Friday, February 17, 2012

CFPB's New "Feedback Tool"

On February 16, 2012, the Consumer Financial Protection Bureau (Bureau or CFPB) launched a new initiative, dubbed the Streamlining Regulations Feedback Web Tool.
According to the Bureau, the tool will enable the public and financial institutions alike to more easily submit suggestions for streamlining regulations that the CFPB received from other Federal agencies on July 21, 2011, which the Bureau calls inherited regulations.
In effect, the Bureau is seeking comments and suggestions about existing regulations. The goal is to identify provisions of the regulations that the CFPB should make the "highest priority" for updating, modifying, or eliminating because they are outdated, unduly burdensome, or unnecessary.
The purpose of the Feedback Tool is to create one means by which the agency may consider ways to reduce the burdens imposed by existing regulations without reducing actual financial protection to consumers.  
This newsletter provides a general outline of the ways and means by which the CFPB will use the information derived from the Feedback Tool, other sources, and an overview of the Federal Register Notice of Streamlining Project of December 5, 2011.

In This Article-Grey-Light-1 (125x24)
Proposal in the Federal Register
Suggestions Criteria
Suggestions Factors
Potential Streamlining Opportunities
Streamlining Regulations Feedback Web Tool
Public View

Line-WebpageProposal in the Federal Register
On December 5, 2011, the CFPB published in the Federal Register its proposal to streamline regulations it recently inherited from other Federal agencies. The Bureau indicated that it would ask the public to identify provisions of the inherited regulations that the Bureau should make the highest priority for updating, modifying, or eliminating because they are outdated, unduly burdensome, or unnecessary. Comments on the proposal must be submitted by March 5, 2012 and commenters will have 30 additional days (until April 3, 2012) to respond to other comments.
The proposal itself provided several specific requirements that the CFPB believes may warrant review.
For the next year the Bureau is focusing most of its rulemaking resources various mortgage reforms that Congress instructed the Bureau to implement. This focus is dictated by the January 2013 statutory deadline for most of these rules.
After the Bureau receives public input and determines its priorities, the Bureau will consider whether to issue a notice of proposed rulemaking to streamline specific provisions of regulations.
The CFPB will focus on a particular regulation or set of regulations. It will also focus on a market sector and all of the regulations that apply to that sector. The Bureau states that it is interested in "identifying practical measures it can take, apart from revising regulations, to make compliance with the inherited regulations easier." It is also interested in identifying practical measures to be taken to promote, or remove obstacles to, responsible innovation in consumer financial services markets.
The Bureau announced that it will also consider practical measures to make it easier for firms, especially smaller ones, to comply with the inherited regulations.
 Suggestions Criteria
Commenters may consider suggesting provisions of regulations that should be:
  • Simplified, rationalized, or consolidated;
  • Relaxed, modified, or eliminated, perhaps for smaller firms or certain classes of transactions, without undermining essential protections;
  • Updated to reflect current practices and technology;
  • Adjusted to avoid unintended consequences; or
Changed to remove an obstacle to responsible innovation.

Thursday, February 9, 2012

Fannie and Freddie: New Appraisal Portal–Deadline Approaches

A critical appraisal requirement deadline approaches![i]
The requirement went into effect on December 1, 2011. The deadline is March 19, 2012.

In This Article *
Starting the Registration Process
-Registering with Fannie Mae
-Registering with Freddie Mac
Accessing the UCDP Portal
Using the UCDP Portal
What to Expect from Lenders
Important Dates

On and after March 19, 2012, Fannie Mae and Freddie Mac (GSEs) will mandate compliance with their new Uniform Mortgage Data Program® (UMDP Program).[ii] The UMDP Program has been developed under the direction of their regulator, the Federal Housing Finance Agency.
The UMDP Program implements uniform appraisal and loan delivery data standards that are meant to support data accuracy and integration of mortgage data. Actually, the UMDP Program implements two of Fannie Mae's Loan Quality Initiative (LQI) objectives: electronic submission of appraisal data and collection of additional loan data in an updated format. Thus, the UMDP Program is an intrinsic part of the LQI requirements.
The UMDP Program includes:
· Uniform Appraisal Dataset (UAD): standardizes key appraisal data elements.
· Uniform Collateral Data Portal® (UCDP®): electronic collection of appraisal data.
· Uniform Loan Delivery Dataset (ULDD): leverages MISMO Version 3.0 standard. [iii]
In this article, I will pay particular attention to the Uniform Collateral Data Portal® (hereinafter, UCDP Portal).[iv] The UCDP Portal was activated in June 2011. This is a single portal for submitting data electronically of an appraisal file. Lenders must use the UCDP Portal to those data files, including the Uniform Appraisal Dataset (UAD),[v] when applicable, before the delivery date of the mortgage to Fannie Mae and Freddie Mac.
Appraisal report forms for all conventional mortgages delivered to the GSEs on or after March 19, 2012 must be transmitted through the UCDP Portal (prior to the delivery date of the mortgage) under these two conditions:
  • The loan application is dated on or after December 1, 2011, and
  • An appraisal report is required.
Variances and waivers will not be given to a lender from either GSE for the subject data, if a lender is not able to submit an appraisal before a single delivery or is not ready by the announced effective dates.
The loans subject appraisal data upload to the UCDP Portal at this time are conventional loans sold to Fannie and Freddie. FHA, VA, and Rural Development mortgages are excluded from the UCDP Portal requirement. Mortgage brokers cannot register for UCDP Portal.[vi]
There are three user categories that will access the UCDP Portal:
  • Lenders that have an existing Fannie Mae Seller/Servicer Number
  • Correspondents that do not have an existing Fannie Mae Seller/Servicer Number
  • Agents (Appraisal Management Companies, Appraiser Vendors)
There are many “moving parts” to the UMDP Program, but we will highlight the UCDP Portal.
The rule of thumb is, as follows: if an appraisal is required, the appropriate appraisal report form should be transmitted via the UCDP Portal for all conventional mortgages with application received dates on or after December 1, 2011 for loans delivered to the GSEs on or after March 19, 2012.