It seems like it was just New Year’s, and now we’re staring at another holiday. Don’t forget that Monday, January 17 is a federal holiday, so “this date cannot be included in counting the seven business day waiting period from when the initial TIL was provided to consummation. When redisclosure of the TIL is required, this date also cannot be included in counting the three business day period from when a revised TIL was provided to a borrower to consummation.” A GMAC announcement reminded me of that.

I had one comment about the White House losing value. “You are absolutely correct that the White House, like the rest of American homes, has gone down in value by 24%. In fact some areas would be happy with a decline of only 24%. But, unlike the rest of America, the White House was able to increase its HELOC by about $5 trillion dollars while everyone else had their lines frozen.” So wrote a principal of Two River Mortgage in New Jersey.

If anyone out there knows of a mid-level Secondary Marketing manager in the Wisconsin area looking to join a good-sized mortgage company, they should check out Consumer Loan Services, LLC. The company is a credit union service organization (CUSO) mortgage operation owned by Marine Credit Union in La Crosse which has been around since 1949. Originations come from Marine Credit Union but also from credit unions and small banks in 7 states. CLS is also building a portfolio by private-label servicing for its correspondent clients, a good niche these days. The position will direct investor development, correspondent relations, and investor communications. If you’re interested contact the president Jay Garten at    [email protected] 

CitiMortgage rolled out their first view of the 4/1 Reg. Z requirements governing loan originator compensation and steering. Citi, which will announce more details in the future, notes that “the requirements prohibit a loan originator from receiving compensation from both the consumer and any other person (including the lender) on a given transaction. Furthermore, a loan originator is prohibited from steering a consumer to a transaction based on the fact the originator will receive greater compensation from the creditor in that transaction than in other transactions the originator offered or could have offered to the consumer, unless the transaction is in the consumer’s interest.” Compensation will be paid via one of two distinct sources: borrower paid compensation, or lender paid compensation. Citi informs their clients that “the choice of compensation source is still within your control and can vary from one transaction to the next. For example, you may use borrower paid compensation on one transaction while the next transaction may use lender paid compensation.”

Citi’s statement said, “The amount of compensation is negotiated between you and your borrower(s) and can vary from one transaction to the next. The amount of compensation will be based on a set percentage of the loan amount and cannot vary from one transaction to the next. The borrower may use credits from the interest rate chosen to pay for third party fees, but may not be used to cover your compensation. The borrower may use credits from the interest rate chosen to pay for third party fees. The borrower may pay discount points to reduce the note rate. The borrower may pay discount points to reduce the note rate. The borrower must pay the broker compensation from their own funds or from proceeds of the new loan. The compensation cannot come from the borrower. You may offer concessions, reduce your fees, or pay for tolerance violations. You may not reduce your compensation by offering concessions or paying for tolerance violations.

“The regulation prohibits steering a consumer to a loan based upon the fact that an originator will receive greater compensation from the creditor in that transaction than in other transactions the originator offered or could have offered to the consumer, unless the transaction is in the consumer’s interest. The regulation provides safe harbor for the loan originator if: The consumer is presented with loan options for each type of transaction (i.e. fixed, ARM and reverse mortgage) in which the consumer expressed an interest; The loan options are obtained from a significant number of the creditors with which the loan originator regularly does business; and the loan options must include: the loan with the lowest rate; the loan with the lowest rate without negative amortization, a prepayment penalty, interest-only payments, a balloon payment in the first 7 years of the loan, a demand feature, shared equity, or shared appreciation; and the loan with the lowest total dollar amount for origination points or fees and discount points. While utilizing the safe harbor option is not mandatory, compliance with anti-steering is mandatory.”

In a story from the Financial Times, Citigroup is seeking buyers for CitiFinancial, the largest consumer finance company in the US. “Likely bidders include private equity groups and other finance companies such as JC Flowers, TPG, KKR, Blackstone, Centerbridge, and Cerberus.” Back in August Fortress Investment Group bought American General Finance, the consumer finance arm of AIG. CitiFinancial has about 1,500 branches and a couple million customers, even after closing 300 branches last year and renaming the 1,500 “outlets” OneMain Financial.

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