Marvin Stone, Senior Vice President of Business Integration at Stewart Title, addressed members of the Houston Mortgage Bankers Association at their July 8 luncheon meeting held at Maggiano’s restaurant. Stone’s presentation focused on sweeping changes to the Truth in Lending documents mandated for 2015 by the Consumer Financial Protection Agency. Originally scheduled to take effect on August 1, the changes have been rescheduled to take effect on October 3.

According to Stone, the new TIL procedures and forms will change the mechanics of the home purchase process for lenders, title companies, realtors, and consumers. “Any change to the loan could trigger a delay of three business days and changes in fees before or at closing will necessitate a new closing statement and more significant delays.”

 “The full impact of these changes is not yet completely understood,” Stone said. “I believe that 92-percent of lenders, title companies, builders and realtors are prepared but there are many operational details still to be addressed.”

Stone urged lenders and title companies to come together and work very closely to smooth the transition. “Realtors are expecting the lenders and title companies to take the lead on this,” he said. “We need to set realistic expectations with realtors on the extended time frame for closing, changes, etc. so they can educate their clients.”

“We were thrilled and honored that Marvin was able to juggle his schedule to accommodate our July monthly luncheon,” said Bill Dawley, HMBA President and SVP/Residential Lending Production at Amegy Mortgage Company. “The minute the CFPB issued their bulletin on these new changes in April of 2012, Stewart Title appointed Marvin as their CFPB Program Manager. This shows you the confidence that one of the top title agencies around has in Marvin.”

The Houston Mortgage Bankers Association installed their 2015-2016 board of directors in a luncheon meeting held on June 10 at Maggiano’s restaurant near the Galleria. Association president Mike McFarland passed the leadership baton to new president Bill Dawley who introduced in-coming officers Vice President Greg Burkett, Treasurer Kevin Polivka and Secretary Sheree Gilbert; past presidents McFarland, Trey Bell, and David Bravo; and directors Mack Gibson, Kittie Guggenheim, Candy Lewis, Lisa Rogers, and Joe Thompson.

Featured speaker Tom Tallent, President of the Texas Mortgage Bankers Association, thanked McFarland and the outgoing leadership for their service and praised their efforts to raise awareness about the important changes coming to Truth in Lending documents on August 1. “Most leaders of the Realtor community are now addressing the changes and working to get their offices ready.” He sounded a cautionary note as well, saying, “I don’t see that same level of awareness within the builder community and that causes me concern. The majority of purchase contracts written in July will be subject to these new regulations and everyone needs to prepare.”

Dawley thanked HMBA staff member Michelle Martin for her help and then noted the unique advantage of having three former presidents serving as directors on the in-coming board. “Their collective insight and experience makes our board exceptionally effective,” he said.

HMBA is a non-profit organization dedicated to promoting sound business practices and integrity in origination, lending and servicing of mortgage loans through discussion forums, networking opportunities, and continued education.  For more information about HMBA, visit houston-mba.com.

Major changes are in store for consumers as they deal with mortgage companies and title companies in real estate transactions beginning August 1, 2015. The Consumer Financial Protection Bureau (CFPB), created to protect and inform the consumer, has restructured the process of applying for a home loan through the closing of the loan. The Truth in Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA) are becoming the TILA RESPA Integrated Disclosures (TRID).

The goal of the CFPB is to help consumers by making all forms look similar, guard against hikes in charges at closing and help consumers understand future obligations. These goals are accomplished by:

1. Changing and combining the Good Faith Estimate and Initial Truth in Lending forms into a new form called the Loan Estimate (LE). There are limits on the amount of variance of fees once the LE has been provided to the consumer.
2. Changing and combining the HUD-1 Settlement Statement and Final Truth in Lending forms into a new form called the Closing Disclosure (CD).
3. The LE and CD are very similar in format and information provided and can be easily compared to make sure that the fees that are disclosed at the beginning of the transaction are the same at the closing of the loan.
4. There are specific timeframes for the delivery of the LE and CD to allow the borrower to review the forms prior to any action on the loan. The most significant timeframe requirement is a three-day waiting period after the receipt of the CD before the closing can take place which assures the borrower adequate time to review and prepare for closing.

