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January 2010 NEWSLETTER


ICC News  James Dimon, Chairman of the Board and

ICC NEWS Chief Executive Officer, JPMorgan Chase &
News of Note Company
Compliance Notes  John J. Mack, Chairman of the Board, Mor-
Companies wishing to take advantage of Compli- gan Stanley
Other News anceEase’s third-party verification system, at no
additional charge to your existing CE contract,  Mr. Brian T. Moynihan, Chief Executive Offi-
Privacy & Security please contact customer service to access ICC’s cer and President, Bank of America Corpora-
seamless CE link program. tion
The pointy-headed academics and other
Publications of Interest “partisan” groups were also represented:
Once again, it is time to consider the implications
Connections of disaster planning, including business continuity  Mark Zandi, Chief Economist and Co-
contingency planning. ICC will be pleased to re- founder, Moody's
Interesting Links
view your business contingency plans at no  Kenneth T. Rosen, Chair, Fisher Center for
charge. Please contact customer service to make Real Estate and Urban Economics, Univer-
your review arrangements. sity of California, Berkeley
Thank you for your continuing business. We  Julia Gordon, Senior Policy Counsel, Center
Money rates for end of month count on your referrals -- please don't keep us for Responsible Lending
January 2010 as reported in the a secret from friends and associates who
Wall Street Journal could benefit from our services!  C.R. "Rusty" Cloutier, President and Chief
Prime 3.25000% Executive Officer, MidSouth Bank, N.A.; Past
Chairman, Independent Community Bankers
6 month Libor 0.38438% NEWS OF NOTE Association
Federal Reserve Statistical
release H.15 for January 15, BERNANKE CONFIRMED AMONG TURMOIL And we could hardly leave out the politicians;
2009 (For Section 32 purpose)
In spite of the media-driven grandstanding by  Eric H. Holder, Jr., Attorney General, U.S.
Treasury Securities many Senators seeking media face-time and the Department of Justice
chance to openly criticize Fed Chairman Bernanke
1 Yr.` 0.330% for the current economic disaster, Bernanke was  Lanny A. Breuer, Assistant Attorney General,
2 Yr. 0.890% confirmed for another four-year term by a vote of Criminal Division, U.S. Department of Justice
3 Yr. 1.440% 70 – 30. There were major criticisms of the Fed’s
lack of transparency and its continued push for
 Sheila C. Bair, Chairman, U.S. Federal De-
5 Yr. 2.440%
posit Insurance Corporation
7 Yr. 3.170% independence from Congressional and Admini-
10 Yr. 3.700%
stration oversight. The role of the Fed versus the  Mary L. Schapiro, Chairman, U.S. Securities
traditional regulatory agencies was also a sticking and Exchange Commission
20 Yr 4.480%
point as was their artificially low Federal Funds
30 Yr 4.580% Target Rate. Faced with a choice of confirming  Lisa Madigan, Attorney General, State of
Bernanke or listening to the likes of ultra-left winger Illinois
George Soros, the Senate took the only course
*Note: all rates are for reference possible and confirmed Bernanke. Whether or not  John W. Suthers, Attorney General, State of
only; you may check the actual Bernanke can stave-off an audit of the Federal Colorado
rates at: Reserve, maintain independence from those who want to influence the Fed’s actions, secure a posi-  Denise Voigt Crawford, Commissioner, Texas
releases/h15/ tion as the chief regulator – and control unemploy- Securities Board and President, North Ameri-
ment and potential inflation is yet to be seen. can Securities Administrators Association, Inc.

THE DOG AND PONY SHOW  Glenn Theobald, Chief Counsel, Miami-Dade
County Police Department; Chairman, Mayor
The Financial Crisis Inquiry Commission held their Carlos Alvarez Mortgage Fraud Task Force
first public hearings to examine the root causes of
CONTACT ICC the financial crisis. The ringmaster of this circus And, of course, all of the testimony was pre-scripted
was Phil Angelides, a liberal democrat party hack and non-revealing lest the testimony be used in a
Interactive Computer Corp. from California. The list of actors was long and criminal or civil court proceeding against the person
Phone: 888-437-3627 distinguished; including such luminaries as: and their firm. Or, heaven forbid, used to make a
Fax: 888-242-9622 political statement in an election-cycle year.
Editor  Lloyd C. Blankfein, Chairman of the Board and Chief Executive Office, Goldman Sachs (Continued on page 2)
Page 2

(Continued from page 1) and Freddie Mac to influence U.S. economic

Noticeably absent were those who really were policy. “The Russians made a ‘top-level ap-
responsible for much of the legislation which re- proach’ to the Chinese ‘that together they
sulted in the economic turmoil. Specifically, Barney might sell big chunks of their GSE holdings to
Frank (D-MA), Chairman of the House Financial force the U.S. to use its emergency authori-
Services Committee and Christopher Dodd (D-CT, ties to prop up these companies.” Just an-
Chairman of the Senate Banking Committee. other consequence of poor underwriting
making the United States economy – and
Also absent were representatives of the GSEs foreign policy – vulnerable to manipulation.
who hold the majority of the nation’s mortgages
within their grasp: Fannie Mae and Freddie Mac.  HUD’s big mouth … HUD’s OIG (Office of
Both of which stand accused of cooking the books Inspector General) issued a press released
to enrich their executives and of pandering to Con- noting that they had served document pro-
gress by relaxing the underwriting standards for duction subpoenas on 15 mortgage compa-
loans that they purchased. nies that had higher than average rates of
All-in-all, this was not a bi-partisan examination of mortgage default and insurance claims.
the facts as represented to the American public, There is no allegation of abusive lending
but a partisan look at avoiding blaming those who practices and the OIG wanted to discover if
were really responsible: the politicians who en- any abuses were present. The press release
abled this fiasco with their demands for unsound was made apparently without thinking of the
underwriting activities, the government bureau- reputational risk to the mortgage companies
crats who shirked their regulatory oversight re- that might ensue when the mainstream me-
sponsibilities and those who operated on the basis dia highlighted, what appeared to them, a
of self-interest and greed. regulatory action. The press release can be
found at
For those wishing to see this Kabuki Theatre/ p o r t a l / H U D / p r e s s /
Charade, you might want to visit the FCIC’s web- press_releases_media_advisories/2010/
site at There are links to the HUDNo.10-005.
self-serving testimony of the participants.
 Obama Administration continues to play
IN PLAY: WHAT IS GOING ON? politics with housing … As if the govern-
ment has not created enough havoc with its
 Senator Dodd becomes more dangerous affordable lending initiatives and threats
… With the news that embattled Senator against those financial institutions that fail to
Christopher Dodd (D-CT) has decided not to make loans to minorities and the disadvan-
stand for re-election; one wonders how dan- tages, the Department of Justice has an-
gerous the Chairman of the Senate Banking nounced the creation of the “Fair Lending
Committee might become now that he no Unit.” One only wonders: fair to whom? Of
longer needs to pander to his constituents or course the announcement was made at
the special interests that provide campaign Jesse Jacksons’ Rainbow Push Coalition’s
funds and voter support. Dodd has a some- Wall Street Conference. While we are all
what checkered background as a “Friend of against predatory lending practices, not ac-
Angelo” and as one-half of the famous Ken- counting for the true credit risks when under-
nedy-Dodd Waitress Sandwich. Should the writing mortgage loans is what initiated and
democrats prevail in replacing Dodd, the prime exacerbated the mortgage meltdown. For a
candidate is likely to be the well-respected copy of the Assistant United States Attorney
Richard Blumenthal whose prominent role in General Thomas Perez’s remarks, they can
the ABSCAM congressional corruption probe be found at
signals that he is a tireless “law and order” tp_rainbow_push.pdf.
crusader. Blumenthal’s junior status precludes
chairing any prominent committee.  FDIC’s political idiocy … Once again, we
see Administration-style politics rear its ugly
 Dangerous beyond belief … The precise head in regulatory agencies. In this case, the
reason liberal Barney Frank, Chairman of the FDIC is proposing to link employee compen-
House Financial Services Committee is so sation programs to FDIC insurance assess-
dangerous to the mortgage industry is be- ments. “The Board of Directors of the Federal
cause he believes that “Fannie Mae and Deposit Insurance Corporation (FDIC) today
Freddie Mac are ‘public policy’ instruments of approved an Advance Notice of Proposed
the government.” Frank and his fellow col- Rulemaking (ANPR) seeking input on
leagues believe that the GSEs are their per- whether certain employee compensation
sonal piggy bank and can be manipulated for structures pose risks that should be captured
political purposes. in the deposit insurance assessment pro-
 Global economic warfare: Fannie Mae and gram. The press release on “Incorporating
Freddie Mac targeted … Former Treasury Employee Compensation Criteria into the
Secretary Henry Paulson’s new book “On the Risk Assessment System” can be found at
Brink” claims that Russia and China were said
to be using their investments in Fannie Mae (Continued on page 3)
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(Continued from page 2) association is about to launch. Little is known

pr10005.html. Comments on the program about this new group other than it will be
from the Comptroller of Currency, John headed by Marc Savitt who served as the
Dugan, may be found at President of NAMB. (National Association of
ftp/release/2010-3a.pdf. Mortgage Brokers).
 Only the shadow knows … Everybody is THE FEDERAL RESERVE
waiting for the other shoe to drop – the
The FOMC (Federal Open Market Committee)
shadow inventory being held by financial
Announcement for the January 26th/27th
institutions and investors, knowing that they
meeting …
are foreclosure candidates, but preferring to
accept little or nothing from homeowners Nothing new and exciting was announced at the
and renters who are living almost rent free January FOMC meeting. Perhaps this is due to
and maintaining the property in a somewhat the uncertainty surrounding Chairman Bernanke’s
salable condition. Media estimates put the pending confirmation or that the FOMC statement
shadow inventory somewhere near 2.4 mil- was scheduled to be issued on the same day that
lion homes and condos, potentially leading President Barack Obama addressed the nation
to another drop of 10% -15% in market with his “State of the Union” speech.
prices, depending how fast they are fed into
the foreclosure process. Until the govern-  The action and forward outlook … “The
ment and regulatory agencies permit hous- Committee will maintain the target range for
ing sales to seek their own level – without the federal funds rate at 0 to 1/4 percent and
artificial stimulus efforts such as tax incen- continues to anticipate that economic condi-
tives and funny-money accounting methods tions, including low rates of resource utiliza-
– the housing market will not stabilize to the tion, subdued inflation trends, and stable
point of providing consistent valuations for inflation expectations, are likely to warrant
loan collateral. The key to market thinking exceptionally low levels of the federal funds
should be that valuations should regress to rate for an extended period.”
their historic mean so that affordable hous-
“Information received since the Federal Open
ing can be offered to willing buyers and fi-
Market Committee met in December sug-
nanced through traditional loans. gests that economic activity has continued to
 Adding insult to injury … With all of the strengthen and that the deterioration in the
complex paperwork bogging down the fore- labor market is abating.”
closure process, it appears that lenders are “Household spending is expanding at a mod-
now beginning to concentrate their attention erate rate but remains constrained by a weak
on pursuing individuals for deficiency judg- labor market, modest income growth, lower
ments arising from foreclosure activities. housing wealth, and tight credit. While bank
Anyone who did not clear their debt in a lending continues to contract, financial mar-
bankruptcy filing or is protected by state laws ket conditions remain supportive of economic
is at risk – sometimes years after the original growth. Although the pace of economic re-
event – and when they may be earning more covery is likely to be moderate for a time, the
income. The prime targets are said to be Committee anticipates a gradual return to
those who made a rational “walk-away” deci- higher levels of resource utilization in a con-
sion to quit paying the mortgage on a loan text of price stability.”
that was significantly more that the value of
the property. These people did not neces-  Housing … There was no specific mention
sarily encounter hardships or experience of the housing market in the FOMC an-
cash flow problems, but decided it made nouncement, perhaps more information re-
economic sense to send the keys back. garding this key component of the economy
Considering these people are likely to be with be available when the FOMC meeting
employed, they become vulnerable to those notes are released.
lenders and others who are turning their
deficiencies into cash by selling the “hunting  Inflation … “With substantial resource slack
rights” to others on a discounted basis. continuing to restrain cost pressures and with
longer-term inflation expectations stable, infla-
 Roofies becoming more popular …No, not tion is likely to be subdued for some time.”
the date rape drug – but the Retaining Occu-
pancy on Foreclosure (ROOF) agreements It should be noted that the vote to accept the
to allow people to rent back their foreclosed FOMC position was not unanimous. “Voting
homes, thus providing a lender with some against the policy action was Thomas M.
income and a tenant who will keep the prop- Hoenig, who believed that economic and
erty in good repair until the lender decides to financial conditions had changed sufficiently
sell the property into a better market. that the expectation of exceptionally low lev-
els of the federal funds rate for an extended
 Another new trade association … With all period was no longer warranted.”
of the economic difficulty facing the mort-
gage industry, it appears that a new trade (Continued on page 4)
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(Continued from page 3) remained quite elevated.”

