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A HUD/FHA REMINDER ABOUT BRANCH OFFICES
FACTS
Some of you have a mistaken opinion that there is some sort of "national HUD approval" that allows
you to take in FHA loans from any FHA approved branch for any property located anywhere in the United States. As
far as this attorney is aware: THAT IS NOT CORRECT.
If a mortgagee (YOU) is approved to originate single-family FHA mortgages, it (YOU) may take loan applications
for properties located in the branch's single-family origination ending area. A complete listing of lending
areas is the Table of Lending Areas for Single Family Origination. All other origination functions can be
performed in any registered branch without regard to where the property is located. (4060.1Rev2,5-3
MORAL
You must originate within the branch lending area but you can process at any approved branch. This is not a
right to originate anywhere in the United States.
VA LOAN LIMITS TO REMAIN AT $725,500
FACTS
The maximum loan limit on Department of Veterans Affairs guaranteed loans will remain at $729,750 for three
more years under a bill passed by Congress.
The maximum limit on Fannie Mae, Freddie Mac and Federal Housing Administration loans is scheduled to drop
down from $729,750 on Dec. 31 to $625,500 on Jan.1, 2009.
The Veterans Benefits Improvement Act will allow veterans in the highest-cost areas of the U.S. to get zero-down
loans of up to $729,750 until Dec. 31, 2011. Until then, the VA loan limit will be the greater of $417,000 or 125%
of area medium house prices up to $729,750. (S. 3023)
MORAL
You can also use the benefits on more than one home, like when the military transfers you to California from
Arizona. You used $25,000 of benefit in Arizona. Buy new house in California as OO and can use remainder of benefit.
Now you have investment property.
FORECLOSURE STATISTICS-NEVADA FIRST, ARIZONA SECOND AND FLORIDA IS THIRD (WIN, PLACE AND SHOW?)
FACTS
More than 279,500 U.S. homes received at least one foreclosure-related notice in October 2008. One
in every 452 housing units received a foreclosure filing, such as a default notice, auction sale notice or bank
repossession
Nevada, Arizona, Florida had the nation's top foreclosure rates. Nevada has the nation's highest rate
for the 22nd consecutive month in October 2008. One in every 74 Nevada homes received a foreclosure filing
during October 2008. One in every 149 Arizona homes received a foreclosure filing, and in Florida came
in third with one in every 157 homes.
The rest of the top ten in foreclosures were California, Colorado, Georgia, Michigan, New Jersey, Illinois
and Ohio. (ap111308)
MORAL
Seems like a lot of lenders could have been more aggressive in loan modifications and mitigated their losses.
FEDERAL TRADE COMMISSION NAILS PREMIER CAPITAL LENDING FOR VIOLATING SAFEGUARD AND PRIVACY
RULES
FACTS
On Nov. 6, 2008 the Federal Trade Commission settled charges against Texas-based mortgage lender, Premier Capital
Lending Inc., for allegedly violating its Safeguards and Privacy Rules, as well as Section 5 of the FTC Act. The
charges stem from a hacker compromising customer data by breaking into a third-party home seller's computer. Premier
allowed the home seller to use its account to access credit reports in order to refer purchasers for financing.
The hacker then used Premier's credentials to access hundreds of consumer credit reports. The FTC complaint
alleges that Premier violated the Safeguards Rule because it (i) did not take reasonable steps to verify
the home seller's procedures to handle, store, or dispose of sensitive personal information, (ii) failed
to assess the risks of allowing a third party to access credit reports through its account, (iii) failed
to conduct reasonable reviews of credit report requests made on its account by using readily available information
(such as management reports and invoices) to detect signs of unauthorized activity, and (iv) failed to assess the
full scope of credit report information accessible through its account. The FTC complaint also alleged that Premier
violated Section 5 of the FTC Act and the Privacy Rule by misrepresenting its own privacy policy, which stated
"[w]e take our responsibility to protect the privacy and confidentiality of customer information very seriously.
We maintain physical, electronic, and procedural safeguards that comply with federal standards to store and secure
information about you from unauthorized access, alteration and destruction." The proposed settlement bars
deceptive claims about privacy and security policies and requires Premier to establish a comprehensive information
security program, which must be independently reviewed by a third-party.
The FTC settlement like several others we have mentioned in the past covers a 20 YEAR PERIOD.
