by CRESTICO | Aug 2, 2013 | CRESTICO
Section 129B(d) of TILA, as added by the Dodd-Frank Act, permits consumers to bring actions against individual mortgage loan originators for violations of certain provisions of TILA. For example, while LO’s can be held personally liable for receiving compensation in violation of the Rule, they are not personally liable under TILA/LO Comp for failing to maintain the records of compensation required by the rule. The LO Comp Rule, which implements the DFA’s statutory authority confirms this personal liability through its changes to Reg. Z’s definitions. Specifically, the change to § 1026.36 (a)(1)in the LO Comp Rule clarifies the definition of “loan originator” to mean either the individual LO or the company. The following is from the CFPB’s small business compliance guide which seeks to use plain language explanations for the Rule (although it still warns you that you need to see the actual Rule for details): “A “loan originator” is either an “individual loan originator” or a “loan originator organization.” “Individual loan originators” are natural persons, such as individuals who perform loan origination activities and work for Mortgage Brokerage firms or creditors. “Loan originator organizations” are generally loan originators that are not natural persons, such as mortgage brokerage firms and sole proprietorships”
TILA is confusing for a lot of reasons, but one of the biggest areas of confusion in the LO Comp and Ability to Repay rules are the differing obligations imposed on “Creditors”, “Loan Originators”, and “Loan Originator Organizations”. These definitions are critical in determining who is responsible for any obligation under TILA. LO comp is one of the few times where the obligation extends all the way down to the individual LO, but the liability is potentially huge. I don’t know about the issue from the LO’s perspective (ask an attorney; see below) – does the borrower have a life of loan defense? As best I understand it, the life of loan defense is true as it relates to foreclosure but the remedy is not a free house, it is three years of interest and other fees (loan, attorney) – a monetary judgment. So there shouldn’t be any runs on any particular company.
Attorney Brad Hargrave (MedlinHargrave) writes, “Loan originator compensation is one area of Truth in Lending and Regulation Z wherein someone other than a creditor; namely, the loan originator, can also be held liable for a violation. The citation in support of this proposition is found at 15 USC §1639b(d)(1) which provides, in pertinent part, that ‘for purposes of providing a cause of action for any failure by a mortgage originator, other than a creditor, to comply with any requirement under this section, and any regulation prescribed under this section, section 1640 shall be applied with respect to any such failure by substituting ‘mortgage originator’ for ‘creditor’ each place such term appears in each such subsection.’ And, §1640 is that section of TILA that imposes civil liability for various TILA violations, including those sections regarding LO Compensation. (I have not addressed the recoupment and setoff issues in the event of foreclosure in the context of the LO, given that an LO would not be the party initiating the foreclosure; and thus, this section really isn’t applicable to an LO).”
Mr. Hargrave’s note continues, “The penalties are potentially severe. In an individual civil action brought by a consumer, the creditor who paid the violative compensation could be liable to the borrower for actual damages, plus twice the amount of any finance charge in the transaction (capped at $4,000), plus an amount equal to the sum of all finance charges and fees paid by the consumer (unless the creditor can demonstrate that the failure to comply is not material), plus reasonable attorneys’ fees and court costs if the borrower were to prevail. The loan originator’s exposure to such a claim (per 15 USC § 1639b(d)(2))is the greater of actual damages to the consumer or three times the total amount of direct and indirect compensation paid to the LO in connection with the subject loan, plus the costs to the consumer of the action, including reasonable attorneys’ fees. In addition, the CFPB could sue the creditor and the loan originator in Federal District Court and seek any one of a number of remedies, including restitution and/or disgorgement, and appropriate injunctive relief, as to all loans wherein the LO received unlawful compensation. It is also possible that the matter could be referred to another agency for enforcement.”
by CRESTICO | Jan 3, 2013 | CRESTICO
CoreLogic, a leading provider of consumer, financial and property information, analytics and services to business and government released a report showing that the Shadow Inventory dropped again late last year.
Should we be afraid of the Shadows?
Shadow Inventory is a term used to describe unsold Real Estate that is either in foreclosure or homes that owners are delaying putting on the market until they feel that prices are rising. Shadow inventory often causes homeowners to question whether it is a good time to sell their homes and when they can see rises in prices..
According to CoreLogic, this shadow inventory fell 12.3 percent from the previous year.
“The size of the shadow inventory continues to shrink from peak levels in terms of numbers of units and the dollars they represent,” CoreLogic Chief Executive Anand Nallathambi said in a press release. “We expect a gradual and progressive contraction in the shadow inventory in 2013 as investors continue to snap up foreclosed and REO properties and the broader recovery in housing market fundamentals takes hold.”
CoreLogic estimates the supply of homes that are seriously delinquent, in foreclosure or held by lenders and not currently on the market. Investors and economists keep an eye on shadow inventory to get a sense of how many homes might be headed into foreclosure and hitting the market.
CoreLogic estimated the dollar amount of shadow inventory as $376 billion in October, a decline from $399 billion the same month a year before. Florida, California, Illinois, New York and New Jersey account for 45 percent of these shadow properties recently reported by CoreLogic.
by CRESTICO | May 21, 2012 | CRESTICO
73% of homeowners are paying too much for their home insurance! Let me tell you about three easy things you can do today to cut down your cost:
#1 – Give them more business and reap the rewards! – By combining your auto and home (or boat, motorcycle, RV, business, life, etc) policies with the same insurance company they will reward you with a multi-policy discount. If your insurance company doesn’t offer you this discount then chances are I can beat your current policies.
