+

8 Hour Comprehensive Loan Originator Continuing Education 2016

CE Forward, Inc. DBANat’l Assoc of Mortgage FiduciariesJillayne Schlicke

+CE Forward, DBA NAMFNMLS Approved Course ProviderC-1400068

8 Hr LO Continuing Ed C-6088

1 Hr WA State LO CEC-6007

Instructor:Jillayne Schlicke

+

Module 1Introductions

TURN OFF CELL PHONES & laptops

ALL AUDIBLE ALERTS OFF or please turn the phone completely off or leave it in your car

Photo ID Please complete the sign-in

sheet. I NEED YOUR MLO NUMBER to

report your attendance to the NMLS. Pls put your MLO number on the form.

NMLS Rules of Student Conduct Please read and sign. A copy of

the NMLS Rules of Conduct are in your course packet

Photo ID is mandatory

+Welcome!Cell phones and laptops off while class is in

session.BreaksBathroomsCoffeeLunchSide conversations

+

Agenda

IntroductionsObjectivesBoundariesFederal LawNon Traditional LendingEthicsConsumer ProtectionFair HousingFraudEvaluationsCertificatesClose

+Section 2 Federal Law: Module 2.1TILA RESPA Integrated Disclosure Rule

We survived the TILA/RESPA integrated disclosure transition in the fall of 2015. Let’s check in: How did the implementation go at your company?

What kind of problems did you encounter during the first few weeks of October?

Was there anything that surprised you about the changeover to the new Loan Estimate and Closing Disclosure—something that happened that you weren’t prepared for?

+Section 2 Federal Law Module 2.3 Appraisals for Higher Priced Mortgage Loans Exemption Threshold

Effective January 1, 2016, the exemption threshold amount remains at $25,500.”

+Section 2 Federal Law: Module 2.4 Minimum Requirements for Appraisal Management Companies

Under the rule, states may elect to register and supervise AMCs

+Section 2 Federal Law: Module 2.4 Min Requirements for AMCs

Highlights: Independent Contractor DefinitionAMC/Appraisal Firm DistinctionAMC Panel Threshold SizeTrainee Appraisers Not Barred

+Section 2 Federal Law: Module 2.4 Min Requirements for AMCs

Do you believe registering AMCs will help, hurt, or make no difference?

What’s on your wish list for fixing the appraisal management problem

+Section 2 Federal LawModule 2.5 HMDA Rules

HMDA New Rule Executive SummaryBackgroundInstitutional CoverageTransactional CoverageReportable DataCollection and Reporting of Borrower

InfoData Submission ProcessDisclosure Requirements

+Section 2 Federal LawModule 2.5 HMDA Rules

Handout:Summary of Reportable HMDA Data

+Section 2 Federal LawModule 2.5 HMDA RulesQ: Compare and contrast the existing HMDA required data points with the new data points that will be required in 2017. Do you believe this will help companies gather better information to make sure the company is complying with HMDA?

Q: Notice the new data point (44) on page 5 of the handout. We will begin collecting the loan originator’s MLO Number/NMLS ID number along with the HMDA data for each loan application. What are the good reasons for and against reporting the MLO number along with the HMDA data?

+Module 2.6 UDAAP: Is this radio ad deceptive?

When is the right time to refinance your home? When you can save money. But it can be an even better time when we pay your closing costs. I'm Dan Smith from Private Plus Mortgage.Rates are still near historic lows and property values are up. This gives you more money-saving opportunities to lower your payments, drop PMI, shorten your term, or pay off those credit cards.And Private Plus can help you save even more by paying your closing costs. We don’t roll them into the loan, we actually pay them for you.So even if your rate is in the 4’s, see how much Private Plus can save you...

+

http://www.privateplusmortgage.com/no-cost-loans/

and the direct youtube link is here:

https://www.youtube.com/watch?v=iS8rQ6QMV0k&feature=youtu.be

+Section 2 Federal Law:Module 2.6 UDAAPQ1: Does the radio ad violate any laws?If yes, which laws?If no, why not?Q2: Does the ad violate the UDAAP law?Q3: Do you agree with how the mortgage company’s president responded to my complaint? If you were the president of this mortgage company, how would you have responded? Q4: What should we do?

+Section 2 Federal LawModule 2.7 Diversity Q1: The Diversity standards were published in

June of 2015. What has your company done so far to bring forth new policies regarding diversity in our industry?