 Weasel words … “The Committee will con-  The action and forward outlook … “The
tinue to evaluate its purchases of securities Committee maintained the federal funds
in light of the evolving economic outlook and target range at 0 to 1/4 percent and, based
conditions in financial markets.” on the outlook for a slow economic recovery,
“The Federal Reserve is prepared to modify decided to reiterate its anticipation that eco-
these plans if necessary to support financial nomic conditions, including low levels of re-
stability and economic growth.” source utilization, subdued inflation trends,
and stable inflation expectations, were likely
 Future plans include … “To provide sup- to warrant exceptionally low rates for an ex-
port to mortgage lending and housing mar- tended period.”
kets and to improve overall conditions in
private credit markets, the Federal Reserve Translation: The Federal Reserve, following
is in the process of purchasing $1.25 trillion its long-standing policy of not telegraphing its
of agency mortgage-backed securities and interest rate moves is saying nothing officially
about $175 billion of agency debt. In order to – even though various Fed members are
promote a smooth transition in markets, the going about claiming that a hike seems indi-
Committee is gradually slowing the pace of cated somewhere in the near future. As they
these purchases, and it anticipates that say, go figure!
these transactions will be executed by the “In the forecast prepared for the December
end of the first quarter. FOMC meeting, the staff raised its projection
“In light of improved functioning of financial for average real GDP growth in the second
markets, the Federal Reserve will be closing half of 2009 somewhat, and it also modestly
the Asset-Backed Commercial Paper Money increased its forecast for economic growth in
Market Mutual Fund Liquidity Facility, the 2010 and 2011.”
Commercial Paper Funding Facility, the “The staff again anticipated that the recovery
Primary Dealer Credit Facility, and the Term would strengthen in 2010 and 2011, sup-
Securities Lending Facility on February 1, as ported by further improvement in financial
previously announced.” conditions and household balance sheets,
“In addition, the temporary liquidity swap continued recovery in the housing sector,
arrangements between the Federal Reserve growing household and business confidence,
and other central banks will expire on Febru- and accommodative monetary policy, even
ary 1.” as the impetus to real activity from fiscal pol-
icy diminished. However, the projected pace
“The Federal Reserve is in the process of of real output growth in 2010 and 2011 was
winding down its Term Auction Facility: $50 expected to exceed that of potential output
billion in 28-day credit will be offered on Feb- by only enough to produce a very gradual
ruary 8 and $25 billion in 28-day credit will reduction in economic slack.”
be offered at the final auction on March 8.
The anticipated expiration dates for the  Housing … “The housing sector showed
Term Asset-Backed Securities Loan Facility continuing signs of improvement, though
remain set at June 30 for loans backed by housing starts had leveled out after increas-
new-issue commercial mortgage-backed ing earlier in the year and activity remained
securities and March 31 for loans backed by quite low.”
all other types of collateral.” “Sales of new homes increased significantly
Once again, we caution readers that careful ob- in recent months, a development that, given
servation of the financial markets in and around the slow pace of construction, reduced the
cut-off dates is important as Fed operations can inventory of unsold new homes; sales of
greatly affect both liquidity and rates. existing homes rose strongly.
For those wishing to read the FOMC meeting Note: Let us not forget that the housing mar-
announcement in context, they can be found at ket is being flooded with attractively priced foreclosures, stimulated by one-time govern-
monetary/20100127a.htm. ment purchase incentives, and the FHA is
still insuring loans with little or no equity. The
The FOMC (Federal Open Market Committee) growth in homes sales does not appear to be
Minutes for the December 15th/16th meeting sustainable. It should also be noted that a
Nothing new and exciting was announced at the great deal of the housing inventory is being
December FOMC meeting. According to the withheld from the marketplace due to the
FOMC, “The information reviewed at the Decem- reluctance of lenders and investors to add
ber 15-16 meeting suggested that the recovery in additional losses to their balance sheets as
economic activity was gaining momentum. The would be required if a foreclosed property
pace of job losses slowed noticeably in recent were sold. Many financial institutions appear
months, and total hours worked increased in to be purposely leaving homeowners in-
November; however, the unemployment rate (Continued on page 5)
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(Continued from page 4) distress sales continue. Though the near-term

place as they hope for better housing condi- outlook remains uncertain, participants gener-
tions in the near future. Unfortunately, what ally thought the most likely outcome was that
we can expect is for housing prices to re- economic growth would gradually strengthen
gress to some mean which tends to indicate over the next two years as financial conditions
the home prices have further to fall, a mini- improved further, leading to more-substantial
mum of 25-45% according to trending fore- increases in resource utilization.”
casts. Without the artificial stimulus to banks
which allow them to continue to hold property To politicians, more government and more
on the books, we might see an increasing legislation is always the answer. Unfortu-
number of problematical institutions which nately we are facing the massive restructur-
are technically insolvent or unsound. ing of our financial regulatory agencies and
continuing interference of the government in
“In the residential real estate sector, home what should be free-market transactions.
sales and construction had risen relative to Why the government continues to artificially
the very low levels reported in the spring; bolster sagging financial institutions instead
moreover, house prices appeared to be sta- of letting them fail continues to be the un-
bilizing and in some areas had reportedly asked question.
moved higher. Generally, the outlook was for
gains in housing activity to continue. How-  Non-residential real estate … “CRE activity
ever, some participants still viewed the im- continued to fall markedly in most parts of the
proved outlook as quite tentative and again country as a result of deteriorating fundamen-
pointed to potential sources of softness, in- tals, including declining occupancy and rental
cluding the termination next year of the tem- rates, and very tight credit conditions. Pros-
porary tax credits for homebuyers and the pects for nonresidential construction re-
downward pressure that further increases in mained weak.”
foreclosures could put on house prices. “In contrast, conditions in the nonresidential
Moreover, mortgage markets could come construction sector generally remained quite
under pressure as the Federal Reserve's poor. For instance, real outlays on structures
agency MBS purchases wind down.” outside of the drilling and mining sector
“Housing construction held fairly steady in plunged in the third quarter. Also in the third
recent months, while demand for housing quarter, vacancy rates on nonresidential prop-
continued to firm. Single-family housing erties rose further, and property prices contin-
starts remained roughly flat from June to ued to fall amid difficult financing conditions.”
November at levels only modestly above Commercial lending is projected to be the
those reported earlier in the year. In the next major blow to the financial marketplace
much smaller multifamily sector, where tight as securitized leases experience defaults in
credit conditions persisted and vacancies the underlying collateral.
stayed elevated, the average pace of starts
in October and November decreased some-  Lending … “Banks were raising new capital
what from the already very low rate in the and in some cases paying back funds re-
third quarter. In contrast, sales of existing ceived from the Troubled Asset Relief Pro-
single-family homes increased significantly gram. Bank loans, however, continued to
again in October. Sales of new homes also contract sharply in all categories, reflect-
rose in October after two months of little ing lack of demand, deterioration in poten-
change. With sales continuing to outpace tial borrowers' credit quality, uncertainty
construction, the inventory of unsold new about the economic outlook, and banks'
homes declined to its lowest level in three concerns about their own capital posi-
years. The recent increases in sales likely tions. With rising levels of nonperforming
reflected improved fundamentals: The aver- loans expected to be a continuing source of
age interest rate on 30-year conforming fixed stress, and with many regional and small
-rate mortgages declined to less than 5 per- banks vulnerable to the deteriorating perform-
cent, and surveys suggested that house- ance of CRE loans, bank lending terms and
holds now expected home prices to be fairly standards were seen as likely to remain tight.”
stable over the next year. Although some
house price indexes declined a little in Sep- This is exactly the same scenario we saw
tember and October, they remained above with the TARP (Troubled Assets Relief Pro-
the troughs reached last spring. gram) funds were used by financial institu-
tions to acquire other financial institutions and
“Some participants remained concerned shore up their own balance sheets and core-
about the economy's ability to generate a self capital requirements rather than easing li-
-sustaining recovery without government quidity in consumer and commercial lending.
support. In particular, they noted the risk that
improvements in the housing sector might be  Inflation … “The staff forecast for inflation was
undercut next year as the Federal Reserve's nearly unchanged. The staff interpreted the
purchases of MBS wind down, the home- increases in prices of energy and nonmarket
buyer tax credits expire, and foreclosures and (Continued on page 6)
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(Continued from page 5) that maintaining very low short-term interest

services that recently boosted consumer price rates could raise inflation expectations or
inflation as largely transitory. Although the create instability in asset markets, they noted
projected degree of slack in resource utiliza- that it was important to remain alert to these
tion over the next two years was a little lower risks. All agreed that the path of short-term
than shown in the previous staff forecast, it rates going forward would depend on the
was still quite substantial. Thus, the staff con- evolution of the economic outlook.”
tinued to project that core inflation would slow
somewhat from its current pace over the next “The Committee emphasized that it would
two years. Moreover, the staff expected that continue to evaluate the timing and overall
headline consumer price inflation would de- amounts of its purchases of securities in light
cline to about the same rate as core inflation of the evolving economic outlook and condi-
in 2010 and 2011.” tions in financial markets.”

“Participants agreed that underlying inflation  Future plans include … “In the Committee's
currently was subdued and was likely to discussion of monetary policy for the period
remain so for some time. Some noted the ahead, all members agreed that no changes
risk that, over the next couple of years, to the Committee's large-scale asset pur-
inflation could edge further below the chase programs, or to its target range for the
rates they judged most consistent with federal funds rate, were warranted at this
the Federal Reserve's dual mandate for meeting, inasmuch as the economic outlook
maximum employment and price stabil- had changed little since the November meet-
ity; others saw inflation risks as tilted toward ing. Accordingly, the Committee affirmed its
the upside in the medium term.” intention to purchase $1.25 trillion of agency
MBS and about $175 billion of agency debt
The portent of deflation is almost as by the end of the first quarter of 2010 and to
strong as the prospect of increased infla- gradually slow the pace of these purchases
tion. Where we lapse into troubling defla- to promote a smooth transition in markets.”
tion depends on how the Fed reduces the
amount of money in circulation and the What is not mentioned by the Federal Re-
continuing fall in home values. serve and certainly not by the Treasury De-
partment, the federal government has pro-
“Most participants anticipated that substan- vided almost unlimited support to the GSEs
tial slack in labor and product markets, along Fannie Mae and Freddie Mac who control an
with well-anchored inflation expectations, estimated $5.4 TRILLION or more in mort-
would keep inflation subdued in the near gages and other assets. Something which
term, although they had differing views as to could drastically affect both the real estate
the relative importance of those two factors. marketplace and the financial industry.
Overall, many participants viewed the risks Unfortunately, we are seeing the Federal Re-
to their inflation outlooks as being roughly serve, in coordination with the Treasury Depart-
balanced. Some saw inflation risks as tilted ment, selectively release information that may not
to the downside, reflecting the quite elevated be complete or totally accurate. While we can see
level of economic slack and the possibility that the Fed, Treasury and Wall Street Wizards do
that inflation expectations could begin to not have a crystal ball, they do seem to have con-
decline in response to the low level of actual nections with each other – possibly leading to
inflation. But others felt that inflation risks subtle understandings that can influence the mar-
were tilted to the upside, particularly in the kets and financial fundamentals.
medium term, because of the possibility that
inflation expectations could rise as a result of For those wishing to read the FOMC meeting
the public's concerns about extraordinary announcement in context, they can be found at
monetary policy stimulus and large federal
budget deficits.” monetary/fomcminutes20091216.pdf.
Economists are notorious for presenting “on ICC’s Fed Watcher … Rising Inflation –
one hand … and on the other hand” scenar- Indication of a Fed Funds Rate Hike in the
ios so they appear to actually know what is immediate future?
happening -- which is often far from the fact.
Basis Points To Achieve
 Weasel words … “To keep inflation expec- A Neutral Inflationary Stance
tations anchored, all participants agreed that Month Ending 5-Year 10-year
monetary policy would need to be respon- Outlook Outlook
sive to any significant improvement or wors- November 2009 188 308
ening in the economic outlook and that the
Federal Reserve would need to continue to December 2009 264 380
clearly communicate its ability and intent to
begin withdrawing monetary policy accom- January 2010 222 351
modation at the appropriate time and pace.”
(Continued on page 7)
“Although members generally saw little risk
Page 7