#2 – Cut the middleman out – Brokers make their money by charging a brokerage fee and they add that fee to your costs. By switching to a private insurance agent, you can cut out the brokerage fee and save yourself some additional money.
#3 – Discounts, Discounts, Discounts!!! – By installing a burglar fire alarm in your home you can save up to 20% off your policy. You can also get discounts for dead-bolt locks, indoor fire sprinklers, and even smoke detectors (which you should have anyways). If you currently aren’t offered these discounts, check with me to see what I can do for you.
by CRESTICO | Apr 24, 2012 | CRESTICO
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With Real Estate market again getting heated, the mortgage marketing campaigns in the financial institutions may also be heating up. Just about the most common in the offers tempting consumers will be the offer to get cashback for your mortgage business. This often is accessible for new purchases and also the Refinancing of existing mortgages.
It was only a couple of years ago once this was the hottest new offer in the industry. In today&rsquos market it appears that every other lender in the country is offering this cash return option.
An example of the standard cash return offer out there is 3% cash return whenever you subscribe to a condition of five years. Now here’s the place that the catch also comes in. Typically if you accept this offer you’re taking the amount of money back option in the place of a rate discount.
Just what exactly does this mean to consumers? Keep in mind I would recommend that you crunch the numbers when you jump at the offers available on the market. In today&rsquos market it’s not unreasonable for consumers with a good credit rating and verifiable income to command a single% discount on closed term mortgages. Some consumers are even able to get 1.05% off posted rates about the closed term of the choice.
To find out how a numbers figure out, let&rsquos check out a comparison between what you get coming from a cash return offer versus what you save having a 1% rate discount. Let&rsquos assume that you require a whole new $150,000 mortgage that you intend to amortize over two-and-a-half decades (the common). Lets also assume that the posted rate on a 5-year term is 8.35%. With the cash return provide you with will get $4,500 at the time the mortgage is advanced and as a consequence pay a rate of 8.35%. Assuming that all you do is make your minimum payment per month then in the term with the mortgage your total payments will amount to $70,710. After the phrase the main balance outstanding is going to be $138,736.90
If you successfully negotiate 7.35% with a 5-year term (with a 25-year amortization) then your total payments over the term are $64,994.40. After your term the complete principal balance outstanding is $137,158.98.
Which means not only do you think you’re making $5,715.60 less in whole payments in the term, but you need to $1,577.92 less principal balance outstanding at the end. Suddenly $4,500 money back doesn&rsquot seem so appealing?
I still believe today&rsquos real estate prices and low mortgage rates represent an excellent opportunity for owning a home. If getting 3% cash return helps to make the difference between you being able to afford your house and renting i quickly say do it now. Still, no financial decision must be made without weighing out each of the alternatives.
Remember: when the offer seems too good really was &ndash it’s always.
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by CRESTICO | Feb 6, 2012 | CRESTICO
Today’s buyers are looking for turnkey homes. That is, they want to move right in without having to do a lot of work. Buyers with busy lifestyles pay a premium for listings that are in prime condition. Staging can make the difference between a listing selling or not, the time it takes to sell, and the ultimate sale price.
Sellers who are financially strapped often have a hard time accepting that they’ll need to invest in preparing a house for sale even though they may sell for less than they paid. Fix-up costs can mount up; your agent can help you prioritize so that you don’t waste money. It’s important to keep your goal in mind, which is to sell your house in a difficult market.
Recently, a home in an affluent city came on the market in “as is” condition. It had been lived in for decades without much upgrading. Although located in a desirable area, the listing was vacant, dark and showed poorly. The sellers refused to do any work to improve its appeal.
After months on the market with no significant interest, the sellers pulled the house off the market and made improvements. The wall-to-wall carpet was pulled up to reveal hardwood floors that were then refinished. Painters lightened the interior and a professional stager was hired to bring in furniture, artwork, house plants and accessories. The listing was put back on the market with a fresh look and sold right away.
HOUSE HUNTING TIP: Although listings staged by a good decorator show well and often sell quickly, you don’t need to spend a lot to put your home into shape for marketing. Most homeowners have too many personal possessions in their home from a sale standpoint. Decluttering is something most sellers need to do.
Consider hiring someone to help you sort, pack, donate and recycle items that you no longer want. You may be able to take a tax deduction for things you donate. Make sure to get a receipt. Your Real Estate agent should be able to recommend someone who can help you clear your house of clutter if you are overwhelmed by the project.
Your agent, or stager, may ask you to put away collections of art, personal photos, etc. This can be difficult for most sellers because, for them, it’s part of the emotional appeal of their home. Your house won’t look like your home after you’ve removed personal possessions and moved what’s left around to display the house to its best advantage.
That’s the point of the preparation process. You don’t want prospective buyers focusing in on your personal property; you want them to focus on the house. Keep in mind that how you live in your home and how it should look when it goes on the market are not the same.
Some sellers complain that their house looks too stark without all their possessions. Even so, it helps you to detach yourself emotionally from the property. Also, less personal property usually gives homes a more spacious feel. When buyers are looking for the most for their money, bigger is usually better.
To close the deal, a listing should be spotless and inviting. Bring in new house plants to put in strategic locations, like orchids in the bathrooms. In dark spots that need a dash of warmth and color, use bromeliads.
THE CLOSING: If you can’t pull this together yourself, or with the help or your agent, hire a good stager for a consultation or a proposal for full or partial staging.
By Dian Hymer
How to sell my house fast
