Violations of Section 8– Criminal Case Fines up to 10,000 Imprisonment up to 1 year– Civil Case Amount up to 3 times the amount of thecharge paid for the service12 U.S.C. 2607(d)Mortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage Lending11.6 Apply Your KnowledgeXYZ Mortgage encourages their borrowers to employattorney Bob to perform title searches and relatedsettlement services in connection with theirtransaction. XYZ and Bob have an understanding thatin return for the referral of this business, Bob provideslegal services to XYZ’s officers or employees atabnormally low rates or for no charge. Since theborrower is not required to use the attorney, isanyone in violation of RESPA?YesMortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage LendingMortgage Fraud Defining Fraud– Fraud: Intentional or negligent misrepresentationor concealment of material facts– Negligence: Unintentional breach of a legal duty– Actual Fraud: Intentional misrepresentation orconcealment of a material fact– Constructive Fraud: Negligent misrepresentationor concealment of a material fact– Mortgage Fraud: Misrepresentation orconcealment used in an attempt to obtain amortgage loanMortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage LendingMortgage Fraud Mortgage Fraud Schemes– Fraud for profit; usually perpetrated by industryinsiders– Fraud for property; usually perpetrated byborrowersMortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage LendingMortgage Fraud Borrower Schemes– Schemes to obtain ownership to a propertyunder false or fictitious pretenses False application information or falsedocumentation Act as straw buyer False credit or financial enhancement– Schemes to get out from under an unsustainablemortgage payment Buy and Bail Short Sale Fraud ArsonMortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage LendingMortgage Fraud Lender and Broker Schemes– Examples: Falsifying loan documents, make loans tostraw buyers, illegally flip properties, and thenquickly sell to secondary market– Purpose: Profit from loan fees, yield spreadpremiums, or commissions Appraiser Schemes– Examples: Intentionally inflate or deliberatelyunderstate an appraisal in collusion with a realestate agent, mortgage broker, or lender– Purpose: Loans falsely approved; sell homes athigher value or purchase home at lower priceMortgage Lending Principles & Practices (10th Edition) 01/03/2020
Chapter 11: Ethics in Mortgage LendingMortgage Fraud Reg Z Appraisal Requirements– Lender Prohibited Acts Related to Appraisal Imply that retention of appraiser depends on amount atwhich appraiser values a consumer’s principal dwelling Exclude appraiser from future consideration because theappraiser reports a value that does not meet minimumthreshold Tell appraiser minimum reported value needed toapprove loan Fail to compensate appraiser because appraiser doesnot value a dwelling at or above certain amount Condition appraiser’s compensation on loanconsummation12 CFR §1026.42Mortgage Lending Principles & Practices (10th Edition) 01/03/2020
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Mortgage Lending Principles & Practices (10th Edition) 01/03/2020 Chapter 11: Ethics in Mortgage Lending 11.3 Apply Your Knowledge Determine if these examples of advertising ideas, terms, and slogans might be considered deceptive to the public. 1.We have loans with an APR of 4.607% 2.Interest rates from 2.00% 3.Very Low Monthly Payments
UK Finance. The changing shape of the UK mortgage market. 3 Mortgage lending supports over 70 per cent of housing transactions. Gross mortgage lending has doubled to 268 billion over the last decade, supported by rising sales and house price growth. The expansion in gross lending has been achieved with limited mortgage product innovation.
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The Texas Mortgage Bankers Association opposes Sunset staff recommendation 1.1 relating to the abolishment of the Department of Savings and Mortgage Lending. The Department of Savings and Mortgage Lending should remain as a stand-alone regulator for the 26 state chartered savings banks, 400 plus registered mortgage bankers, 1,100 plus mortgage .
american pacific mortgage corp pnc bank, n.a. nova financial & investment corp. cbc national bank homestreet bank mortgage solutions of colorado llc bank of england union home mortgage corp branch banking & trust co nvr mortgage swbc mortgage corp pulte mortgage llc sovereign lending group inc rmk financial corp phh home loans, llc nations .
Hans Illingworth Cobalt Mortgage George Koutsos PMAC Lending Alex Margulis Perl Mortgage Jason Infanti Trident Mortgage Darrin Kresevic First Place Bank Mary Markis Perl Mortgage . Sean Johnson First Home Mortgage Phil Laughlin PMAC L
A lending institution such as a mortgage lender, bank, credit union or savings and loan association funds the FHA insured loan, commonly known as HECM. NO MORE MONTHLY MORTGAGE PAYMENTS For most people, the biggest benefit of a Reverse Mortgage is that the loan pays off your existing mortgage and eliminates all ongoing monthly mortgage payments.
and Career-Readiness Standards for English Language Arts. The second section includes the MS CCRS for ELA for kindergarten through second grade. The third section includes the MS CCRS for ELA for grades 3-5. The fourth section includes the MS CCRS for ELA, including Literacy in Social Studies, Science, and Technical Subjects. The final section .