(Continued from page 6) Institution Letter FIL-2-2010 which can be found

Last month we found that ICC’s Fed Watch indi- at
cated that it would take 264-basis points to fil10002.html.
achieve a neutral inflationary stance within the
five-year outlook and 380-basis points to achieve  On January 11th, the Fed made another $75
a neutral inflationary stance within the ten-year BILLION of TAF 28-day loans at a stop-out
outlook. This month we find that it would take 222 rate of 0.25% available to 121 bidders who
-basis points to achieve a neutral inflationary submitted applications for $38.531 billion in
stance within the five-year outlook and 351-basis loans. As with previous loan operations, not
points to achieve a neutral inflationary stance all loan funds were disbursed.
within the ten-year outlook. This is clearly an  On January 14th, the Department of the
indication of inflation and the need for the Federal Treasury announced President Obama’s
Reserve to raise rates in the near term. Of proposal to tax the banks, calling the tax a
course, the Fed’s official stance, according to “Financial Crisis Responsibility Fee.” This
their FOMC announcement, is to stay the course. fee (really a tax on all depositors, investors
But various members of the Fed continue to and counterparties) would require the largest
claim that a rate hike is necessary and probably and most highly levered Wall Street firms to
imminent. As noted in the FOMC minutes, Fed pay back taxpayers for the extraordinary
Governor Thomas M. Hoenig believes that assistance provided so that the TARP pro-
“economic and financial conditions had changed gram does not add to the deficit. The Treas-
sufficiently that the expectation of exceptionally ury Department’s “Fact Sheet: Financial
low levels of the federal funds rate for an ex- Crisis Responsibility Fee” (TG-506) can
tended period was no longer warranted.” This is be found at
the first appearance of a statement of negative releases/tg506.htm.
support for an existing policy in the current low-  On January 15, the OTS (Office of Thrift
interest regime.
Supervision) issued Regulatory Bulletin
It is believed that between the Federal Reserve Regulatory Bulletin RB 37-51 which an-
and the Treasury, they may hold up to 80% of 30 nounced the revision of Examination Hand-
-year notes yielding somewhere between 4% and book Sections 530, Liquidity Risk Manage-
4.5%. When the Fed stops their purchases in ment, and 540, Investment Securities. The
March, it is anticipated that the spread between bulletin also rescinds RB 32-32, Liquidity
the 10-year and 30-year notes will widen be- Management, dated December 9, 2003; and
tween 20 and 30 basis points. However, should TB 77, Sound Practices for Liquidity Man-
the market turn chaotic and turbulent, look to the agement, dated June 19, 2001. .
Fed to hold down rates by resuming some addi-  On January 21st, the regulatory agencies
tional purchases. issued their “funny money” accounting bulle-
Warning: In past times, we have seen higher tin “Final Rule for Regulatory Capital
rates as a harbinger of a recovery or inflation. Standards Related to Statements of Fi-
However, in these economically unstable times it nancial Accounting Standards Nos. 166
can also presage deflation as higher rates re- and 167.” The bulletin provides guidance for
duces demand and the housing slump increases. new accounting standards that make sub-
It should be noted that, due to the reduced liquid- stantive changes to how banking organiza-
ity in TIPS, an investor premium of up to 50-basis tions account for many items, including se-
points or more might be reflective of the current curitized assets, especially those which have
market conditions. been previously excluded from these organi-
zations' balance sheets and appeared in “off
Selected Federal Reserve and Regulatory balance sheet” accounts. This rule is effec-
Agency Operations… tive March 29, 2010. Banking organizations
may elect to comply with this final rule as of
On January 6th, the Federal Reserve and the the beginning of their first annual reporting
other regulatory agencies issued an “Advisory period that begins after November 15, 2010.
on Interest Rate Risk Management” which For those wishing to read the hyper-
seemed to be an indicator of future action by the technical rule, it may be found at http://
Federal Reserve in planning to raise the Federal
Funds Target Rate. “The financial regulators are PDFgate.cgi?WAISdocID=154519385936
issuing this advisory to remind institutions of su- +1+2+0&WAISaction=retrieve.
pervisory expectations regarding sound practices
for managing interest rate risk (IRR). In the cur- What the Fed, Treasury and Regulatory
rent environment of historically low short-term Agency members are saying…
interest rates, it is important for institutions to
have robust processes for measuring and, where  Vice Chairman Donald Kohn: “Monetary
necessary, mitigating their exposure to potential Policy in the Crisis: Past, Present, and
increases in interest rates.” The advisory bulletin Future” at the Brimmer Policy Forum,
can be found at American Economic Association Annual
newsevents/press/bcreg/bcreg20100107.pdf. Meeting, Atlanta, Georgia (January 3, 2010)
You may also wish to review FDIC’s Financial
(Continued on page 8)
Page 8

(Continued from page 7) FHA borrowers. At this time FHA is limiting the loss mitigation options that may be used to assist
speech/kohn20100103a.htm. borrowers facing imminent default to forbearance
 Chairman Ben S. Bernanke: “Monetary Pol- and FHA-HAMP. Mortgagee Letter 10-04ML can
icy and the Housing Bubble” at the Annual be found at
Meeting of the American Economic Associa- hudclips/letters/mortgagee/files/10-04ml.pdf.
tion, Atlanta, Georgia (January 3, 2010) Effective Date: Immediately
speech/bernanke20100103a.htm. STRICTER STANDARDS FOR MORTGAGEES
 Governor Elizabeth A. Duke: “The Economic WITH PROBLEM LOANS
Outlook” the Economic Forecast Forum, HUD has issued Mortgagee Letter 2010-03 to
Raleigh, North Carolina (January 4, 2010) advise that HUD will be using its regulatory author-
 ity to terminate a mortgagee’s authorization to
speech/duke20100104a.htm. underwrite single family loans in geographic areas
 KC Fed President Thomas Hoenig: “The 2010 where the lender has a high rate of early defaults
Outlook and the Path Back to Stability” at The and claims. “Every three months, HUD will review
Central Exchange Kansas City, Kansas the rate of defaults and claims on all FHA-insured
(January 7, 2009) single family loans. The review will analyze the
SpeechBio/HoenigPDF/Hoenig.01.07.10.pdf. performance of every participating mortgagee in
each geographic area served by a HUD field of-
 FDIC Chairman Sheila C. Bair: “Causes and fice. The review will be limited to loans with an
Current State of the Financial Crisis” before amortization commencement date within the pre-
the Financial Crisis Inquiry Commission, ceding 24 months.” “Regulations permit HUD to
Washington, D.C. (January 14, 2010) http:// terminate the Authority of any mortgagee having a default and claim rate for loans underwritten with
spjan1410.html. an amortization date within the preceding 24
 Vice Chairman Donald Kohn: “Focusing on months that exceeds 200% of the default and
Bank Interest Rate Risk Exposure” at the claim rate within the geographic area served by a
Federal Deposit Insurance Corporation's HUD field office, and also exceeds the national
Symposium on Interest Rate Risk Manage- default and claim rate.” The Mortgagee Letter con-
ment, Arlington, Virginia (January 29, 2010) taining program details, along with mitigation fac- tors and appeal procedures, may be found at
COMPLIANCE NOTES Effective Date: Immediately
Please note: Bill descriptions and links were HAMP GUIDANCE
accurate at the time of listing, but may have HUD and the Treasury Department have re-
been changed for administrative or legislative leased updated guidance for servicers participat-
reasons. Please refer to the latest version of ing in the Administration’s mortgage modification
the bill and seek guidance from qualified com- program. This guidance refines the documenta-
pliance counsel. ICC does not, under any cir- tion requirements in order to expedite conver-
cumstances, provide legal or implementation sions of current trial modifications to permanent
advice regarding legislation or regulatory mat- ones. More information can be found at https://
ters. Also keep in mind that future legislation
and regulatory responsibilities may be dramati- sd1001.pdf and the press release can be found at
cally altered in future actions and that regula-
tors and legislation may be rendered null and press/press_releases_media_advisories/2010/
void at any time. HUDNo.10-021.
Effective Date: Immediately Effective Date: Immediately
Once again, HUD has updated its FAQ REQUIREMENTS
(Frequently Asked Questions) on January 28, In response to the new 2010 RESPA rules, the
2010. The updated sections are “bolded” for easy VA is providing additional guidance via Circular 26
reference. The RESPA FAQ can be found at http:// -10-01 which covers the fees and charges a vet- eran may pay when obtaining a VA-guaranteed
resparulefaqs.pdf. home loan. The circular also announces new
Effective Date: Immediately documentation requirements for lenders and the
elimination of a previously required disclosure
HUD: IMMINENT DEFAULT GUIDANCE statement. More information may be found at
HUD has issued Mortgagee Letter 2010-04 to
define “imminent default” and provide guidance to circulars/26_10_1.pdf.
FHA-Approved servicers on how to assist those
Page 9

Last Day for Comments: February 1, 2010 number assignments on or after February 15,
2010. More information can be found at http://
FACILITY mortgagee/files/09-51ml.pdf.
The Federal Reserve is requesting public com- Effective Date: February 15, 2010
ments on proposed rulemaking which amends
Regulation D (Reserve Requirements of Deposi- NEW YORK – FORECLOSURE: FILING
tory Institutions) to authorize the establishment of INFORMATION
a “Term Deposit Facility” intended to provide the
Fed with another tool for managing monetary New York Senate Bill S.B. 66007 relating to home
policy. More information may be found at http:// mortgage loans, the crime of mortgage fraud, and appropriations to the New York State Housing
Trust Fund Corporation provides for filing certain
Effective Date: Immediately information with the Banking Department More
information can be found at http://
Last Day for Comments: February 16, 2010
HUD has implemented a temporary policy to
waive anti-flipping regulations in an effort to stabi- FFIEC – GUIDANCE ON REVERSE
lize home values and improve conditions in com- MORTGAGES
munities where foreclosure activity is high. The
policy was designed to expand access to FHA “The FFIEC (Federal Financial Institutions Exami-
mortgage insurance and allow for the quick resale nation Council) is requesting comments on Re-
of foreclosed properties. The regulations impose verse Mortgage Products: Guidance for Managing
strict conditions and guidelines to assure that Compliance and Reputation Risks. Comments will
predatory practices are not allowed. The press be used in the proposed rulemaking process.
release can be found at “The proposed guidance discusses the general
portal/page/portal/HUD/press/ features of, certain legal provisions applicable to,
press_releases_media_advisories/2010/ and consumer protection concerns raised by re-
HUDNo.10-011 and details of the waiver program verse mortgage products. In addition, it focuses
can be found at on the need to provide adequate information to
sfh/waivpropflip2010.pdf. consumers about reverse mortgage products; to
Effective Date: February 15, 2010 provide qualified independent counseling to con-
(Delayed from January 1, 2010) sumers considering these products; and to avoid
potential conflicts of interest. The proposed guid-
HUD – APPRAISAL STANDARDS ance also addresses related policies, procedures,
and internal controls and third party risk manage-
Mortgagee Letter 2009-28 “provides clarification ment. More information may be found at http://
and reaffirms Federal Housing Administration
(FHA) appraisal requirements related to appraiser 29882.htm.
independence and announces new requirements
pertaining to entities that are eligible to order ap- Last Day for Comments: February 16, 2010
praisals for FHA insured mortgages. The new
requirements set forth in this mortgagee letter will HUD – PROPOSAL RULE ON S.A.F.E.
be effective for all case numbers assigned on or COMPLIANCE
after February 15, 2010. The existing require- HUD is requesting comments on the standards
ments will remain in effect. ” Mortgagee Letter 09- relating to the S.A.F.E. (Secure and Fair En-
28 can be found at forcement Act of 2008) which affects mortgage
adm/hudclips/letters/mortgagee/files/09-28ml.doc. originator licensing. This is a hyper-technical
Effective Date: February 15, 2010 rule which mostly impacts state regulatory
(Delayed from January 1, 2010) agencies. More information can be found at
FHA – DUAL PURPOSE APPRAISAL FORM PDFgate.cgi?WAISdocID=937029210163+14+
Mortgagee Letter 2009-51 announces that the
FHA is adopting the Appraisal Update and/or Notice: February 16, 2010
Completion Report (Fannie Mae Form 1004D/
Freddie Mac Form 442/March 2005). This is a FOMC – FOMC MEETING MINUTES AVAILABLE
dual purpose form. Part A, Summary Appraisal The minutes of the January 26-27 meeting will be
Update Report, provides for updates of existing available on the Federal Reserve’s website after
appraisals when the appraiser concurs with the 2:00 p.m. (Eastern Standard Time). http://
original appraisal report and updates the ap-
praisal by incorporating the original appraisal fomccalendars.htm.
report. Part B, Certification of Completion, pro-
vides for compliance repair and completion in-
spections for existing and new construction dwell-
ings. This mortgagee letter is effective for all case
Page 10