The new requirements contain many good measures to ensure the consumer increased time to review the documentation and provide a more easily understood process. However, the changes are not insignificant for mortgage companies and title companies to incorporate into their business processes and there are some duties and responsibilities that have been shifted between the two industries.

Initially, through August and September, mortgage and title companies will have loans closing under the pre-TRID and TRID forms which may lead to some confusion. Also, with the increased requirements for delivery of the LE and CD, homebuyers and real estate agents can expect a longer loan and closing process. The goal of the changes is to provide a better experience for the consumer purchasing a new home – which may come at the price of a slower process. 

Recently, the Houston Mortgage Bankers Association held the second in a series of seminars designed to prepare mortgage, title and real estate professionals for sweeping changes coming to loan and closing documents (Truth in Lending Act disclosures) on August 1.

The April 14^th session, held at Stewart Title Guaranty Company, 1990 Post Oak Blvd. targeted lending industry professionals and presented an in-depth review of the new Loan Estimate and Closing Disclosure documents, the different requirements that will change the delivery time-frames for these documents, and an assessment of these changes’ impact on the entire mortgage process. Seminars developed for title company professionals and Realtors are planned for future dates to be announced.

Bill Dawley, HMBA Vice President and SVP Residential Lending Production, Amegy Mortgage Company, L.L.C., moderated a panel of leading industry experts that included Mike McFarland, current HMBA President and Senior Loan Officer, Legacy Mutual Mortgage; Brandon Collins, a real estate attorney with M.D. Gibson & Assoc., P.C.; Dawn Lewallen, Compliance Counsel, Senior Underwriter, Stewart Title Guaranty Company; and Dayna McElreath, Vice President of Operations, Sente Mortgage.

The new TILA disclosures are part of a wide-ranging overhaul of the mortgage process, according to McFarland. “We want to ease this change for everyone in our industry, including Realtors,” he said. “The good news is that while these changes are significant, they eliminate the confusion and frustration that consumers have with the present loan and closing documents. The new docs are very user-friendly - simple, succinct and clearly referenced to each other, unlike the documents we use now.”

“It’s vital that all of us – lenders, title people, and especially Realtors, understand the ramifications of these new TILA disclosures and work together to educate and guide consumers through the process. I say ‘especially Realtors’ because it’s Realtors who are on the front lines with this – they introduce buyers and sellers to the process and are in first position to prepare them for potential issues along the way. Realtors must be knowledgeable to help their customers understand the big changes in the way the contracts must be written, particularly the time frames for contract changes and closing dates. For instance, I see 45-day closings as the new normal after August 1, and that’s a huge change from the way we’re writing contracts now.”

“The key to all this is going to be knowledge and preparation,” McFarland said in closing. “That’s why we at HMBA want everyone in our industry to learn about these new disclosures.”

Former Astros pitcher, manager, and major league baseball broadcaster Larry Dierker addressed the Houston Mortgage Bankers Association at the group’s monthly luncheon meeting held April 8^th at Maggiano’s restaurant near the Galleria.

Introduced by HMBA president Mike McFarland, Dierker received numerous rounds of applause as he regaled the audience with tales about his years with the Houston Colt.45s and Houston Astros, and his career as a major league baseball broadcaster. The Colt.45s signed Dierker at age 17 and he pitched from 1964 to 1977 for the Houston Colt .45s/Astros and then the St. Louis Cardinals. He managed the Astros for five years from 1997 to 2001 and was elected National League Manager of the Year in 1998. Dierker served as a color commentator on the Astros' radio and television broadcasts from 1979 to 1996 and again from 2004 to 2005.

At the conclusion of Dierker’s presentation, McFarland presented him with a contribution from HMBA to Cy Hope, a non-profit organization that works to improve the lives of economically-challenged children in the Cypress Fairbanks Independent School District.