The proposed settlement states in part:
1- Risk assessment should include consideration of risks in each area of operation, including,
(1) employee training and management, (2) information systems, including network and software design, information
processing, storage, transmission, and disposal, and (3) prevention, detection, and response to attacks, intrusions,
or other systems failure; the development and use of reasonable steps to select and retain service providers capable
of appropriately safeguarding personal information they receive from Premier and requiring service providers by
contract to implement and maintain appropriate safeguards; and
2- That respondents, and their officers, agents, representatives, and employees, shall
not violate any provision of: A. the Safeguards Rule, 16 C.F.R. Part 314; or B. the Privacy Rule, 16 C.F.R.
Part 313. And
3- Premier and their officers, agents, representatives, and employees, shall obtain initial and biennial
assessments and reports ("Assessments") from a qualified, objective, independent third-party professional.
The reporting period for the Assessments shall cover: (A) the first one hundred and eighty (180) days
after service of the order for the initial Assessment; and (B) each two (2) year period thereafter FOR TWENTY (20)
YEARS AFTER SERVICE OF THE ORDER FOR THE BIENNIAL ASSESSMENTS.
4- Each Assessment shall: A. set forth the specific administrative, technical, and physical safeguards
that Premier has implemented and maintained during the reporting period; B. explain how such safeguards
are appropriate to Premier's size and complexity, and the sensitivity of the personal information collected from
or about consumers; C. explain how the safeguards that have been implemented meet or exceed the protections
required by the Safeguards Rule; and D. certify that Premier's security program is operating with sufficient
effectiveness to provide reasonable assurance that the security, confidentiality, and integrity of personal information
is protected and, for biennial reports, has so operated throughout the reporting period.
5- Each Assessment shall be prepared and completed within sixty (60) days after the end of the reporting
period by a person qualified as a Certified Information System Security Professional (CISSP) or as a Certified
Information Systems Auditor (CISA); a person holding Global Information Assurance Certification (GIAC) from the
SysAdmin, Audit, Network, Security (SANS) Institute; or a similarly qualified person or organization approved by
the Associate Director for Enforcement, Bureau of Consumer Protection, Federal Trade Commission.
6- Premier shall provide the initial Assessment to the Associate Director for Enforcement,
Bureau of Consumer Protection, Federal Trade Commission, Washington, D.C. 20580, within ten (10) business days
after the Assessment has been prepared. All subsequent biennial Assessments shall be retained by respondents until
three years after completion of the final Assessment and provided to the Associate Director of Enforcement. (FTC
File No.: 072 3004)
MORAL
I wrote about this before. When you violate Gramm-Leach-Bliley Act or Safeguarding Privacy Act and now the "Red
Flags" identity theft prevention act you will suffer. Note that no monetary penalty is requested by FTC. BUT,
there is the possibility of litigation by the borrowers whose financial data has been compromised. There is the
loss of integrity to the company because it allowed a consumer to take the data home and have access to its credit
reporting facilities without sufficient safeguards and there is the very large increase in overhead to have these
reports run every two years to give to the FTC.
So, do you have your:
1. Safeguarding Privacy Manual in place to protect the data and to protect yourself against potential
FTC discipline?
2. Identity Theft detection manual required by FTC to be in place by May 1, 2009?
If not go to our website http://www.lendinglaw.com and then to
publications where you can obtain either or both before the FTC comes out and finds you have neither.
AMENDED CALIFORNIA LAW CHANGES THE WAY MORTGAGE BROKERS CAN SOLICIT BY DIRECT MAIL
FACTS
Existing law regulates the solicitation of sales by telephonic sellers and specifies those representations by
a telephonic seller to a prospective purchaser that constitute a telephonic solicitation. Existing law prohibits,
subject to certain exceptions, a telephone solicitor from calling any California telephone number, beginning on
or after the 31st day after the national "do not call" list becomes available, to, among other things,
seek to offer a prize; to rent, sell, exchange, promote, gift, or lease any goods or services; to offer or solicit
credit; to seek certain marketing information; or to seek to sell or promote any investment, insurance, or financial
services. Existing law does not prohibit a telephone solicitor from contacting by mail a subscriber whose telephone
number appears on the "do not call" list to obtain the subscriber's express written permission allowing
the telephone solicitor to make the otherwise prohibited calls.
Commencing Jan. 1, 2009 a person that sends a solicitation by mail that solicits a recipient whose
telephone number is not on the national "do not call" registry to consent to receive information
via telephone to include a clear and conspicuous identification of the sender and the entity that is requesting
permission to call, the telephone number to which the calls are to be placed, and notice that the recipient
may be contacted by a telephone solicitor.
A mailing that seeks express written permission to call a recipient who is on the "do not call"
list must contain certain information, including identification of the sender of the mailing and of the entity
that is requesting permission to call, the telephone number to which the calls may be placed, the signature of
the recipient authorizing the calls, and specified notice, unless there is an established business relationship
between the subscriber and the solicitor, in which case express written permission would not be required.