Q2: How can diversity help a company succeed and grow?

Q3: What are some strategies that we can enact to recruit and retain a diverse workforce?

Q4: Do you believe the new diversity standards are too weak, too strong, or about right?

+WA State LO CE

WA DFI Statement of Charges Kevin Killeen

Read, discuss w/your small group.

+Section 2 Federal LawModule 2.8 LO Compensation Small Group Assignment Break into small groups. Read the CFPB Consent Order against

Guarantee Mortgage Discuss the following questions in your small

group. Elect a group leader and share your results with the rest of the class.

+Module 2.8 LO CompQ1: Paragraph (6) says, “Respondent paid monthly fees to marketing services entities associated with each of its branch offices. Respondent set the fees based on the profitability of the associated branch. The owners of the marketing services entities then drew the monthly fees as additional compensation. Owners included branch managers and LOs within the branch.”What was really going on here?Q2: How can mortgage companies compensate their branch managers and LOs besides “a percentage of the loan amount and stay within compliance of the Loan Originator Compensation Rules?Q3: What would be a fair penalty or fine?

+Section 2 Federal Law: RESPAModule 2.9 MSAsConsumer Financial Protection BureauCompliance Bulletin 2015-05October 8, 2015RESPA Compliance and Marketing Services Agreements

+Section 2 Federal Law: RESPAModule 2.10 MSAs CASE STUDIES

1. Wells Fargo, Chase and Genuine Title2. New Day Financial and Veteran’s

Organization 3. PHH and Atrium Insurance 4. Realty South and Title South

+Section 2 Federal Law: RESPAModule 2.11 MSAs Best Practices

Something of Value A referral A quid-pro-quo agreement

The CFPB seems to take the position that the mere entering into a contract with a person in a position to refer settlement service business is a violation of Section 8 of RESPA. This is very different from HUD’s treatment of marketing services agreements

+

+Section 2 Federal Law: RESPAModule 2.12 MSA Best Practices

Example:Social Media Co-MarketingHome Scouting

DOES THIS COMPLY w/RESPA Section 8?

+Section 2 Federal Law: RESPAModule 2.13 MSA Best Practices

Example:Social Media Co-MarketingBoomtown

What do you think about this Facebook ad?How can we critically analyze this ad program?How can we obtain referrals w/no strings attached?

+Section 2 Federal Law: RESPAModule 2.14 MSA Best PracticesExample: Zillow

Does the Zillow co-marketing program appear to comply with RESPA? Those of you in class today who have spoken with a Zillow salesperson about this program, how is Zillow selling their co-marketing program? What does Zillow’s terms of service say about this matter? How could a licensed loan originator and real estate broker structure the Zillow co-marketing agreement to be in compliance with RESPA?

+Section 2 Federal Law: RESPAModule 2.15 MSAs QUIZ

Take the RESPA/Co-Marketing Quiz

This is not a pop quiz. It’s a ROCK quiz. Because you rock.

Review your answers

+Section 3 Non-Traditional Lending Dodd Frank Act and Non-Traditional

Mortgages Sr LO Opinion Survey: Non-QM/Non-

Traditional

+Section 4 SARS/AMLFinCENHigh End Cash BuyersGibraltar BankMarijuana DispensariesAuditor Troy KellyIRS Money Laundering Investigations

+Section 5 Ethics and Consumer Protection What do you remember from past ethics classes? What is ethics? Are we professionals, retail salespeople, or are we

an emerging profession?

Law = have to Ethics = should, ought

+Section 5 Ethics and Consumer ProtectionModule 5.2 Code for an Emerging ProfessionAre you currently a member of a mortgage industry trade association? If yes:Have you known your association to every deny membership to an individual or company due to violating its ethical code?If yes:Is there an ethics committee and if so, what do they do? Do they report to the membership on their actions?If no:Why not? Would you voluntarily choose to follow the 2015 Draft Model Code of Ethics we’ve been working on in our LO CE classes? Handout: 2016 Draft Model Code of Ethics

+Profession v. non-profession

Specialized knowledgeLicenseEducation PRECEtestCode of ethics….sanctionsNot sales. Instead: fiduciary model.