Last Day for License Renewal: February 28, 2010 Last Day for Comments: March 12, 2010
According to the Washington State Department of The Federal Housing Finance Agency is propos-
Financial Institutions, the formal renewal period for ing a regulation with the specific purpose of in-
Mortgage Broker licenses ended December 31, cluding minority and women in all activities pro-
2009. Licensees who did not successfully renew moted by the GSEs; including Fannie Mae,
prior to December 31, 2009 have until February Freddie Mac and the Federal Home Loan Banks.
28, 2010 to reinstate their expired license. Until the More information can be found at http://
license is reinstated, the company cannot operate
as a Mortgage Broker in Washington. More infor- PDFgate.cgi?WAISdocID=248705118772+0+2
mation can be obtained at +0&WAISaction=retrieve.
Effective Date/Last Day for Comments:
Effective Date: March 1, 2010 March 15, 2010
Massachusetts Office of Consumer Affairs and “HOPE for Homeowners Program; Statutory
Business Regulation (OCABR) has revised the Transfer of Program Authority to HUD and Con-
security standards affecting those who own, li- forming Amendments to Adopt Recently En-
cense or use consumer’s personal information as acted Statutory Changes; Final Rule imple-
defined in the legislation. The regulations make ments the changes made to the HOPE for
clear that their approach to data security is a risk- Homeowners (H4H) program by the recently
based approach that is especially important to enacted Helping Families Save Their Homes
small businesses that may not handle a lot of per- Act of 2009.” More information can be found at
sonal information about customers. Under a risk-
based approach, a business, in developing a writ- PDFgate.cgi?WAISdocID=246335162748+0+2
ten security program, should take into account its +0&WAISaction=retrieve.
size, nature of its business, the kinds of records it
maintains, and the risk of identity theft posed by its FED Meeting Date: March 16, 2010
operations. The press release can be found at FOMC ONE DAY MEETING
e&L=1&L0=Home&sid=Eoca&b=pressrelease&f Federal Reserve’s Federal Open Market Com-
=20090817_idtheftregs&csid=Eoca and the re- mittee two day meeting. The announcement of
vised regulations may be found at http:// the meeting results will become available on the
w w w . m a s s . g o v / E o c a / d o c s / Federal Reserve website after 2:00 p.m. (EST) at
idtheft/201CMR1700reg.pdf. Press release on
“Final Data Security Regulations” can be found at fomccalendars.htm.
h t t p : / / w w w . m a s s . g o v / ?
pageID=ocapressrelease&L=1&L0=Home&sid=Eo Effective Date: March 31, 2010
ca. “If an entity uses a third party to handle data,
the contract must include safeguard provisions by Rhode Island House Bill H.B. 5704 enacts provi-
March 1, 2012. Existing contracts are not required sions of the federal Secure and Fair Enforcement
to be updated before March 1, 2012, but new or for Mortgage Licensing Act of 2009. Provisions
renewal contracts executed after March 1, 2010, include “Each mortgage loan originator licensee
must include the provision.” The updated FAQ shall, on or before March 31, 2010 and every
(Frequently Asked Questions) can be found at March 31st thereafter, file with the director or the director's designee evidence acceptable to the
idtheft/201CMR17faqs.pdf. Please Note: For those director or the director's designee that said loan
concerned about Safeguard provisions at ICC, you originator licensee has filed with the nationwide
may wish to review our contractual modification mortgage licensing system and registry a report
statement at of condition, which shall be in such form and shall
GLB_FTC1.htm. contain such information as the nationwide mort-
Effective Date: March 6, 2010 gage licensing system and registry may require
along with evidence of meeting all of the pre-
RHODE ISLAND – FORECLOSURE NOTICE scribed requirements. More information can be
found at
Rhode Island Senate Bill S.B. 1002A provides for HouseText09/H5704A.pdf.
a 45-day pre-foreclosure notice and sets forth the
disclosure requirements and the penalties for non-
disclosure. It is anticipated that the RI Department
of Business Regulation will publish a model fore-
closure form prior to the effective date. More infor-
mation can be found at
Page 11

Effective Date: April 1, 2010 Effective Date: April 5, 2010

HUD Mortgagee Letter 2010-02 notes that the
The provisions of Regulation-Z which require a FHA will collect an upfront mortgage insurance
subprime lender to implement escrow accounts premium of 2.25% (up from 1.75%) for FHA
for the first twelve months of a loan for site-built loans where the case number is assigned on or
homes are in effect. Review this legislation care- after April 5, 2010. The policy change will apply to
fully as the consequences of violating these rules premiums for purchase money and refinance
can be prohibitively expensive. The highlights of transactions, including FHA-to-FHA credit-
the final rule can be found at http:// qualifying and non-credit qualifying streamlined refinance transactions. More information may be
E1515A7162514E5EAD0C295B038E101F.htm found at
and the 419-page Draft Federal Register Notice hudclips/letters/mortgagee/files/10-02ml.pdf.
can be found at
boarddocs/meetings/2008/20080714/ FED Meeting Date: April 27/28, 2010
draftfedreg.pdf. FOMC TWO DAY MEETING
Effective Date: April 1, 2010 Federal Reserve’s Federal Open Market Com-
CONNECTICUT– NMLS LICENSURE mittee two day meeting. The announcement of
REQUIRED the meeting results will become available on the
Federal Reserve website after 2:00 p.m. (EST) at
Connecticut Senate Bill S.B. 948 IS “an act con-
cerning implementation of the S.A.F.E. mortgage fomccalendars.htm.
licensing act, the emergency mortgage assis-
tance program, foreclosure procedures and tech- Effective Date: May 1, 2010
nical revisions to the banking statutes. Note: VA: GUIDANCE ON DISCLOSURE OF FEES
there are multiple dates contained in this legisla- AND CHARGES
tion. “No person shall engage in the business of
making residential mortgage loans or act as a The VA, in response to HUD’s new RESPA rules
mortgage broker in this state unless such person that took effect January 1, 2010, has issued cir-
has first obtained the required license for its main cular 26-10-01 providing guidance on fees and
office and each branch office where such busi- charges a veteran may pay when obtaining a VA-
ness is conducted … Effective April 1, 2010, any guaranteed home loan. The circular also an-
such person who is an individual shall also obtain nounces new documentation requirements for
a mortgage loan originator license prior to con- lenders and the elimination of a previously re-
ducting such business unless such individual quired disclosure statement. The Guidance may
does not engage directly in the activities of a be found at
mortgage loan originator.” More information can circulars/26_10_1.pdf.
be found at Effective Date: June 1, 2010
Effective Date: April 1, 2010
The Federal Trade Commission’s Red Flags
TEXAS– LICENSING Rule was promulgated under the Fair and Accu-
Texas House Bill H.B. 2779 is a bill related to rate Credit Transactions Act. The Act required
House Bill 10 and House Bill 2774 which imple- covered agencies to develop regulations requir-
ment the Safe and Fair Enforcement Mortgage ing ‘creditors’ and ‘financial institutions’ to ad-
Licensing Act. This bill establishes the regulatory dress the risk of identity theft. The resulting Red
framework for the licensing and regulation of Flags Rule requires all such entities that have
mortgage banker employees who originate resi- ‘covered accounts’ to develop and implement
dential mortgage loans. More information can be written identity theft prevention programs to help
obtained at identify, detect, and respond to patterns, prac-
B i l l L o o k u p / H i s t o r y . a s p x ? tices, or specific activities – known as ‘red flags’ –
LegSess=81R&Bill=HB2779. The other bills may that could indicate identity theft.” More informa-
be found at tion about the Red Flags Rule can be found at
B i l l L o o k u p / H i s t o r y . a s p x ? h t t p : / / w w w. f t c . g o v / b c p / e d u / m i c r o s i t e s /
LegSess=81R&Bill=HB10 and at http:// redflagsrule. Those interested in the exclusions from the program based on a revised definition of
LegSess=81R&Bill=HB2774. “creditor” may want to review H. R. 3763 which
“amends the Fair Credit Reporting Act to provide
for an exclusion from Red Flag Guidelines for
certain businesses” which is currently under con-
sideration by the Senate Banking Committee.
The bill can be found at http://
Page 12

Effective Date: June 1, 2010 Effective Date: July 1, 2010

Alabama Senate Bill S.B. 249 “establishes the
Alabama Secure and Fair Enforcement for Mort- California Senate Bill S.B. 36 requires mortgage
gage Licensing Act that requires the State Bank- loan originators to be licensed. This omnibus
ing Department to license and regulate mortgage licensing bill brings California law into compliance
loan originators and independent loan processors with the S.A.F.E. rules and regulations and pro-
and underwriters beginning on June 1, 2010 and vides for the participation in the Nationwide Mort-
loss mitigation specialists beginning on July 1, gage Licensing System and Registry. This bill
2011. In doing so, this bill imposes a $75 annual provides that persons doing business in the State
and renewal license fee on loan originators and of California are required to have a mortgage
independent loan processors and underwriters. loan originator license under the California Fi-
The licensure requirements would increase the nance Lenders Law or the California Residential
administrative and financial obligations as well as Mortgage Lending Act after July 1, 2010. This is
fee receipts to the Department by an undeter- an omnibus act containing many provisions.
mined amount that would be dependent upon the More information can be found at http://
number of licensees that come under the provi-
sions of this bill. In addition this bill requires all 0050/sb_36_bill_20091011_chaptered.pdf
mortgage loan originators licensed by the Depart- Effective Date: July 1, 2010
ment to register with the Nationwide Mortgage
Licensing System and Registry which will require CALIFORNIA – FOREIGN LANGUAGE DOCU-
the Department to participate in the registry at no MENT REQUIREMENTS
cost to the Department. This bill authorizes the
Department to impose civil penalties not to ex- California Assembly Bill S.B. 1160 would require
ceed $25,000 per violation. Mortgage loan origi- a supervised financial organization, as defined,
nators, examination, licensing, and regulation, which negotiates a contract or agreement for a
exemptions, fees, background checks, surety loan or extension of credit secured by residential
bonds, civil penalties, Secure and Fair Enforce- real property, to deliver, prior to the execution of
the contract or agreement, and no later than 3
ment for Mortgage Licensing Act or Alabama
business days after receiving the written applica-
S.A.F.E. Mortgage Licensing Act (2009-20312)”
tion, a specified form in that language (primarily
More information can be found at http://
in the languages of Spanish,
A C T I O N V i e w F r a m e . a s p ? Chinese, Tagalog, Vietnamese, or Korean) sum-
TYPE=Instrument&INST=SB249&DOCPATH=se marizing the terms of the contract or agreement,
archableinstruments/2009RS/Printfiles/ as specified. If you do business in a foreign lan-
&PHYDOCPATH=//alisondb/acas/ guage, you are cautioned to consult competent
searchableinstruments/2009RS/PrintFiles/ legal and compliance counsel. More information
&DOCNAMES=SB249-int.pdf,SB249- can be found at
eng.pdf,SB249-enr.pdf. -10/bill/asm/ab_1151-1200/
FED Meeting Date: June 22/23, 2010
Effective Date: July 1, 2010
Federal Reserve’s Federal Open Market Com- OTHER MATTERS
mittee two day meeting. The announcement of
the meeting results will become available on the Hawaii Senate Bill S.B. 1218 “allows the commis-
Federal Reserve website after 2:00 p.m. (EST) at sioner of financial institutions to regulate, license, examine, and enforce laws regulating mortgage
fomccalendars.htm. loan originators. Exempts mortgage loan origina-
tors from chapter 454, HRS, relating to mortgage
Effective Date: July 1, 2010 brokers and solicitors. While the law became
ARIZONA – LICENSURE, EXEMPTIONS AND effective July 16, 2009 with the legislature vetoing
OTHER MATTERS the Governor; the new mortgage loan originator
licensing provisions will become effective July 1,
Arizona House Bill H.B. 2143 is an act to amend 2010. More information can be found at http://
the Arizona codes to conform to federal law re-
quiring the licensing of mortgage originators and SB+73/$file/legis.html?open.
to establish the Mortgage Recovery Fund for
liabilities resulting loan originator wrongdoing. Effective Date: July 1, 2010
While the law became effective July 13, 2009; HAWAII – MORTGAGE SERVICERS ACT
the new mortgage loan originator licensing provi-
sions will become effective July 1, 2010. More Hawaii House Bill H.B. 1071 “provides for the
information can be found at licensing and regulation of mortgage servicers
legtext/49leg/1r/bills/hb2143s.pdf. that service residential mortgage loans secured
by real property located in the State of Hawaii.
(Continued on page 13)
Page 13

