RDH Education Services

Syllabus and Outline

8 Hour Classroom SAFE CE – # Today’s Basics

Course Description and Purpose

This course covers SAFE Continuing Education Requirements for any state that does not require a state specific course or a number of hours above 8. Specifically, this course includes the required 3 Hours on Federal Law and Regulations, 2 Hours on Ethics,2 Hours on Nontraditional Mortgages as well as 1 hour of elective education.

The modules included are:

Federal Law - TILA

In this course, we are going to cover the Truth-in-Lending Act, generally known as TILA. Along with any discussion of TILA, there are several important amendments. One that we will spend a fair amount of time on is HOEPA. We have also included the newest updates resulting from MDIA. Knowing TILA well will be critical for your business with regards to regulators, litigation and reputational challenges. We are going to get a “first look” at the new Loan Estimate, the combined GFE/TILA disclosure effective August 2015.

This course additionally details the Truth-In-Lending Disclosure, the Right to Rescission Form and the Section 32 Truth-In-Lending Disclosure

  • TILA – Truth-in-Lending Act “Reg Z” including MDIA updates. TILA is the most important US consumer protection law with regard to borrowing. It protects consumers' interest by requiring correct and sufficient disclosure of lending terms and costs on most types of consumer credit including mortgage loans.
  • HOEPA – Home Ownership and Equity Protection Act “Reg Z.” Amidst the rapid growth of subprime lending, the Congress in 1994 passed the Home Ownership and Equity Protection Act (HOEPA), an amendment to TILA, to help curb predatory lending. HOEPA is a key protection for consumers with regards to predatory lending.

Ethics Requirement - Ethics, Fair Lending and Fraud

This course explores several aspects of ethical mortgage lending. We will present a simple ethics framework for guiding individual decisions. We will define and illustrate good ethical practices in the lending industry. We will reinforce the need to correct poor behaviors and prevent fraud and misrepresentation in order to protect the borrower. Finally, we discuss the critical integration between fair lending laws and ethical behavior.

Chapter 1. We discuss Ethical Action and a couple potential frameworks

Chapter 2. We generally discuss common ethical failures of MLOs and how to detect and avoid misrepresentation and fraud by monitoring industry participants

Chapter 3. We focus on best practices MLOs should pursue to avoid misrepresentation and fraudulent practices

Chapter 4. We tie back to our initial chapter by discussing fair lending laws

Nontraditional Mortgages – FHA Overview

This course discusses the Federal Housing Administration’s Insurance Program, generally called “FHA.” FHA was mandated by the National Housing Act in 1934. The loan programs that evolved out of that Act and its consequent regulation have been a cornerstone for many Americans pursuing the American Dream.
We will introduce FHA, from its concept to the systems involved in starting the FHA loan origination process. We will also discuss many of the different loan programs offered through FHA. The concepts included in this lesson are:

  • Background Discusses the concept of FHA and how the program works
  • Key FHA Underwriting Guidelines, Primary FHA Loan Programs, Specialty FHA Loan Programs, HECMs and Enhancements to FHA Loan Programs. Gives an overview of FHA loan programs, including who is eligible, special conditions related to each program and any mechanics associated with the implantation of an FHA insured loan under that specific program
  • FHA Systems. Lays out, from a practical viewpoint, what tools a loan originator would use when originating an FHA loan, including FHA Connection, CAIVRS and the case number assignment workflow.
  • NMLS).

Nontraditional Mortgages - FHA 300 – Borrower Credit and Eligibility

This course discusses who is eligible and who is ineligible for the Federal Housing Administration (FHA) mortgage insurance. We will discuss eligibility of borrowers, Co-Borrowers, Co-Signers, non-purchasing Spouse and Living Trusts, to state and local government agencies, and approved nonprofit organizations. We will also discuss potential remedies for persons with eligibility issues.

Chapters include:

  • Eligibility. Details the basic factors that make for an ineligible borrower.
  • Types of Borrowers and FHA Requirements. Discusses different borrowers that are eligible for FHA insurance.
  • Credit Issues of Borrowers, Co-Borrowers and Co-Signers. Looks at the issues affecting credit. This includes learning about judgments, bankruptcies, collections and foreclosures. We discuss a number of problematic borrowers and also the various ways to remedy the situation to help your client obtain an FHA loan.
  • FHA Application Form (Declarations). Lastly, we go through the section on the loan application that this entire lesson leads up to – the declarations section for an FHA loan application

Presented by RDH Education Services

This is a live instructor led course. Your RDH Education instructor ______has many years experience teaching Mortgage and Real Estate professionals.