+Section 5 Ethics and Consumer ProtectionModule 5.3 Emerging Profession: Loan OriginationComparison with Other Professions Certified Financial PlannerStandards of Professional ConductCode of EthicsRules of ConductPractice StandardsDisciplinary RulesCharacter Fitness StandardsEnforcement

+Section 5 Ethics and Consumer ProtectionModule 5.3 Emerging Profession: Loan OriginationComparison with Other Professions Certified Financial PlannerDoes the financial planning industry have a good reputation with consumers?Has the CFP designation resulted in more ethical financial planners?

UPDATE RE FIDUCIARY STANDARD

+Section 5 Ethics and Consumer ProtectionModule 5.3 Emerging Profession: Loan OriginationComparison with Other Professions National Association of RealtorsCode of EthicsStandards of PracticeEthics Arbitration Manual

+Section 5 Ethics and Consumer ProtectionModule 5.3 Emerging Profession: Loan OriginationComparison with Other Professions RealtorsDo Realtors have a good reputation with consumers?Has the Realtor designation resulted in more ethical real estate brokers?

+Section 5 Ethics and Consumer ProtectionModule 5.3 Emerging Profession: Loan OriginationComparison with Other Professions Licensed LOs can join a trade group. Example: Mortgage Bankers AssociationSeveral different Certified Mortgage Banker Designations(Note that these designations are voluntary, not mandatory)Code of Ethics does not appear on the national website.

+Section 5 Ethics and Consumer ProtectionModule 5.3 Emerging Profession: Loan OriginationComparison with Other Professions Loan OriginatorsDoes our industry have a good reputation with consumers?Has the Certified Mortgage Banker designation resulted in more ethical loan originators?

+Module 5.3 Emerging Profession: Loan OriginationYour IdeasShould we re-enact the mortgage broker/mortgage lender commission? What can we do with the code we’ve written at the state level? Should we require membership in an association that oversees ethical conduct?Should we expand the mortgage broker fiduciary duty law to include non-bank lenders?What are your ideas?

+Section 5Fair Housing

1968 Civil Rights Act

1968 Fair Housing Act~

Protected Classes:

Race

Color

Religion (Creed)

Sex

National Origin

Familial StatusSexual orientation added in

2012 to Fair Lending

Disability

41

Intent v. Effect

Realtors and lenders have great power to affect neighborhoods

+Section 5 Module 5.4Fair Housing/Fair LendingCASE STUDIES Associated Bank Redlining Gender Identity Disability Discrimination Disparate Impact

+Section 5.5 Mortgage Fraud Intentional misrepresentation of a fact in

relation to a mortgage loan. Had the lender known of the fact, the lender might not have made that loan.

Fraud for housing e.g.; borrower lies about occupancy

Fraud for ProfitIndividuals acting together in a group

to send many loans through one or more lenders and most of them default leading to large losses.

+Section 5 Mortgage FraudModule 5.5

State of WA v.Doug White and Diana Merritt

Partial Report of the ProceedingsCause No. 14-1-02956-6

+Section 5 Mortgage FraudModule 5.5

State of WA v.Diana Merritt

Partial Report of the ProceedingsCause No. 14-1-02955-8SEA Selected Testimony of Loan Originator Diana Merritt

+Section 5 Mortgage FraudModule 5.5Assignment: Read the case study and testimony from the loan originator.In your small groups, discuss the questions at the end of the case study. Elect a group leader and share your answers with the rest of the group.

Motivation

Opportunity

Rationale

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Evaluation FormsRequired by NMLSAnonymous/name not requiredCourse name: LO CE

+CertificatesAttendance will be reported to the NMLS within 7 days or lessI will pay your NMLS “credit banking fee”$1.50/hour/studentI will send you an email with confirmation.Do not lose your certificates

+

THANK YOU!!Jillayne Schlicke206-931-2241jillayne@ceforward.comceforward.commortgagefiduciaries.com

+

1 Hour WA State Loan Originator Continuing Education 2016

CE Forward, Inc. DBANat’l Assoc of Mortgage FiduciariesJillayne Schlicke

+WA State LO CEDFI Update:

Information SecurityLicensing TrendsCommon Violations

DFI RulemakingQuiz

Case StudyKilleen

+WA State

+WA State LO CEDFI Rulemaking

OPEN BOOK QUIZ Complete the quiz with the people in

your small group.

+WA State LO CECase Study:DFI Statement of Charges: Killeen