Feature Article #1

Fiduciary Duties for Mortgage Brokers and LOs

In October of 2007, Andrea Negroni wrote an article for Mortgage Banking Magazine titled “Mortgage Brokers–What Fiduciary Duties Exist?” Negroni provides a framework for mortgage brokers to begin learning about case law already on the books where courts have imposed fiduciary duties on brokers.
The National Association of Mortgage Brokers has been quite insistent that brokers […]

mf | June 20th, 2008 | Continued

Feature Article #2

Reverse Mortgage Loan Originations Caught up in New State Law Changes

This memo was sent to me by a member of the National Reverse Mortgage Lenders Association:
Member Alert: NRMLA Trying to Resolve Licensing Issues in Washington State
June 2, 2008
Washington state recently passed legislation (SB 6471) that may impact non-depository lenders, as well as the correspondents, subsidiaries and affiliates of depository lenders who make reverse mortgage loans […]

mf | June 17th, 2008 | Continued

Feature Article #3

Mortgage Industry Codes of Ethics

Read the Code of Ethics from these three trade organizations.  Don’t worry; it will be a very fast read.

National Association of Mortgage Brokers
National Association of Mortgage Women
For the Mortgage Banker’s Code, follow this link and click on “cannons” from the menu on the left.
What’s missing?
Could some of these phrases be re-worded?  If so how? 
For example from […]

mf | June 14th, 2008 | Continued

Feature Article #4

Solutions to the Mortgage Lending Crisis

The mortgage industry crisis is a gift.  Mortgage lending can emerge from this mess and transform itself. I have been co-writing about predatory lending and the ambiguous professional status of retail mortgage salespeople for over 7 years. The industry has traded consumer respect for massive profits.  It does not matter where you work: banker, broker, credit union, consumer […]

mf | June 13th, 2008 | Continued

Feature Article #5

What the Space Shuttle Challenger Disaster Can Teach Us About the Current Mortgage Lending Crisis

In this mortgage ethics article about allegiance to rule-following, I will compare the mortgage industry crisis with a classic business ethics case study.
The space shuttle Challenger accident has frequently been used as a case study in the study of engineering safety, the ethics of whistleblowing, communications, and group decision-making.  With Challenger, an O-ring eroded on earlier shuttle launches. […]

mf | June 13th, 2008 | Continued

About this Site

The National Association of Mortgage Fiduciaries was formed primarily to educate and guide mortgage lenders into fiduciary status. We recognize that the mortgage lending industry is undergoing dramatic change.  The current global economic crisis which began with the subprime meltdown in 2007 has historic roots in mortgage lending securitization and the eventual relaxation of underwriting […]

Mortgage CE Classes at First American Renton

Other Recent Articles

Loan Modification Fees: Is it Justifiable for a Fiduciary to Charge for a Free Service?

Mortgage brokers and loan originators have become curious in learning about loan modifications. When I ask why, they say that they’re hearing there’s good money to be made doing loan mods.  What? Wait a second. I thought loan modifications were done by the lender for free.
More and more spam is popping up in my spam bin targeted at LOs and […]

3Sep2008 | mf | 3 comments | Continued

National Loan Originator Licensing coming….For ALL LOs

Tucked inside the Foreclosure Rescue Bill signed by the President yesterday is a provision calling for all loan originators to be licensed.  Bankers, brokers, consumer loan lenders, and credit unions; it doesn’t matter where you work.  If you’re an LO you must pass a competency test that will be developed by the National Conference of […]

31Jul2008 | mf | 0 comments | Continued

FHA Training Resources

I’ve been fielding many calls this summer asking for ideas on how to train staff on originating FHA loans.  Here’s my advice:
If you’re newly approved by FHA, your very best option is to take the class taught by HUD called “FHA Lender Training.” These classes are typically three full days: Day 1 Processing, Day 2 […]

31Jul2008 | mf | 0 comments | Continued

S.A.F.E. Mortgage Licensing Act

Today I’m following the passage of bill HR 3221, the Foreclosure Prevention Act of 2008. I believe from this point, it will go back to the House for their approval of the Senate’s revisions. There are a lot of provisions inside the bill, but this one caught my eye:
Inside is a provision for the S.A.F.E. […]

10Jul2008 | mf | 0 comments | Continued

Indymac Wholesale

ML Implode is reporting that there’s an announcement forthcoming tomorrow morning about the fate of Indymac Wholesale and it doesn’t sound good.
Surely no one reading this blog will be surprised but it does eliminate a player in the wholesale lending game.

