State and Federal Compliance
Management must approve all advertising. The Company will follow the advertising rules in accordance with Regulation Z and any requirements of related state regulations. In addition, the company does not discriminate against any applicant or discourage an applicant from making a loan application for any prohibited reason. All advertising will meet this policy when being developed.
Good Faith Estimates/Mortgage Loan Disclosure Statement
Real Estate Settlement Procedures Act (RESPA) requires a lender or mortgage broker to give advance disclosure of settlement costs to the borrower. The following paragraph describes the requirements to follow in preparing the good faith estimate.
Prepare the information for RESPA good faith estimates (GFE) along with any state mandated separate disclosure, if applicable, and print or reproduce the HUD booklet, Shopping for Your Home Loan; HUD's Settlement Cost Booklet, for every loan that is used to finance the purchase of the mortgaged property, is secured by a first mortgage on real property with one to four residential units, and is federally related. Prepare a GFE and any required state mandated separate fee disclosure for the range of charges for specific settlement services the applicant is likely to incur in connection with the settlement based on our experience with settlements in the area where the property is located including disclosure of all fees to be paid to our company including rebate fees from the lenders. Be sure the GFE and any state mandated separate fee disclosure includes all of the required statements indicating that these are estimates and may not include all items required to be paid at settlement. If, prior to settlement of the loan transaction, there is a significant change in the terms of the loan including the fees to be paid on the loan, prepare a new GFE and state mandated separate fee disclosure and obtain date and signatures by the borrowers.
Regulation Z requires that the lender provide information about adjustable rate mortgage (ARM) loans to the prospective borrower. These consist of the Consumer Handbook and specifics about the particular ARM program. The following paragraph describes the requirements CU HomeLand Corp. (CUHL) and American Pacific Mortgage Corporation (APM) must follow to prepare these disclosures.
The ARM disclosures include the Consumer Handbook on Adjustable Rate Mortgages or a suitable substitute and our loan program disclosure for each ARM program in which the applicant expresses an interest. CU HomeLand Corp. and American Pacific Mortgage Corporation disclosures to the applicant fully and separately describe our ARM loan programs. This disclosure of the ARM loan programs should be complete to include the interest rate, indices and the margin used to calculate the interest rate, increases and decreases in the interest rate and payment, frequency of change, adjustment caps, negative amortization, conversion options, etc. Be sure to provide examples of how the payments and loan balance are affected by the changes in the loan program. Secure a signed disclosure that this has been accomplished.
Home Value Code of Conduct
Effective May 1, 2009, CUHL / APM has a strict appraisal ordering process which is mandatory for all loan production staff - no exceptions. The purpose of this process is to ensure compliance with both the letter and the spirit of the Home Valuation Code of Conduct (HVCC). Important points of the CUHL / APM appraisal ordering process include the following:
- A loan originator may not select an appraiser.
- All FNMA/FHLMA loans require the appraisal be requested via the CUHL / APM Intranet under Appraisal Requests. Effective January 1, 2010, all FHA appraisal requests must follow HVCC procedures.
- A loan originator may not engage in any communications with an appraiser - all communications must be through the CUHL / APM designated Appraisal Management Company (AMC).
- A loan originator is responsible for ensuring that a copy of the appraisal(s) is provided to the borrower no later than three (3) days prior to funding.
A copy of the entire Home Valuation Code of Conduct is available here. All staff must certify they have read, reviewed and understand HVCC.