"Express agreement" does not include any consent or permission included in any contract of adhesion.
(ab2059, b&pc17514,17592)
MORAL
If you send direct mail and do not ask to telephone then no problem. If you ask permission to phone then be
sure to comply and add content to the direct mailer.
CALIFORNIA FAMILY MEMBERS ARRESTED FOR
MORTGAGE FRAUD
FACTS
The father and mother-in-law of two leaders of an alleged Riverside County-based investment group that bilked
scores of homeowners in multiple states were charged this week with federal crimes that could lead to prison terms.
The charges brought by the U.S. attorney against Dow Duncan and Joetta Zimmer do not mention the investment
scheme. Duncan and Zimmer were arrested on charges of making false statements to lenders on mortgage applications
to purchase homes for themselves.
Duncan is the father of James B. Duncan, and Zimmer is the mother-in-law of Hendrix Montecastro, two of three
leaders of a network of companies, chief among them Murrieta-based Pacific Wealth Management and Stonewood Consulting
Inc., whom the Securities and Exchange Commission has accused of defrauding at least 95 investors of more than
$11 million and forcing many of them into foreclosure.
A third man, Maurice E. McLeod, recently accepted a court settlement of the lawsuit filed against the group
that could require him to return ill-gotten gains. To date none face criminal charges.
In the federal securities litigation and in a civil lawsuit filed by distressed investors, Pacific Wealth and
its affiliates are accused of having falsified loan documents to enable investors to buy multiple properties
for which they were not financially qualified and which ultimately went to foreclosure. The financial advisers
allegedly profited by having the houses appraised for more than market value and pocketing the difference in excessive
fees.
Court documents that the U.S. attorney filed in the U.S. Central District Court in Riverside say that Zimmer
and Duncan on separate occasions inflated their income and assets and falsified their employment history on mortgage
applications with Washington Mutual Bank to purchase houses in the La Cresta neighborhood of Murrieta in which
they falsely stated they intended to live.
A grand jury indictment said that in July 2007 Zimmer obtained from Washington Mutual a $1.46 million first
mortgage and a $292,300 second mortgage by reporting her gross monthly income as $60,000, that she held more than
$3 million in assets and that she intended for the house she was buying to become her primary residence. All
these statements were false, the indictment said.
Separately, the U.S. attorney submitted a complaint asking for the indictment of Duncan for making false
statements in order to qualify for two mortgages totaling $1.8 million from Washington Mutual to buy a house
to live in. According to the complaint, Duncan, the owner of a construction company, said on his mortgage application
that he had monthly income of $60,000 when his federal tax return showed it was less than $3,400 in 2006 and less
than $2,600 in 2007.
If convicted on the charges in the indictment, Zimmer could face up to 20 years in prison. Zimmer posted
$250,000 bail and was ordered detained at her home. The court set Dec. 22, 2008 as the initial trial date.
Duncan was released after posting a $350,000 bail bond, pending a possible indictment on the charges
against him. (prsent110808)
MORAL
Pay attention. 1- They are charge with a federal felony because among other things they stated the purchase
was for the property to be their primary residence. Have you done this with any buyers? Where the buyer put primary
residence on the loan application when the buyer was living in a home recorded in the buyer name already? Or buying
two homes at the same time and listing both as primary residence? 2-Mr. Duncan only made less than $3,400 in 2006
and less than $2,600 in 2007 according to his federal tax returns. Therefore how can he afford a $350,000 bail
bond? Interesting question?
GEORGIA MORTGAGE BROKER AND HUSBAND CAUGHT IN FBI STING FOUND GUILTY OF MORTGAGE FRAUD-SHE
GETS 11 YEARS
IN FEDERAL PRISON
FACTS
On Nov. 10, 2008 ADRIENE NEWBY-ALLEN of Alpharetta, was sentenced to serve more than 11 years in federal
prison for her role in a multi-million dollar mortgage fraud scheme. NEWBY-ALLEN pleaded guilty in July
2008 shortly before trial. NEWBY-ALLEN was sentenced to 135 months in federal prison to be followed by five
years of supervised release, and ordered to pay $5,278,703 in restitution.
From mid-2004 through March of 2006, NEWBY-ALLEN conducted a mortgage fraud scheme that siphoned off
millions of dollars in fraudulently inflated mortgage loans being provided to unqualified straw buyers, one
of whom was her husband and co-defendant, BRINSON ALLEN. ALLEN was found guilty of multiple charges relating
to the fraudulent scheme on July 30, 2008, by a federal jury after a ten-day trial and will be sentenced at a later
date.