7Jul2008 | mf | 0 comments | Continued

National Loan Originator Licensing

The “Federal Housing Finance and Regulatory Reform Act of 2008? is here.  Read the PDF if you’re feeling ambitious or here is the summary of the Dodd amendment. There’s a section inside Senator Dodd’s amendment that will give us national loan originator licensing. On page 34, the definition of a loan originator is as follows:
LOAN ORIGINATOR
A) IN GENERAL
The term […]

18Jun2008 | mf | 3 comments | Continued

Distressed Property Law

Mortgage Brokers and Loan Originators are exempt from becoming a “Distressed Home Consultant” when helping Distressed Homeowners refinance, unlike real estate agents who are subject to increased liability under the new Distressed Property Law.  My question is, SHOULD mortgage brokers and loan originators be exempt?  Please read this blog post and share your opinion.  I […]

18Jun2008 | mf | 2 comments | Continued

WA State Cracks Down on Title Insurance Company Inducements

Mortgage brokers, loan originators, and real estate agents have all been warned NOT to accept any inducements from title insurance companies.  Giving OR receiving an item of value in exchange for a referral of a federally related loan is already illegal under RESPA. However, HUD auditors do not routinely wander around inside real estate offices […]

18Jun2008 | mf | 1 comment | Continued

HUD Audits A Plus

Please read this brief blog article on the A+ Mortgage recent HUD Audit. 
Analyze the A Plus Mortgage response to HUD’s findings on pages 19-24, and HUD’s comments which follow. 
Question: You’ve just been hired to manage the loan originators at A Plus.  What’s your action plan?

18Jun2008 | mf | 2 comments | Continued

Fee Splitting

I recently wrote about a common question I often receive in which an unlicensed LO asks a licensed LO to act as the originator on a transaction, and pass part of the origination fee back to the unlicensed LO.  Read the story here.
What are the possible consequences for the licensed LO, the unlicensed LO, the consumer, […]

14Jun2008 | mf | 1 comment | Continued

The Giant Pool of Money, by TAL and Chicago Public Radio

This NPR radio episode runs just under 54 minutes.  Click on the “download” button; it will take several minutes to download.   While you’re waiting, browse through some of our other articles on Ethics in Mortgage Lending! 
In order to better understand why we are currently facing massive mortgage loan defaults of epic proportions, this radio program takes us […]

13Jun2008 | mf | 2 comments | Continued

Are Mortgage Loan Originators Professionals?

When I ask the question “Are loan originators professionals?” to a group of loan originator students in ethics classes, almost everyone says “yes.”  Anyone can do their job in a professional manner (adjective,) but not everyone is a Professional (noun.) Is your barista at Starbucks or the person who bags your groceries a professional? If […]

13Jun2008 | mf | 17 comments | Continued

The Subprime Meltdown

When I entered the mortgage industry in 1985, Conventional loans were only for those who could put down 10%. Most folks opted for an FHA or VA loan. There was no risk-based pricing. Everyone received the same interest rate on their mortgage loan whether they had great credit or a few late payments. Homeowners with […]

13Jun2008 | mf | 0 comments | Continued

Interesting insight on defaults of downpayment assistance program loans from the recent FHA training

I attended an FHA training this week sponsored by the Washington Mortgage Lenders Association. There were about 100 people in the training. A large percentage of the audience was not from the greater Seattle area. People had come from as far away as eastern Washington, Idaho, Montana, Oregon, California, New Mexico, and even Guam. […]

7Jun2008 | mf | 2 comments | Continued

Consumers now have access to wholesale mortgage pricing

Inman news is doing a three part series on a group of websites devoted to providing consumers with wholesale mortgage rate pricing.
Part 1 reviews LendingArt.
Part 2 reviews RateWindow and Mortgage Marvel which are widgets that run on other websites. Part 3 will review MortgageGrader.

6Jun2008 | mf | 0 comments | Continued

Federal Housing Finance Regulatory Reform Act of 2008

The new bill from Senator Dodd is out.  Here’s the PDF and here is the Dodd amendment.  The original bill is 387 pages long and contains provisions for national loan originator licensing, puts a limit on golden parachutes, establishes a “federal housing finance agency,” and a big bucketfull of other changes including helping out the affordable housing […]

20May2008 | mf | 0 comments | Continued

Live from the WA Mortgage Broker Commission Meeting

I’m here at the Washington State Mortgage Broker Commission Meeting in Bellevue.
Licensing update: back in February of 2008 we had 1900 brokers in WA state with about 1700 branch offices. Now as of May 2, 2008 we are at 1500 licensed broker main offices with 1700 branch offices.
In February 2008 we had 13,000 licensed loan originators.  Now, as […]

13May2008 | mf | 12 comments | Continued

Update on the May 7 Mortgage Broker Commission Meeting and SB 6471

At the beginning of every law, there’s a preamble and then a set of definitions. Many of you know this: A mortgage broker is not a lender.
A lender is defined by federal law, RESPA, as an entity that makes loans.  This means the entity has the money to fund the loans.
Brokers, by definition do not […]

8May2008 | mf | 4 comments | Continued

Washington State Mortgage Broker Commission Meeting May 7, 2008

There’s a Washington State Mortgage Broker Commission meeting tomorrow, May 7th at the Renton Community Center to discuss the impact of State Senate Bill 6471.  This legislation ammends the Consumer Loan Act and Mortgage Broker Practices Act requiring all lenders to become licensed under the Consumer Loan Act (except those licensed under RCW 63.14)

 
This change […]

7May2008 | mf | 1 comment | Continued

WA State Legislative Changes: SHB 2770, SB 6471, SB 6381

The Washington State Legislature has passed three new laws that will go into effect June 12, 2008. 
SHB 2770
Governor Gregoire’s legislation implementing the recommendations of the Homeownership Task Force. This legislation impacts Banks, Credit Unions, the Consumer Loan Act (CLA), and the MBPA. The bill addresses prepayment penalties, negative amortization loans, the federal guidance on nontraditional […]

1May2008 | mf | 6 comments | Continued
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