How to disclose the MassHousing Counseling fees?
Good news, there's a simple answer to this one.
If you do loans with MassHousing, you are aware that borrowers must pay for Homebuyer Counseling on MH loans. And if you're in the lending business, you are aware of the TRID Rule, which requires all fees paid in connection with the transaction be disclosed.
Well, what about the fee paid for Homebuyer Counseling?
Question
How do we disclose the Homebuyer Counseling fees paid by the borrower on a MassHousing loan? Do we need to at all?
Problem
So, yes- lenders do need to disclose on the LE+CD the cost of homebuyer counseling.
These fees, as required 3rd party fees, must be disclosed under either Section B. or Section C., depending on whether the lender allows "shopping" (as defined by the regulations). If in Section B., that's a 0% category.
The problem that arises is that there are 50+ approved counselors, many charging different fees, some give discounts for large families. It's a bit of a mess! So how can we disclose the cost of counseling accurately within 3 days of application?
Simple Solution!
Hey good news, there's a "quick fix" to this problem. This is what you do. Step One. Call up a couple of homebuyer counselors and get their fees and contact information. Pick counselors with similar (or the same fees). Step Two. Disclose those counselors on your SSPL (settlement service provider list)- the disclosure that goes out with the initial disclosures. Still disclose the full list counselors that are approved by MassHousing, which is a LOT more than the two or three you will disclose!
Now your problem is solved.
If the borrower picks one of the counselors included on your SSPL, then you disclosed the fees accurately because you gathered their fees ahead of time (plus you have a 10% tolerance).
But if the borrower chooses another counselor, someone not on your SSPL but still approved by MassHousing, then you're not worried about any change in fees because there is not a tolerance that applies (the fee now falls in the 'unlimited' tolerance category).
Don't have an SSPL to use? Well, most loan origination systems will have this, or you can create a custom form. Here's a link to the specific page in the Federal Register with a sample SSPL form to use.
Unlike seemingly all other investors that are shying away from public guidance (at least helpful public guidance) on TRID implementation, MassHousing has published an extremely helpful (and specific) set of TRID FAQs that will help Massachusetts lenders stay in compliance as things change. Technical difficulties are stopping me from providing a link to the TRID FAQs, but you can pull them yourself at emasshousing.com or just Google "TRID FAQs masshousing."
In Other News:
Jim Morrison from the Banker & Tradesman chimed in this week on how the CFPB's stance on MSAs are affecting (or should affect) Massachusetts mortgage lenders. Check it out here ...
If I give you my best dad joke, will you give it back?
With TRID in the rear view mirror, we almost immediately get the CFPB's new proposal to rehaul HMDA, a decent summary of which is available here. But good news- we have until 2018 to implement these changes.
Beating Indy might've been disappointing were it not for the Colt's disastrous "4th and fail" play. Making things even better were all those tweets in response to the Chuck Pagano's 'Ask the Coach' Q+A session on Twitter. Some of my favorite questions to the Colts' coach were:
Do you consider the fake punt a success because no one died (that we know of)?;
Did you intentionally run the worst play in history or was that by accident?;
Was the name of that play "bag of hammers"?;
Chuck do you prefer Mayflower or Uhaul moving companies??; Do you think Colt Anderson showed enough to earn a spot at qb?;
Coach, can you tell us what child won the "you get to call a play" contest on that fake punt?;
What defensive coordinator job are you most interested in next season?
They say that, to develop a strong vision you'll need perspective. How do you get perspective? Having a narrow background, few outside interests, and a disinterest in world events would likely be a handicap. So to get perspective, what do people do? They read, go on trips, take up hobbies. Perhaps the most effective way is to have a social network outside of just your field of work; to communicate with people in different industries and diverse backgrounds. During World War II, the U.S. military purposefully filled teams with people who had little or nothing in common.
"Kindness is in our power, even when fondness is not."
- Samuel Johnson
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