(Continued from page 12) measure also provides for the SCC, to the extent
Specifies prohibited practices for mortgage ser- practicable, to include in any written memoran-
vicers. More information can be obtained at http:// dum of understanding or other written agreement with the Registry provisions that address informa-
HB1071_CD1_.pdf. tion security, disclosure of pending or incom-
pletely adjudicated regulatory matters, licensing
Effective Date: July 1, 2010 tests limited to specific products and services,
MAINE – UNIFORM POWERS OF ATTORNEY reports on examination results, privilege or confi-
ACT dentiality of information, and review of the Regis-
try's proposed budget, fees, and audited financial
Maine Senate Paper S.P. 507 enacts the statements.” More information can be found at
Maine Uniform Power of Attorney Act to con-
form to the Uniform Power of Attorney Act 091+ful+CHAP0453.
drafted and approved by the National Confer-
ence of Commissioners on Uniform State Effective Date: July 1, 2010
Laws. More information may be obtained at (Previously Exempt) WASHINGTON – MORTGAGE BROKER
bills_124th/chappdfs/PUBLIC292.pdf. LICENSING
Deadline Licensing Date: July 1, 2010 Washington House Bill H.B. 1749 regulates busi-
VERMONT – LICENSING LENDERS/LOAN ness practices of mortgage brokers for compli-
OFFICERS ance with the secure and fair enforcement
(SAFE) for mortgage licensing act of 2008. The
Vermont House Bill H.171, an act relating to bill modifies licensing, education, and back-
home mortgage protection for Vermonters, imple- ground check standards for mortgage brokers
ments the requirements of the federal Secure and loan originators. Under the SAFE Act, all
and Fair Enforcement (S.A.F.E.) Act. states must have a system of licensing in place
“All individuals who, on or before December 31, for residential mortgage loan originators by Au-
2009, are employed by a mortgage broker hold- gust 1, 2009 that meets national definitions and
ing a valid Vermont license and who are author- minimum standards, including:
ized to act as a mortgage broker under such  criminal history and credit background
license, or are employed by a lender holding a checks;
valid Vermont license and are acting as a lender
or loan officer under such license, shall complete  pre-licensure education;
the pre-licensing education and testing require-  pre-licensure testing;
ments and shall obtain a mortgage loan origina-
tor license required by this act no later than July
 continuing education;
1, 2010. All other individuals must obtain a mort-  net worth, surety bond or recovery fund; and
gage loan originator license as required by this  licensing mortgage loan originators through
act prior to acting as a mortgage loan originator in a Nationwide Mortgage Licensing System
this state. More information can be found at http:// In order to facilitate an orderly transition to licens-
171.pdf. ing and minimize disruption in the mortgage mar-
ketplace, sections 4, 6 through 9, 11, 12, 14, and
Deadline Licensing Date: July 1, 2010 17 are effective January 1, 2010; mortgage loan
VIRGINIA – IMPLEMENTS SAFE LICENSING originators who were previously exempt as exclu-
ACT sive agents under RCW 6 19.146.020(1) (a) (ii)
must obtain a mortgage loan originator license
Virginia House Bill H.B. 2031/Senate Bill S.B. under this chapter before July 1, 2010. More
1171 “prohibits an individual from acting as, or information can be found at http://
holding himself out to the public as being, a mort-
gage loan originator on or after July 1, 2010, Pdf/Bills/House%20Passed%20Legislature/1749
unless he has obtained a license from the State -S.PL.pdf.
Corporation Commission (SCC). The measure
implements requirements of the federal Secure Deadline Licensing Date: July 1, 2010
and Fair Enforcement for Mortgage Licensing Act WYOMING – MORTGAGE ORIGINATOR
of 2008, which allows states to retain regulatory LICENSING
authority over mortgage loan originators if they
enact legislation that provides for the licensing Wyoming House Bill H.B. 169 is “AN ACT relat-
and registration of such persons through the Na- ing to mortgage loan originators; modifying the
tionwide Mortgage Licensing System and Regis- Wyoming Residential Mortgage Practices Act;
try. The measure establishes licensing proce- modifying the Uniform Consumer Credit Code;
dures and criteria, including requirements for amending and providing new definitions; provid-
bonding, background checks, education, testing, ing exceptions for licenses; providing for surety
continuing education, investigations, examina- bonds; providing for confidentiality; providing
tions, reporting, payment of annual fees, license coordination with and disclaimer to a national
suspension and revocation, and fines. The registry system; providing for enforcement; re-
(Continued on page 14)
Page 14

(Continued from page 13) nical revisions to the banking statutes. Note:
quiring reports; providing for loan origination li- there are multiple dates contained in this legisla-
censing and registration; authorizing rulemaking; tion. “Effective July 31, 2010, a loan processor or
providing for processing applications; providing underwriter who is an independent contractor
for pre-licensing education; providing for continu- may not engage in the activities of a loan proces-
ing education; requiring testing; providing for sor or underwriter unless such independent con-
license renewal; requiring fees; making conform- tractor loan processor or underwriter obtains and
ing amendments; repealing a license exemption; maintains a license as a mortgage loan originator
and providing for an effective date.” “These under section 36a-489, as amended by this act.
changes to the Wyoming Residential Mortgage Each independent contractor loan processor or
Practices Act and the Uniform Consumer Credit underwriter licensed as a mortgage loan origina-
Code are necessary to comply with new federal tor shall have and maintain a valid unique identi-
requirements enacted in 2008.” More information fier issued by the system. More information can
can be found at be found at
Engross/HB0169.pdf. pdf/2009PA-00209-R00SB-00948-PA.pdf.
Effective Date: July 31, 2010 Effective Date: July 31, 2010
(Note Exemption)
Delaware House Bill S.B. 73 is an act to amend
HUD has set July 31st as the deadline for all loan title 5 of the Delaware code to implement the
originators to be licensed in their respective United Sates Secure and Fair Enforcement for
states under a system that is SAFE-Act compli- mortgage licensing act of 2008 (U.S. Public Law
ant. The only exemption involves originators who 110-289). While the law became effective July 6,
possess a valid license that was granted under 2009; the new mortgage loan originator licensing
another system that was in-place prior to a SAFE provisions will become effective July 31, 2010.
Act-compliant system; these people must be More information can be found at
licensed under a SAFE Act-compliant system by
December 31st, 2010. Guidance on HUD require-
ments involving the SAFE Act Licensing program vwLegislation/SB+73/$file/legis.html?open.
can be found at
sfh/mps/smlicact.cfm. Effective Date: July 31, 2010
Deadline Licensing Date: July 31, 2010
Illinois House Bill H.B. 4011 amends the Resi-
dential Mortgage License Act of 1987 to comply
Colorado House Bill H.B., 1085 concerns “the with the Nationwide Mortgage Licensing System
regulation of mortgage loan originators, and, in and Registry; provides for requirements, educa-
connection therewith, modifying the ‘Mortgage tion, penalties and other matters pertaining to
Broker Licensing Act’ to conform to the federal licensing as a mortgage originator. Some licens-
"Secure and Fair Enforcement (S.A.F.E.) for ing provisions take effect on January 1, 2011.
mortgage licensing act of 2008,” exempting cer- More information can be found at http://
tain financial institutions from the list of prohibited
practices under the act, and making an appro- 0112.pdf.
Effective Date: July 31, 2010
“On or after July 31, 2010, unless licensed by the
director and registered with the nationwide mort- LOUISIANA – LICENSURE AND OTHER
gage licensing system and registry as a state- MATTERS
licensed loan originator, an individual shall not Louisiana House Bill H.B. 810 enacts the licens-
originate or offer to originate a mortgage or act or ing provisions to conform to federal guidelines
offer to act as a mortgage loan originator.” More and to prohibit certain acts relating to mortgage
information can be found at http:// loans. No person shall engage in any residential mortgage lending activity in this state unless such
fsbillcont2/8538d858778cab9f87257537001d21d9? person has first obtained a license which shall be
OpenDocument&Click=87257426007F3773.89755 maintained annually and be accompanied by a
51e51fa01d087256dd30080e1d5/$Body/0.2F64. unique identifier that shall be used in accordance
Effective Date: July 31, 2010 with the prevailing rules. The provisions of the
law shall not apply to a person whose residential
CONNECTICUT– NMLS LICENSURE mortgage lending activities were not subject to
REQUIRED: INDEPENDENT CONTRACTORS the licensing requirements on July 30, 2009, or a
Connecticut Senate Bill S.B. 948 IS “an act con- person engaged in residential mortgage lending
cerning implementation of the S.A.F.E. mortgage activities that was exempt from licensure on July
licensing act, the emergency mortgage assis- 30, 2009. While the law became effective July
tance program, foreclosure procedures and tech- 31, 2009; the new mortgage loan originator li-
(Continued on page 15)
Page 15

(Continued from page 14) concerning the interpretation of the SAFE act and
censing provisions will become effective July 31, its applicability to loan modification activities.
2010. More information can be found at http:// More information can be found at http://
streamdocument.asp?did=668805. publicact/pdf/2009-PA-0075.pdf.
Effective Date: July 31, 2010 Effective Date: July 31, 2010
Maine Senate Bill S.P. 523 (LD 1439) is “an Act Michigan Senate Bill S.B. 463 would amend the
to Conform State Mortgage Laws with Federal Mortgage Brokers, Lenders, and Servicers Li-
Laws.” The act was passed as an emergency censing Act (MBLSLA) to require a loan officer to
measure to insure compliance with federal dead- be registered under the proposed Mortgage Loan
lines. More information can be found at http:// Originator Licensing Act, rather than under the MBLSLA as currently required. More information
billpdfs/SP052301.pdf. can be found at
Effective Date: July 31, 2010 0076.pdf.
MASSACHUSETTS – MORTGAGE Effective Date: July 31, 2010
Massachusetts Senate Bill S.B. 452 is an act
adopting the federal Secure and Fair Enforce- Michigan Senate Bill S.B. 464 would amend the
ment for Mortgage Licensing Act of 2008. For all Secondary Mortgage Loan Act to require a sec-
individuals other than individuals described in ondary mortgage loan officer to be registered
subsection (b) shall be July 31, 2010, or such under the proposed Act, rather than under the
later date approved by the Secretary of the U.S. Secondary Mortgage Loan Act as currently re-
Department of Housing and Urban Development. quired. More information can be found at http://
For all individuals licensed as mortgage loan
originators as of the enactment of this chapter publicact/pdf/2009-PA-0077.pdf.
shall be January 1, 2011. More information can
be found at Effective Date: July 31, 2010
senate/186/st00pdf/st00452.pdf. MICHIGAN – LICENSING
Effective Date: July 31, 2010 Michigan Senate Bill S.B. 465 would amend the
MICHIGAN – MORTGAGE ORIGINATOR Consumer Financial Services Act to prohibit a
LICENSING licensee acting as a mortgage broker or mort-
gage lender from employing or engaging an indi-
Michigan Senate Bill S.B. 462 is an act to provide vidual as a loan officer to originate mortgage
for the licensing of mortgage loan originators; to loans unless he or she were a licensed loan offi-
regulate the business practices of mortgage loan cer under the proposed Act. More information
originators; to establish certain obligations of can be found at
employees and principals of mortgage loan origi- documents/2009-2010/publicact/pdf/2009-PA-
nators; to prescribe the powers and duties of 0078.pdf.
certain state agencies and officials; and to pro-
vide remedies and prescribe penalties. An indi- Effective Date: July 31, 2010
vidual shall not engage in the business of a mort- MISSOURI – LOAN ORIGINATOR LICENSING
gage loan originator with respect to any dwelling
located in this state without first obtaining and Missouri House Bill H.B. 382 “repeals the Resi-
maintaining annually a license under this act. dential Mortgage Brokers License Act and estab-
Each licensed mortgage loan originator must lishes in its place the Missouri Secure and Fair
register with and maintain a valid unique identifier Enforcement for Mortgage Licensing and Resi-
issued by the nationwide mortgage licensing dential Mortgage Brokers Licensing Act.
system and registry. An individual engaged in the “Requires, beginning July 31, 2010, or the later
business of a mortgage loan originator is not date approved by the Secretary of the United
required to obtain and maintain a license under States Department of Housing and Urban Devel-
this act until July 31, 2011 if that individual is em- opment, an individual engaging in the business of
ployed exclusively by a mortgage servicer; if that a mortgage loan originator to be licensed, em-
individual is authorized to perform loan modifica- ployed, and acting under the supervision of a
tion activities concerning existing residential mort- single, Missouri-licensed residential mortgage
gage loans, and not to originate new residential broker, with the exception of certain specified
mortgage loans or perform any other activities of individuals. Each licensed mortgage loan origi-
a mortgage loan originator, on behalf of that nator must register with and maintain a valid
mortgage servicer; and if this extension of time is unique identifier issued by the Nationwide Mort-
not inconsistent with any guideline, rule, regula- gage Licensing System and Registry (NMLSR).
tion, or interpretative letter of the United States The unique identifier must be clearly shown on all
department of housing and urban development
(Continued on page 16)
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(Continued from page 15) Deadline Licensing Date: July 31, 2010
residential mortgage loan application forms, so-
licitations, or advertisements, including business OKLAHOMA – MORTGAGE LICENSING
cards, web sites, and any other documents as Oklahoma Senate Bill S.B. 1062 creates the
required by the Director of the Division of Oklahoma Secure and Fair Enforcement (SAFE)
Finance within the Department of Insurance, for Mortgage Licensing Act to insure confor-
Financial Institutions and Professional Registra- mance with federal law. “The effective date for
tion. Other details relating to licensing are in- licensing all entities and individuals, including
cluded; including surety bonds and penalties for those currently licensed as mortgage brokers or
civil violations of the Act. More information can be mortgage loan originators, shall be July 31, 2010
found at More information can be found at http://
bills091/biltxt/truly/HB0382T.HTM with an easier-
to-read summary located at SB1062_ENGR.RTF.
sHB382T.htm. Effective Date: July 31, 2010
Effective Date: July 31, 2010 OREGON – MORTGAGE ORIGINATOR
ORIGINATOR LICENSING Oregon House Bill H.B. 2189 prohibits individ-
ual from engaging in business as mortgage
New Hampshire House Bill H.B. 610 provides loan originator without obtaining license from
consumer protection from certain practices of Director of Department of Consumer and Busi-
mortgage bankers, mortgage brokers, and mort- ness Services and obtaining unique identifier
gage loan originators and implements the from Nationwide Mortgage Licensing System
S.A.F.E. mortgage licensing act. Mortgage Origi- and Registry. More information can be found at
nators must be licensed by July 31, 2010. More
information can be found at http:// hb2100.dir/hb2189.en.pdf.
FED Meeting Date: August 10, 2010
Effective Date: July 31, 2010
Federal Reserve’s Federal Open Market Com-
AND OTHER MATTERS mittee two day meeting. The announcement of
New York Assembly Bill A.B. 6924 is an act to the meeting results will become available on the
amend the banking law, in relation to conforming Federal Reserve website after 2:00 p.m. (EST) at
the regulation of mortgage loan originators in
New York Law to the federal law; and to repeal fomccalendars.htm.
article 12-E of such law relating thereto. While the
FED Meeting Date: September 21, 2010
law became effective July 11, 2009; the new
mortgage loan originator licensing provisions will FOMC ONE DAY MEETING
become effective July 31, 2010. More information
can be found at Federal Reserve’s Federal Open Market Com-
bn=A06924&sh=t. mittee two day meeting. The announcement of
the meeting results will become available on the
Effective Date: July 31, 2010 Federal Reserve website after 2:00 p.m. (EST) at
Effective Date: October 1, 2010
North Carolina House Bill H.B. 1523 an act to
rewrite the North Carolina Mortgage Lending Act FEDERAL RESERVE – REGULATION-Z
in order to conform to the requirements of federal PROVISIONS
law. The licensing requirements are effective July
31, 2010 for “exclusive mortgage brokers” and by The provisions of Regulation-Z which require a
December 31, 2009 for “limited loan officers.” subprime lender to implement escrow accounts
According to the definitions, "Exclusive mortgage for the first twelve months of a loan for manufac-
broker" means an individual who acts as a mort- tured housing are now in effect. Review this
gage broker exclusively for a single mortgage legislation carefully as the consequences of vio-
lender or mortgage broker licensee or a single lating these rules can be prohibitively expensive.
exempt mortgage lender and who is licensed The highlights of the final rule can be found at
pursuant to G.S. 53-244.050(b)(3). More informa-
tion can be found at press/bcreg/E1515A7162514E5EAD0C295B0
Sessions/2009/Bills/House/PDF/H1523v6.pdf. 38E101F.htm and the 419-page Draft Federal
Register Notice can be found at http://
Page 17