RDH Education Services can be contacted at:

4361 Technology Dr, Unit A, Livermore, CA94551

877-734-4347

NMLS Approved Course Provider - ID number #1400385

Course Learning Objectives

Upon successful completion of this course you will have a strong understanding of TILA (Reg Z) and its major amendments. You will have a detailed understanding of the TILA standard and section 32 disclosures. You should be able to articulate the reasons these laws exist from a consumer protection standpoint. You will also have a general understanding of what kind of standards each law and regulation aims to create.. You will also review Fair Lending Laws and apply those to the basics of ethical action that we introduce early in the course. You will have a review of how MLOs should view ethical action and what they can do to prevent missteps and misrepresentation and to avoid and to detect fraudulent actions. You will be able to explain the concepts behind the FHA Insurance Program, know some of the key loan programs your client may qualify for and be able to work with some of the “tools of the trade” when originating an FHA insured loan.You will also know the basic tenets of eligibility and ineligibility for an FHA loan applicant. You will understand the various credit deficiencies that a potential FHA loan borrower might have and what remedies or exceptions exist and gain an idea as to how to qualify someone who has credit issues.

Course Materials

The course materials consist of text and a slide presentation. Text is available online.

Course Expectations

•Attendance is mandatory to receive course credit.

•Be on time to class

•Active participation is required in this course. Students are expected to be actively engaged with the material, listen to and follow the directions of the Instructor, participate in group discussions and activities, and complete all student workbook activities as assigned.

•Students are expected to be respectful when interacting with the instructor and other students in the classroom and refrain from inappropriate language or derogatory comments.

•Cell phones should be on mute or turned off.

•No computers, notebooks or pads turned on while class is in session.

•Cell phones, computers, notebooks or pads should be off of the desk top.

•Tape recorders are not permitted during class lecture sessions.

•If you leave the classroom while class is in session you must leave your attendance sheet with the proctor or instructor who will initial each time out and time in.

•Please turn in your attendance record at the end of class to receive your certificate of completion and your evaluation form.

Course Completion

Before your completion status can be transmitted to the Nationwide Mortgage Licensing System & Registry (NMLS), you are required to:

  • Spend the minimum required amount of time in the course.
  • Interact with the instructor, answer questions and participate in discussions.
  • Complete all the required activities.
  • You must participate in class discussions, role play and other activities in order to be counted as having completed the course
  • Students are required to participate in the end of course assessment.

Course Evaluation

At the conclusion of the course, you will be asked to complete a Course Evaluation.

Thank you for letting us provide your continuing education.

RDH Education Services

Course Specifics

Logistics
  • Instructor
  • Location
  • Start Time
  • Instructor Email
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  • [ ______]
  • [ ______]
  • [ ______]
  • [ ______]

Total Time /
  • This course is 8 credit hours

  • Section 1,
Federal Law -TILA /
  • The course materials will take 3 hours to complete, divided into:
  • Overview – (10 minutes)
  • APR and Finance Charges – (15 minutes)
  • Initial Early Disclosure – (20 minutes)
  • TILA Disclosure – (25 minutes)
  • Advertising Regulation (15 minutes)
  • Additional Key Topics – (15 minutes)
  • HOEPA and Predatory Lending – (10 minutes)
  • HOEPA General Mortgage Requirements – (10 minutes)
  • Higher Priced Mortgages (Section 35) – (10 minutes)
  • High Cost Mortgages (Section 32) – (10 minutes)
  • Discussion of case study (10 minutes)
  • Break (15 minutes)

  • Section 2,
Ethics, Fair Lending, and
Fraud /
  • The course materials will take 2 hours to complete, divided into:
  • Ethical Action – (15 minutes)
  • Fraud, Negligence and Misrepresentation – (20 minutes)
  • Prevention and Consumer Protection – (25 minutes)
  • Ethics and Fair Lending Laws – (30 minutes)
  • Discussion of Case Study (10 minutes)

  • Section 3,
Nontraditional Mortgages /
  • Break (50 minutes)
  • The course materials will take 2 hours to complete, divided into:
  • Background – (10 minutes)
  • Key FHA Underwriting Guidelines – (10 minutes)
  • Primary FHA Loan Programs – (20 minutes)
  • Specialty FHA Programs – (15 minutes)
  • 255: HECM Reverse Mortgage Program – (10 minutes)
  • Enhancements to FHA Loan Programs – (15 minutes)
  • FHA Systems – (10 minutes)
  • Discussion of Case Study (10 minutes)
  • Break (15 minutes)

  • Section 4,
Nontraditional Mortgages – FHA 300 – Borrower Credit and Eligibility /
  • The course materials will take 1 hour to complete, divided into:
  • Eligibility – (10 minutes)
  • Types of Borrowers and FHA Requirements – (10 minutes)
  • Credit Issues of Borrowers, Co-Borrowers and Co-Signers – (10 minutes)
  • FHA Application Form - Declarations – (10 minutes)
  • Discussion of case study (10 minutes)

