DoddFrank Act Consumer Financial Protection Bureau and HUD Free Tutorial

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Welcome to the seventh episode of the National Mortgage Exam Tutorials Practice Tests videos. The series will be following the sequence of topics as presented in the NMLS test content outline at https://bit.ly/NMLSoutline. • You can purchase The SAFE Mortgage Loan Originator National Exam Study Guide at https://amazon.com/author/patriciaoco.... It is available in kindle and paperback versions. There are hundreds of questions and two practice exams. • Please take a moment to subscribe at https://bit.ly/mortgage-exam. First, go to Settings/Privacy in your profile and make subscriptions public. You have to do this before you subscribe if you want quizzes starting at video #8, • Starting with Video #8, practice quizzes are only provided to subscribers who follow the instructions at the end of each video. Requesters' names must be public (so I can see them) and match the name of a valid subscriber. Once you receive one quiz, you may make your name private again if you wish. Names and emails are kept strictly confidential and are not shared with anyone. • ***************************************************************** • Dodd-Frank Act • Passed in 2010 in response to the financial meltdown and recession. • Some goals of the Dodd-Frank Act are to: • • Streamline federal regulatory agencies • • Provide better protection for consumers • • Increase the oversight of financial companies • • Establish liquidation procedures for failing financial institutions • Existing agencies couldn’t support all the requirements of the new law, and several new ones now exist: • • Consumer Financial Protection Bureau • • Financial Stability Oversight Council • • Orderly Liquidation Authority • • Federal Insurance Office. • The following three areas were affected by the Dodd-Frank Act and apply to residential (1-4 units) finance transactions: • Refinancing • • Refinancing a higher-priced mortgage may not result in a higher balance, balloon payments or negative amortization. • Appraiser Independence Requirements (AIR) • • Lenders may not accept an appraisal from anyone who has been selected, retained or compensated by a mortgage broker or real estate agent. • • The appraiser’s client is the lender. • • Appraisers may not discuss valuations with loan staff. However, they may discuss it with real estate agents. • • No one connected to the loan staff can order an appraisal. • • No one must specify a desired or expected valuation although a sales purchase contract may be provided. • • A copy of the appraisal must be provided to the borrower at least three days prior to loan consummation, unless this timing requirement is waived by the borrower. • Legal oversight over federal laws and regulations • • The Consumer Financial Protection Bureau oversees federal finance regulation and enforcement. This includes RESPA, TILA and TRID among others. • Consumer Financial Protection Bureau (CFPB) • The role of CFPB is a multi-faceted one. It’s the responsibility of this organization to: • • Simplify consumers’ lending forms. • • Protect the public from predatory lending practices. • • Respond to consumer financial complaints. • • Educate the public and the employees of the financial institutions. • • Monitor and assess the risk level of current financial practices. • The Bureau is funded by the Federal Reserve, but its chairman is appointed by Congress. Congress can legislate changes in the Bureau or even abolish it. • Consumers can file complaints on the Bureau’s website http://consumerfinance.gov • US Department of Housing and Urban Development (HUD) • HUD is the primary federal agency tasked with creating and managing programs to provide quality affordable housing, prevent housing discrimination and help build sustainable communities. • Programs offered by HUD include: • • Section 8 housing for low income families. • • Rental assistance for the elderly. • • Housing for the disabled. • • Community Development Block Grants. • • Office of Fair Housing and Equal Opportunity. • • FHA loans. • • Government National Mortgage Association (Ginnie Mae). • HUD oversees the Federal Housing Administration (FHA). • The Fair Housing Act is enforced by HUD and creates the following seven protected classes of individuals who cannot be legally discriminated against in residential housing transactions: • • Race. • • Color. • • Religion. • • Sex. • • National Origin. • • Disability (includes HIV/AIDS) • • Familial Status.

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