Effective Date: October 1, 2010 tor’s license under a SAFE Act-compliant system
due to an existing mortgage originator’s license
issued under a non-SAFE Act-compliant system
(OMNIBUS BILL) to be licensed in their respective states under a
Florida Senate Bill S.B. 2226 “Authorizes the system that is SAFE-ACT compliant. Guidance
Financial Services Commission to adopt rules on HUD requirements involving the SAFE Act
relating to compliance with the S.A.F.E. Mortgage Licensing program can be found at http://
Licensing Act of 2008. Provides exemptions from
part I, II, and III of ch. 494, F.S., relating to the
Effective Date: January 1, 2011
licensing and regulation of loan originators, mort-
gage brokers, and mortgage lenders. Exempts FED/FTC – RISK-BASED PRICING NOTICE
certain attorneys from the definition of AND FREE CREDIT REPORT
‘foreclosure-rescue consultant,’ etc. This is an
omnibus bill which contains multiple provisions “The Federal Reserve Board and the Federal
and multiple effective dates. More information Trade Commission final rules generally require a
can be found at creditor to provide a consumer with a notice
Sections/Documents/loaddoc.aspx? when, based on the consumer's credit report, the
FileName=_s2226er.DOCX&DocumentType= creditor provides credit to the consumer on less
Bill&BillNumber=2226&Session=2009. favorable terms than it provides to other consum-
ers. Consumers who receive this ‘risk-based
FED Meeting Date: November 2/3, 2010 pricing’ notice will be able to obtain a free credit
report to check the accuracy of the report.
Risk-based pricing refers to the practice of setting
Federal Reserve’s Federal Open Market Com- or adjusting the price and other terms of credit
mittee two day meeting. The announcement of provided to a particular consumer based on the
the meeting results will become available on the consumer's creditworthiness. The final rules pro-
Federal Reserve website after 2:00 p.m. (EST) at vide creditors with several methods for determin- ing which consumers must receive risk-based
fomccalendars.htm. pricing notices.
Effective Date: December 1, 2010 As an alternative to providing risk-based pricing
CALIFORNIA – MORTGAGE ORIGINATOR notices, the final rules permit creditors to provide
LICENSING consumers who apply for credit with a free credit
score and information about their score. The final
California Senate Bill S.B. 36 requires mortgage rules implement section 311 of the Fair and Ac-
loan originators to be licensed. This omnibus curate Credit Transactions Act of 2003, which
licensing bill brings California law into compliance amends the Fair Credit Reporting Act. More infor-
with the S.A.F.E. rules and regulations and pro- mation can be found at http://
vides for the participation in the Nationwide Mort-
gage Licensing System and Registry. This bill bcreg/bcreg20091222b1.pdf.
provides that certain persons doing business in
the State of California are required to have a Effective Date: January 1, 2011
mortgage loan originator license endorsement REGULATORS – GLBA MODEL PRIVACY
under the Real Estate Law, as set forth in the
bill, after December 1, 2010.This is an omnibus
act containing many provisions. More information The Regulatory Agencies (Fed, CFTC, FDIC,
can be found at FTC, NCUA, OCC, OTS, and SEC) have
pub/09-10/bill/sen/sb_0001-0050/ adopted a final model privacy notice to comply
sb_36_bill_20091011_chaptered.pdf with the provisions of the GLBA (Gramm-Leach-
Bliley Act). Agencies are adopting a model pri-
FED Meeting Date: December 14, 2010 vacy form that financial institutions may rely on as
FOMC ONE DAY MEETING a safe harbor to provide disclosures under the
privacy rules. In addition, the Agencies other than
Federal Reserve’s Federal Open Market Com- the SEC are eliminating the safe harbor permit-
mittee two day meeting. The announcement of ted for notices based on the Sample Clauses
the meeting results will become available on the currently contained in the privacy rules if the no-
Federal Reserve website after 2:00 p.m. (EST) at tice is provided after December 31, 2010. Simi- larly, the SEC is eliminating the guidance associ-
fomccalendars.htm. ated with the use of notices based on the Sample
Effective Date: December 31, 2010 Clauses in its privacy rule if the notice is provided
after December 31, 2010. The proposed rule can
SAFE MORTGAGE LICENSING ACT privacyinitiatives/PrivacyModelForm_Rule.pdf.
(For those Previously Exempt) The model form can be found at
HUD has set December July 31, 2010 as the and the “No Opt-Out” version can be found at
deadline for all loan originators who may have h t t p : / / f t c . g o v / pr i v a c y/ pr i v a c yi n i t i a t iv e s /
been exempt from obtaining a mortgage origina-
(Continued on page 18)
Page 18

(Continued from page 17) bills_text.cfm?billdoc=SB532 SUB2

PrivacyModelForm.pdf. Note: Additional provi- enr.htm&yr=2009&sesstype=RS&i=532.
sions become effective on January 1, 2012.
FED Meeting Date: January 25/26, 2011
Effective Date: January 1, 2011
LICENSING Federal Reserve’s Federal Open Market Com-
mittee two day meeting. The announcement of
Illinois House Bill H.B. 4011 amends the Resi- the meeting results will become available on the
dential Mortgage License Act of 1987 to comply Federal Reserve website after 2:00 p.m. (EST) at
with the Nationwide Mortgage Licensing System
and Registry; provides for requirements, educa- fomccalendars.htm.
tion, penalties and other matters pertaining to
licensing as a mortgage originator. Some licens- Effective Date: July 31, 2011
ing provisions take effect on January 1, 2011. MICHIGAN – MORTGAGE ORIGINATOR
More information can be found at http:// LICENSING – PREVIOUSLY EXEMPT PERSONS
Michigan Senate Bill S.B. 462 is an act to provide
Effective Date: January 1, 2011 for the licensing of mortgage loan originators; to
MASSACHUSETTS – MORTGAGE regulate the business practices of mortgage loan
ORIGINATOR LICENSING originators; to establish certain obligations of
employees and principals of mortgage loan origi-
Massachusetts Senate Bill S.B. 452 is an act nators; to prescribe the powers and duties of
adopting the federal Secure and Fair Enforce- certain state agencies and officials; and to pro-
ment for Mortgage Licensing Act of 2008. For all vide remedies and prescribe penalties. An indi-
individuals other than individuals described in vidual engaged in the business of a mortgage
subsection (b) shall be July 31, 2010, or such loan originator is not required to obtain and main-
later date approved by the Secretary of the U.S. tain a license under this act until July 31, 2011 if
Department of Housing and Urban Development. that individual is employed exclusively by a mort-
For all individuals licensed as mortgage loan gage servicer; if that individual is authorized to
originators as of the enactment of this chapter perform loan modification activities concerning
shall be January 1, 2011. More information can existing residential mortgage loans, and not to
be found at originate new residential mortgage loans or per-
senate/186/st00pdf/st00452.pdf. form any other activities of a mortgage loan origi-
nator, on behalf of that mortgage servicer; and if
Effective Date: January 1, 2011 this extension of time is not inconsistent with any
NEVADA – EDUCATIONAL REQUIREMENTS guideline, rule, regulation, or interpretative letter
FOR ESCROW AGENTS AND AGENCIES of the United States department of housing and
urban development concerning the interpretation
Section 3 of Nevada Assembly Bill A.B.513 which of the SAFE act and its applicability to loan modi-
establishes education requirements for an es- fication activities. More information can be found
crow agent or agency is now effective. More at
information can be found at http:// 2010/publicact/pdf/2009-PA-0075.pdf.
AB513_EN.pdf. Effective Date: July 31, 2011
Effective Date: January 1, 2011 (Licensed SOUTH CAROLINA – OMNIBUS LICENSING
LICENSING South Carolina Senate Bill S. 673 is “an act to
amend the code of laws of South Carolina, 1976,
West Virginia Senate Bill S.B. 532 implements so as to enact the ‘South Carolina Mortgage
regulations necessary for compliance with the Lending Act. “The definition of loan originator
secure and fair enforcement (SAFE) for mort- does not apply to an individual servicing a
gage licensing act of 2008. Modifies licensing, mortgage loan as that term is defined in this
educations, and background check standards for chapter until July 31, 2011, unless the United
consumer loan companies and mortgage loan States Department of Housing and Urban Devel-
originators. Warning: there are multiple effec- opment or a court of competent jurisdiction deter-
tive dates contained within this legislation. mines before that time that those individuals ser-
Please check the effective dates carefully. For vicing mortgage loans are ‘loan originators’ as
all licensed mortgaged originators who were li- that term is defined in the SAFE Act pursuant to
censed before July 1, 2009, the bill’s provisions Section 1508 of Title V of The Housing and Eco-
are effective on January 1, 2011. For all others, nomic Recovery Act of 2008, Public law 110‑-
including new registrants for licensing, the bill’s 289.More information can be obtained at http://
provisions are effective on January 31, 2010,
More information can be found at http:// bills/673.docx.
Page 19