  • Breaks
/
  • 80 minutes

  • End of course assessment
/
  • 15 minutes

Outline

Federal Law – TILA

I.Overview

A.Laws Covered

  1. Summary of Purpose of TILA and Reg Z

II.APR and Finance Charges

A.APR

B.Finance Charges

C.Amount Financed and Total Payments

D.Accuracy Tolerance for Closed-End Credits

III.Initial Early Disclosure Requirements

A.Loan Types Covered

B.3 Business-Day Requirement

C.7 Business-Day Waiting Period

D.Business-Day Definition

E.TILA Initial Disclosure Requirements for Closed –End Credit

IV.The TILA Disclosure

A.Discussion of the TILA Disclosure

B.First look at the new Loan Estimate

C.TILA Requirements for Periodic Statements

D.Right to Rescission

i.Regulation

ii.Right to Rescission Form

V.Advertising Regulation

A.Full Disclosure of Mortgage Terms

B.Trigger Terms

C.Advertise Only Currently Available Terms

D.Advertised Rates

E.Balloons

F.Promotional / Teaser Rates

G.Misleading Comparisons

VI.Additional Key Topics

E.Loan Originator Compensation and Steering

i.Loan Compensation

ii.Steering

VII.HOEPA and Predatory Lending

A.Predatory Lending Background

B.Subprime Lending

C.Examples of Predatory Lending

VIII.HOEPA General Mortgage Regulations

A.Yield Spread Premium Limits

B.Servicer Limitations

C.Appraisal Limitations

D.Further Advertising Limits

E.3 Business Day requirement

IX.Higher Priced Mortgages (Section 35)

A.APR Trigger

B.Loose Lending

C.Prepayment Penalties

D.Escrow Creation

E.Regulation Evasion

X.High Cost Mortgages (Section 32) Initial Early Disclosure Requirements

A.Loan Types Covered

B.APR Triggers

C.Prohibitions

D.Prohibitions Added After 2000

E.Penalties

Ethics, Fair Lending and Fraud – Moving Forward

I.Ethical Action

A.The Ethics Goal

B.What Brought Us to this Point?

C.The Ethics Pyramid

D.Laws and Regulations

E.Ethical Practices

F.Professional Success

G.Good Ethics are Contagious

H.Professional Conduct

I.NAMP

J.Rotary’s Four-Way Test

K.Application of Rotary’s Four–Way Test to Mortgage Lending

II.Fraud, Negligence and Misrepresentation

A.Introduction

B.Mitigating Fraud by Industry Participants

C.Common MLO Ethical Failures

D.How Wrong Can it Be If Everyone is Doing It?

E.The Borrower Loses Out

III.Prevention and Consumer Protection

A.Develop a Strong Customer Relationship

B.Explain the Paperwork

C.Beware the “Jack of all Trades”

D.Golden Rule

E.What Do We Want to Accomplish?

F.Other Issues to Consider?

IV.Ethics and Fair Lending Laws

A.Overview

B.The Truth-in-Lending Act (TILA)

C.Home Ownership and Equity Protection Act (HOEPA)

D.Mortgage Disclosure Improvement Act (MDIA)

E.Equal Credit Opportunity Act (ECOA)

F.FCRA and Red Flag Rules

G.The Gramm-Leach Bliley Act

H.Real Estate Settlement Procedures Act (RESPA)

I.Appraiser Independence Requirements

J.Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”)

Nontraditional Mortgages – FHA Overview

I.Background

A.Historical Overview

B.The FHA Today

II.Basic FHA Underwriting Guidelines

A.Underwriting the Borrower

B.Underwriting the Property

III.Primary FHA Loan Programs

A.203(b): Traditional Fixed-rate Loan Program

B.251: Adjustable Rate Mortgage

C.234(c): Condominium Loan

D.203(n): Cooperatives Program

IV.Specialty FHA Loan Programs

A.203(l): Rural Area Loan

B.203(k): Rehabilitation Loan

C.221(d): Loans for Low and Moderate Income Housing

D.245(a): Graduated Payment Mortgage and Growing Equity Mortgage Program

V.255: HECM Reverse Mortgage Program

A.Basic Features of a HECM Loan

B.Common Questions Regarding a HECM Loan

VI.Enhancements to FHA Loan Programs

A.Good Neighbor Next Door Program

B.Energy Efficient Mortgage (EEM) Program

VII.FHA Systems

A.FHA Connection

B.Case number Assignment

C.Credit Alert Interactive Voice Response System (CAIVRS)

D.Limited Denial of Participation (LDP) List and GSA’s Excluded Party List

Case Number Assignment Workflow

Nontraditional Mortgages – FHA 300 – Borrower Credit and Eligibility

  1. Eligibility

A.Standard Requirements

B.Ineligible Borrowers

  1. Types of Borrowers and FHA Requirements

A.Co-Borrowers and Co-Signers

B.Upside and Downside of being a Co-Borrower and Co-Signer

C.Non-Purchasing Spouse

D.Living Trust

E.Nonprofit Organization

F.State and Local Government Agencies

  1. Credit Issues of Borrowers, Co-Borrowers and Co-Signers

A.Unpaid Court Ordered Judgment and Collection Account

B.Personal Bankruptcies

C.Real Estate Foreclosure

D.Delinquent FHA Loan

E.Lawsuits

F.Past Due Federal Debt

  1. FHA Application Form - Declarations

8 Hour Classroom SAFE Today’s Basics– Course Syllabus

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