Effective Date: January 1, 2012 are a risk to the mortgage industry because
they essentially allow consumers to buy prop-
REGULATORY AGENCIES – MODEL PRIVACY erties with little skin in the game? Even the IRS
FORMS has refereed to seller-funded downpayment
The Regulatory Agencies (Fed, OCC, FDIC, programs as scams.
OTS, NCUA, FTC, CFTC, and SEC) have pub- Now we find Maxine Waters (D-CA), the Rep-
lished their final amendments to their rules that resentative who thought that Fannie Mae and
implement the privacy provisions of Subtitle A of Freddie Mac were well-capitalized, soundly
Title V of the Gramm-Leach-Bliley Act (``GLB managed and resisted all attempts at reform,
Act''). These rules require financial institutions to along with Representatives Al Green (D-TX)
provide initial and annual privacy notices to their and Gary Miller (R-CA) are introducing H.R.
customers. Pursuant to Section 728 of the Finan- 600 to legislatively mandate the use of “seller
cial Services Regulatory Relief Act of 2006, the funded downpayment assistance.” Studies
Agencies are adopting a model privacy form that from the HUD’s Office of the Inspector General
financial institutions may rely on as a safe harbor and the Government Accountability Office
to provide disclosures under the privacy rules. In have strongly suggested that this practice be
addition, the Agencies other than the SEC are eliminated. Just another example of the gov-
eliminating the safe harbor permitted for notices ernment meddling in the housing market on
based on the Sample Clauses currently con- behalf of certain special interests – and then
tained in the privacy rules if the notice is provided disclaiming all responsibility when there is a
after December 31, 2010. Similarly, the SEC is meltdown in the mortgage marketplace. For
eliminating the guidance associated with the use those wishing to read a copy H.R. 600, it can
of notices based on the Sample Clauses in its be found at
privacy rule if the notice is provided after Decem- bin/getdoc.cgi?dbname=111_cong_bills&docid=f:
ber 31, 2010. The rule is effective on December h600ih.txt.pdf.
31, 2009, except for the following amendments,
which are effective January 1, 2012: Instructions FORMER FED CHAIRMAN PAUL VOLKER
3B, 10B, 17B, 24B, 31B, 38B, 45B, and 52B re- RE-SURFACES WITH “VOLKER RULE”
moving paragraphs (g) to 12 CFR 40.6, 216.6,
332.6, 573.6, and 716.6, 16 CFR 313.6, and 17 Former Fed Chairman Paul Volker likes the idea
CFR 160.6 and 248.6, respectively; and Instruc- of re-instituting a version of the Glass-Steagall
tions 7B, 14B, 21B, 28B, 35B, 42B, 49B, and 55B act which prohibited a bank holding company
removing Appendixes B to 12 CFR parts 40, 216, from owning other financial companies and which
332, 573, and 716, 16 CFR part 313, and 17 was repealed in 1999 by the Gramm–Leach–
CFR parts 160 and 248, respectively. More infor- Bliley Act. According to the Obama White House,
mation may be found at h t t p : / / the Volker proposal would work with Congress and regulatory agencies to ensure that no bank
PDFgate.cgi?WAISdocID=931171186187+2+2 or financial institution that contains a bank will
own, invest in or sponsor a hedge fund or a pri-
+0&WAISaction=retrieve vate equity fund, or proprietary trading operations
unrelated to serving customers for its own profit.
Effective Date: January 1, 2014 And to limit the consolidation of our financial sec-
FDIC – DEPOSIT INSURANCE RETURNS TO tor, the Volker Plan would attempt to place
$100,000 broader limits on the excessive growth of the
market share of liabilities at the largest financial
The FDIC has issued Financial Institution Letter firms, to supplement existing caps on the market
FIL-22-2009 which extends the temporary in- share of deposits. The White House statement
crease in the standard maximum deposit insur- can be found at
ance amount (SMDIA) to $250,000 per depositor press-office/president-obama-calls-new-
through December 31, 2013. The SMDIA will restrictions-size-and-scope-financial-institutions-
return to its former limit of $100,000 per depositor rein-e.
unless this provision is renewed. FIL-22-2009
financial/2009/fil09022.html. Mortgage originators and others in the financial
industry who use pre-programmed telephone
OTHER NEWS dialers might be facing stricter rules relating to so-
called “robocalls.” “The FCC has proposed revi-
sions to its rules under the Telephone Consumer
WILL THEY NEVER LEARN? Protection Act (TCPA) to further empower resi-
The liberals, fond of pursuing their core con- dential telephone subscribers to avoid unwanted
stituency by implementing programs for the telephone solicitations. The proposals would
poor and disadvantaged are, once again, at- require sellers and telemarketers to obtain written
tempting to promote legislative programs consent from recipients before making prere-
which encourage unsound lending practices. corded telemarketing calls, commonly referred to
How many times has the FHA and others told as “robocalls,” even when the caller has an es-
Congress that downpayment assistance pro- tablished business relationship with the con-
grams, aka “laundered downpayment funds,” sumer.
(Continued on page 20)
Page 20

(Continued from page 19) remember a password, it is far easier to ask for a
According to the FCC, key revisions to existing reset than deal with the identity theft that comes
rules would include: with trying all of your other passwords on a single
 Requiring sellers and telemarketers to obtain
telephone subscribers’ express written con- FTC HITS MORTGAGE COMPANY WITH
sent (including electronic methods of con- PENALTY FOR IMPROPERLY DISCARDING
sent) to receive prerecorded telemarketing DOCUMENTS
calls, even when there exists an established “A mortgage broker who discarded consumers’
business relationship between the caller and personal financial records in a publicly-accessible
the consumer; dumpster paid a $35,000 civil penalty to settle
 Requiring that prerecorded telemarketing Federal Trade Commission charges. According
calls include an automated, interactive to an FTC complaint filed in December 2008, the
mechanism by which a consumer may “opt defendant improperly disposed of about 40 boxes
out” of receiving future prerecorded mes- of sensitive consumer records collected by com-
sages from a seller or telemarketer; and, panies he had owned, including tax returns, mort-
gage applications, bank statements, photocopies
 Exempting certain federally regulated health- of credit cards and drivers’ licenses, and at least
care-related calls from the general prohibi- 230 credit reports. In addition, two mortgage bro-
tion on prerecorded telemarketing calls to kerage companies he previously owned failed to
residential telephone lines. (These calls are provide reasonable and appropriate security for
currently not specifically exempted from the sensitive consumer information, despite promis-
prerecorded message rules.) ing they would do so.” It is amazing that the fine
is so small when measured against the amount
More information on this proposed rulemaking of information discarded. More information on the
can be found at FTC charges and settlement can be found at
The page contains links to several informative
PRIVACY & SECURITY FTC publications on protecting non-public per-
sonal information.
Internet security experts may be divided on which
browser is more secure, offers a better browsing My dry cleaner recently showed me a report in
experience, is extensible to include new applica- his trade magazine that indicates more and more
tions or is more robust – but they all agree on USB thumb-drives are being left in the pockets of
one thing: get rid of older browsers, especially pants and jackets than ever before. Since most
those which have not been updated with the lat- of the data on these thumb-drives is likely to be
est security patches. For those operating with unencrypted, there is a clear and present danger
anything less than Microsoft’s Internet Explorer for a company to expose “non-public personal
Version 8, bite the bullet and download IE8. The data” to the public and thus be sanctioned by
inconvenience of relatively infrequent problems state and federal authorities for a database infor-
cannot be compared with a compromised com- mation breach. It is important to know exactly
puter and corrupted data resulting from a vulner- what is being stored on a thumb drive and what
able browser. And it’s not only the browser itself “non-public personal information” may be con-
that is at risk. Be sure that your other add-ins, tained within the files. This is especially important
such as Adobe’s Flash are either updated or for those associated with the mortgage industry
disabled. and who may be carrying loan files containing
social security numbers, credit card account in-
PASSWORD SURVEY PROVES SECURITY formation and all the key elements needed for
MAY NOT SURVIVE LAZINESS AND STUPIDITY first-class identity theft. Forewarned is forearmed.
In a very large sampling of passwords used on
popular systems, “123456” ranked number one; TECHNOLOGY
followed by: “12345,” 123456789,” “password,”
“iloveyou,” “princess” and others of a similar na-
ture. Should you be among the users that pay ARE YOUR PROPRIETARY SECRETS “OPEN
homage to your loved ones, celebrities or use SOURCE”
easily-remembered passwords like telephone As more and more companies turn to open
numbers, home addresses, why not resolve to source to curtail costs, very few companies un-
add another easy-to-remember element that derstand the underlying risks in using software
consists of special characters and alternate up- licensed under so-called “public” licensing agree-
per and lower case alphanumeric characters. ments. Even though there appears to be no initial
You can change this number frequently and still software costs, there are hidden dangers. Imag-
maintain some level of control over your pass- ine a company that has extensively used open
word collection. Remember, separate passwords source software as the basis for their proprietary
for all of your activities. And should you fail to (Continued on page 21)
Page 21

(Continued from page 20)  Microsoft Security Advisory (979267) -- Vul-

mortgage system. If this software was obtained nerabilities in Adobe Flash Player 6 Pro-
under the GNU General Public License, all of the vided in Windows XP Could Allow Remote
companies programs derived from or combined Code Execution (Published or Last Updated:
with this code must be offered freely to any third- 1/12/2010)
party under the terms of the licensing agreement. technet/security/advisory/979267.mspx.
The right to examine such software, copy it, dis-
tribute it or derive additional works from it may be Adobe
possible. Not only does this severely impact the
proprietary nature of a company’s offerings; but  APSB10-02 -- Security updates available for
should they wish to sell the company, its valuation Adobe Reader and Acrobat (1/15/2010)
may be substantially lower than anticipated. Of
course, if you are using unmodified “vanilla” soft- bulletins/apsb10-02.html.
ware to support your proprietary programs, they WINDOWS 7 SERVICE PACK 1 OUT BY
appear to be protectable. You may wish to consult OCTOBER, NOVEMBER?
qualified legal counsel with a specialty in protect-
ing intellectual property rights for more informa- There is no doubt that there is an ongoing Micro-
tion. soft project to compile the next service pack for
Windows 7. Some cynics believe that this release
WARNING: ONLINE BACKUP SERVICES will be forthcoming sooner than later, not for any
The advertisements are seductive … do nothing pressing technical issue discovered to date, but
and your files are securely backed-up offsite; en- to encourage the adoption of Windows 7 by
crypted and safe. But compelling as it may seem, those organizations who traditionally wait for the
there are a few caveats. One, if you have large release of the first service pack before adopting
files or a large number of smaller files, you may new operating systems. Of course there is no
find that it will take a long time to fully backup your guarantee that a service pack will not break exist-
files. Most systems use only a portion of your ing applications. The only answer is to test the
computer’s power and Internet bandwidth to per- service pack on non-mission-critical machines
form its magic. The smaller the payload to be first.
backed up and the faster the computer and Inter- iPAD LAUNCHES AND FIZZLES AS A
net connection, the quicker the backup will take to POTENTIAL BUSINESS TOOL?
finish. It may take days to back-up a large disk –
even longer if you use your computer sporadically Bigger than an iPhone, less powerful than a lap-
and do not leave the machine connected 24/7. top or notebook, not available immediately, pric-
Because of the method in which files are backed ing based on storage capabilities, questions
up, your most important files may be awaiting about battery capacity and screen deficiencies in
backup at the time of system trouble – something bright daylight are all raising significant questions
that you didn’t bargain for. If you generate a large about the useability and desirability of the iPad as
number of small files – such as common in the a serious development platform for consumer
mortgage industry – you may find that the backup applications. Truth-be-told, there are relatively
works perfectly or, possibly, not at all. The bottom few iPhone apps that are consistently used over
line is caveat emptor: let the buyer beware. Or as time. Will iPad apps face the same fate?
the Better Business Bureau suggests: Some of the complaints about a relatively pricey
“Investigate Before You Invest.” iPad that were rocketing around the Internet in-
ARE YOU FULLY PATCHED? clude: lack of a physical keyboard, physical size
and storage issues; uses a phone operating sys-
Once again the computer hardware and software tem rather than a more robust version suited for a
vendors are reminding you that evildoers are hard netbook; storage is relatively limited to 64 GB
at work to compromise your computer and har- max with no practical opportunity to increase the
vest your data. Some recent items: storage; no HDMI video output or built-in camera
or microphone; no built-in USB ports to extend
connectivity to other devices; no flash memory
 Microsoft Security Advisory (979682) -- Vul- card capability; lock-ins to Apple connectors,
nerability in Windows Kernel Could Allow features and authorized stores; and worst of all,
Elevation of Privilege (Published or Last Up- no opportunity to change a battery – even though
dated: 1/22/2010) you are expected to have a 10-hour battery life
technet/security/advisory/979682.mspx. before recharge. Some people note that you
cannot run Skype to make phone calls – perhaps
 Microsoft Security Advisory (979352) -- Vul- a deliberate competitive move – to lock you into
nerability in Internet Explorer Could Allow an Apple-designated network.
Remote Code Execution (Published or Last
Updated: 1/21/2010) http:// Unless you are a status seeker needing that “must have” accessory or ego-boosting accouter-
advisory/979352.mspx. ment, it appears that the iPad may be another
“ho hum” product; or a product waiting for that
killer app. Those wanting to satisfy their curiosity
(Continued on page 22)
Page 22

(Continued from page 21) cent increase. For the 12 months ending in
can find a great description of the iPad at http:// November, U.S. house prices rose 0.5 per- cent. The U.S. index is 10.3 percent below
tag=nl.e539. its April 2007 peak. The FHFA monthly in-
dex is calculated using purchase prices of
INTERESTING houses backing mortgages that have been
sold to or guaranteed by Fannie Mae or
PUBLICATIONS Freddie Mac. For the nine Census Divisions,
seasonally adjusted monthly price changes
SIGTARP: Special Inspector General for the from October to November ranged from –0.4
Troubled Asset Relief Program percent in the East South Central Division to
+ 2.3 percent in the Pacific Division.” More
 Quarterly Report to Congress (January information can be found at http://
30, 2010) … “This report highlights the activi-
ties associated with the Congressional Bail- 20HPI%201%2026%2010.pdf.
out known as TARP, the Troubled Asset
Relief Program. The program was designed  Mortgage Interest Rates… “The average
to allow the government to purchase troubled interest rate on conventional 30-year, fixed-
assets in order to prevent the collapse of our rate, mortgage loans of $417,000 or less
financial institutions. Unfortunately Congress, decreased 4 basis points to 5.05 percent in
in an attempt to politicize the matter and as- December. The average interest rate on 15-
suage the public’s hard feelings about finan- year, fixed-rate loans of $417,000 or less
cial institutions giving large bonuses to ex- decreased 9 basis points to 4.54 percent in
ecutives and other key employees, linked December. These rates are calculated from
executive compensation with the receipt of the FHFA’s Monthly Interest Rate Survey
TARP funds by an institution. This did not sit (MIRS) of purchase-money mortgages.
well with the major institutions and they, by These results reflect loans closed during the
hook or crook, made an effort to repay these December 24-31 period. Typically, the inter-
government funds. Now the Congress is est rate is determined 30 to 45 days before
intent on using the TARP funds as their own the loan is closed. Thus, the reported rates
personal piggy bank – for uses not envi- depict market conditions prevailing in mid- to
sioned nor sanctioned by the enabling legis- late-November. More information can be
lation. According to this report, “The focus of found at
TARP has begun to shift, however, as the January%20MIRS%20Jan%202010%
early TARP programs that invested huge 20final.pdf.
sums in banks are now closed to further
 Foreclosure Prevention & Refinance Re-
investments and most of the largest bank
port (Third Quarter) … “As of November
recipients have repaid their TARP funds.
2009, Fannie Mae and Freddie Mac, imple-
Treasury has stated that, going forward, mented more than 405,000 trial and perma-
TARP will focus on foreclosure mitigation nent loan modifications under the Admini-
efforts, small-business lending, and a con- stration’s Home Affordable Modification Pro-
tinuation of support for the asset-backed gram (HAMP) and refinanced 4 million
securities (‘ABS’) markets.” The purpose of loans. The report, which now includes data
the TARP payback was to reduce the debt on delinquencies, loan modifications and
owed by the government and reduce the refinance activity for each Enterprise, details
future tax requirements on American citi- the actions Fannie Mae and Freddie Mac
zens. Now we find that Congress is unwilling have taken to prevent foreclosures and keep
to reduce the debt and pursue their own people in their homes. The report shows:
course of bailing out other special interests
who, I am sure, are contributing heavily in  As of Nov. 30, 2009, the Enter-
the 2010 election cycle. To read the full re- prises had implemented 405,700
port in context, it may be found at http:// HAMP active trial and permanent loan modifications.
January2010_Quarterly_Report_to_Congr  Foreclosure starts on Enterprise
ess.pdf. loans declined in the third quarter
by 15 percent.
FHFA: Federal Housing Finance Agency
 Loan modifications entered into on
 Monthly House Price Index … “U.S. house Enterprise loans, excluding HAMP
prices rose 0.7 percent on a seasonally ad- trial loan modifications, increased
justed basis from October to November, 14 percent from the second quar-
according to the Federal Housing Finance ter, from 32,300 to 36,700.
Agency’s monthly House Price Index. Octo-  Nearly half of loan modifications
ber’s previously reported 0.6 percent in-
crease was revised downward to a 0.4 per- (Continued on page 23)
Page 23

(Continued from page 22) GAO: Government Accountability Office

completed in the third quarter, ex-
cluding HAMP trial modifications,  Financial Management: Improvements
resulted in borrowers’ payments Needed in National Flood Insurance Pro-
decreasing by over 20 percent. gram's Financial Controls and Over-
sight. This report addresses past systemic
 Loans modified in recent quarters weaknesses in the National Flood Insurance
performed slightly better six Program in order to strengthen current op-
months after modification than did erations. The full report may be obtained at
earlier modifications.
 Short sales and deeds in lieu in- 66 and the summary can be obtained at
creased by 39 percent during the
third quarter from 12,300 to
17,400.  Loan Performance and Negative Home Eq-
uity in the Nonprime Mortgage Market. This
 Loans 60-plus-days delinquent report examines the evolution and condition
increased by 260,300 loans or of the market for nonprime loans and in-
nearly 20 percent during the third cludes data relating to the characteristics of
quarter to 1.6 million. nonprime loans and borrowers, and the per-
More information can be found at http:// formance of nonprime mortgages originated from 2000 through 2007 (the last year in
closurePreventionRefinanceRpt10810.pdf. which substantial numbers of nonprime
mortgages were made) as of March 31,
 Status of the Conservatorship of Fannie 2009.
Mae and Freddie Mac … The FHFA’s letter
to Senator Chris Dodd, Chairman of the “This report (1) provides information on the
Senate Banking, Housing and Urban Affairs performance of these nonprime loans as of
Committee and Barney Frank, Chairman of June 30, 2009, and describes forecasts
the House Financial Services Committee to made by others of future loan performance;
update the regulators on “the conservator- and (2) examines the extent of negative
ships of Fannie Mae and Freddie Mac.” home equity among nonprime borrowers in
“Recently there has been considerable selected metropolitan areas and nationwide.
speculation regarding how the future direc- In addition, enclosure VI describes the pre-
tion of the Enterprises' business activities liminary results of our analysis of the demo-
interacts with their status in conservatorship. graphic characteristics of nonprime borrow-
A key motivation for this letter is to provide ers—including race and ethnicity—whose
greater clarity to policymakers and market loans originated in 2005. This report also
participants on the Federal Housing Finance provides supplemental information on the
Agency's (FHFA) plans for the Enterprises' performance of nonprime mortgages by
business activities while they operate in con- annual loan cohort, product type, Census
servatorship.” The entire letter can be ob- division, state, and congressional district.”
tained at For statistics wonks, more information can
Conservatorhsip%20Letter%202%202% be obtained at
2010.pdf. getrpt?GAO-10-146R.

FED: Kansas City Federal Reserve Bank JCHS: Joint Center for Housing Studies of
Harvard University
 Adverse Conditions in Fed’s 10th District
… “Unemployment, lower income, lack of  Indicator Suggests Remodeling Upturn in
insurance and poor housing choices are 2010 … “Homeowner improvement spend-
cited in the latest survey as factors impairing ing is likely to reach a cyclical bottom in the
financial recovery among low- and moderate current quarter and steadily increase
-income (LMI) populations in the Tenth Dis- through 2010 according to the Leading Indi-
trict. The quarterly LMI Survey measures the cator of Remodeling Activity (LIRA), re-
economic conditions of low- and moderate- leased by the Remodeling Futures Program
income populations in the Tenth Federal at the Joint Center for Housing Studies of
Reserve District and the organizations that Harvard University. The LIRA projects an-
serve them.” The survey may be obtain at nual declines in home improvement spend- ing will ease from the current rate of 12.0
LMISurvey.htm?ealert=LMI0129 percent to 3.1 percent in the third quarter of
2010.” Considering that home remodeling
 Basics for Bank Directors … “The 5th may be a leading indicator of recovery in the
edition of "Basics for Bank Directors," a housing and financial sectors, you may wish
reference guide for today's bank directors, is to review this report. The press release for
now available at the Federal Reserve’s new the report can be obtained at http://
directors portal which is highlighted in our
“Interesting Links” section below. http:// lira_09_4.html.
Page 24

educational opportunity and choice, irresponsible

CONNECTIONS parenting, disrespect for the law, widespread
drug use, and violence.”
CHUTZPAH: CITY ATTEMPTS TO BLAME Perhaps if one were to consider the apparent
LENDER FOR DECAY negligent and self-serving behavior of the City’s
It appears that the Mayor and City Council of Bal- elected officials and their general disregard for
timore (“The City”) has attempted to mine the improving the infrastructure in impoverished inner
deep-pockets of Wells Fargo Bank by alleging cities, one might draw a different conclusion –
that Wells Fargo’s predatory lending and discrimi- that the City was trying to blame others for their
natory lending activities led to foreclosures that neglect and/or malfeasance while simultaneously
harm the city. According to Court records, “The attempting to pick their pockets.
City asserts that Wells Fargo engaged in the United States District Judge J. Frederick Motz in
practice of reverse redlining, targeting the City’s the United States District Court for the District Of
underserved and vulnerable minority neighbor- Maryland dismissed the complaint against Wells
hoods. These lending practices allegedly have led Fargo, but also allowed the City to file a second
to a disproportionately high rate of foreclosure in amended complaint or seek the opinion of an
the City’s African‐American communities, causing an appellate court. Should you wish to read the
increase in abandoned and vacant homes in those Court’s opinion in context, it may be found at
areas, which in turn has allegedly caused finan-
cial harm to the City.” WellsFargo06jan10.pdf.
“Specifically, the City argues that foreclosures THE PROBLEM WITH MORTGAGE REFORM
have caused:
The basic problem with mortgage reform is that
a. A significant decline in the value of nearby the legislators never admit that it was their legis-
homes, resulting in a decrease in property lative and oversight efforts that led to the mort-
tax revenue; gage meltdown. Thus they often attempt to cure
b. An increase in the number of abandoned problems which are in the past and are no longer
and vacant homes; affecting the future or impose legislative burdens
on those who did not create or exacerbate the
c. An increase in criminal and gang activity as current economic crisis, but are being punished
abandoned and vacant homes become nevertheless.
centers for squatting, drug use, drug distri-
bution, prostitution, and other unlawful ac- Instead of repealing existing legislation in favor of
tivities; newly-crafted legislation, these congressional
bozos layer clause upon clause, bill upon bill,
d. Increased expenditures for police and fire until the result is a hodge-podge of conflicting
protection; legislative initiatives which have loopholes to
allow prohibited behaviors and are almost impos-
e. Increased expenditures to secure aban-
sible to enforce. Where are the trade associa-
doned and vacant homes;
tions when it comes to repealing, not reforming,
f. Additional expenditures to acquire and reha- older legislation which serves no regulatory pur-
bilitate vacant properties; and pose?
g. Additional expenditures for administrative,
legal, and social services.”
Of course, Wells Fargo disagrees and the Court
concurs. “In the present case, the City’s allega-
tions in the Amended Complaint of a causal con-
nection between Wells Fargo’s alleged miscon-
duct and the damages the City claims is not plau-
sible. Thus, using the City’s own figures, Wells
Fargo is responsible for only a negligible portion
of the City’s vacant housing stock. This fact alone
demonstrates the implausibility of any alleged
causal connection between Wells Fargo’s alleged
reverse redlining activities and the generalized
type of damages claimed by the City, e.g., decline
in value of homes and decreased property tax
revenues resulting, increased criminal and gang
activities, and increased police and fire protection
resulting from building vacancies. Moreover, the
alleged connection is even more implausible
when considered against the background of other
factors leading to the deterioration of the inner
city, such as extensive unemployment, lack of
Page 25

ested in real estate and mortgage transactions to

INTERESTING LINKS upload videos for all to see. Some of these videos
are quite professional and informative. It will be a
RESOURCE FOR BANK DIRECTORS AND worthwhile few minutes to browse this video col-

This is a great resource for people interested in

privacy issue and the protection of privacy in this
technological age. There are many resources and
the articles themselves can serve as object les-
sons for those seeking to strengthen their own
document-handling systems and procedures.

The Federal Reserve has implemented a one-stop

portal for those who are serving as bank directors –
or others who have senior positions within the fi-
nancial industry – which contains a wealth of re-
sources. It is well worth the time to examine this

The Mortgage Coach’s video community link pro-

vides a forum for vendors and other parties inter-


ICC does not use the information you provide for any purpose other than to prepare your loan docu-
ments. We do not make your information available to anyone, especially third-party vendors. We do
not engage in statistical analysis of your data nor do we suggest alternative loan programs, insurance
or other products.
For those who would like to receive our informative newsletter automatically each month, please con-
tact Lori at to be added to the list. We are committed to protecting your privacy and
your e-mail address will never be rented, sold, or otherwise shared with any third-parties. View our
privacy policy at:
At ICC, we appreciate and value your business. Feel free to call us toll-free at
(888) 437-3627 or e-mail me at with your suggestions –
Mike Straziuso, President