NEWBY-ALLEN inflated the sale prices of residential real estate and arranged for the submission of false loan
applications, documents and other information to mortgage lenders to obtain loans for the unqualified straw buyers.
When the loans closed, NEWBY-ALLEN and her co-conspirators received millions of dollars of the mortgage loan proceeds
through NEWBY-ALLEN'S shell company, "Swiss Acquisitions," by using misrepresentations about disbursements
of the loan proceeds. NEWBY-ALLEN personally received more than $1 million of the loan proceeds obtained
in the fraudulent scheme. (usattyga111008)
MORAL
This was the result of an FBI sting according to the U.S. Attorneys' office. Notice the sentencing in these
mortgage fraud cases are increasing and stings are now going on. Thus, the next person that asks you for a loan
and they do not qualify may be an FBI agent. Therefore you should not do it at all. Stop now and see your attorney
to mitigate or do not stop and pay the attorney to defend you later.
TWO FROM MISSOURI INDICTED FOR MORTGAGE FRAUD
FACTS
On Nov. 10, 2008 RUSSELL TODD McBRIDE of Creve Coeur and ROBERT P. WROLSTAD of O'Fallon have been indicted
in a mortgage fraud scheme involving the sale of residential real estate located in Sikeston, Mo. McBride and Wrolstad
have been charged in a 34-count indictment for their alleged involvement in the scheme.
According to the indictment, McBride was an operator of Century Mortgage and Finance Inc., which was
in the business of providing mortgage-related services, and had offices located in Sikeston, Cape Girardeau, St.
Louis County and elsewhere. Employees and others associated with Century Mortgage would prepare mortgage applications
and supporting documents for borrowers. Then, for a fee, Century Mortgage would find a mortgage lender to make
the loan. Wrolstad is alleged to have worked with McBride and for Century Mortgage, providing services including
assisting in closing real estate transactions and working with title companies.
The indictment alleges that from at least July 2005 and continued though Nov. 28, 2006, involved investors
recruited by McBride and Wrolstad purchasing real estate primarily located in Sikeston. The owners of the real
estate would sell the properties at or near fair market value to investors recruited by and known to McBride and
Wrolstad. The investors paid prices significantly greater than the actual selling price received by the sellers
for the properties. The investors would purchase the property at a fraudulent and overvalued price by obtaining
loans to purchase the property. McBride and Wrolstad obtained appraisals, which significantly overvalued the properties,
which enabled them to personally obtain inflated loan proceeds despite having no interest in the conveyed real
estate.
According to the indictment, McBride represented to investors that the residential real estate properties were
good investment properties, that the rents would pay the mortgage, that the properties could be acquired with "no
money down," and that the properties could be sold, sometimes in approximately a year, at a profit. McBride
and Wrolstad are alleged to have also paid monies to investors as an inducement for them to purchase residential
real estate funded by loans brokered through Century Mortgage. For example, in one case a purchaser paid $66,000
for a property that the seller sold for $7,500. The indictment alleges that in many cases, purchasers of real estate
secured by loans brokered by Century Mortgage did not provide closing costs or down payments to acquire the real
estate. McBride and Wrolstad, and others acting on their behalf, would provide the investors with the funds for
the down payment and closing costs. McBride and Wrolstad are also alleged to have caused mortgage loan companies
to send the loan proceeds by wire transfers in interstate commerce, and to have caused warranty deeds, deeds of
trusts and other closing documents to be sent from the offices of the closing agents by commercial interstate carrier
to the lenders and the Recorder of Deeds in Scott County, Mo.
McBride and Wrolstad are also alleged to have directed purchasers and closing agents to pay McBride and Wrolstad
substantial sums of the mortgage loan proceeds by checks or wire transfers into their personal bank accounts or
other bank accounts controlled by them.
The indictment charges McBride and Wrolstad with one count of conspiracy to commit wire fraud and mail fraud,
12 counts of wire fraud and 12 counts of mail fraud. In addition, McBride is charged with six counts of money laundering,
and Wrolstad is charged with three counts of money laundering. If convicted, each count of wire fraud and mail
fraud carries a maximum sentence of 20 years in prison and/or fines up to $250,000; each count of money laundering
carries a maximum sentence of 10 years in prison and/or fines up to $250,000. The conspiracy count carries
a maximum sentence of five years in prison and/or fines up to $250,000. (usattedmo111008)
MORAL
Notice that the indictment is over loans that occurred three years ago and they can go to prison for 20 years
if found guilty. Remember they are innocent until proven guilty in a court of law BUT do you really want to spend
that much money to prove you are innocent. Even if found or pleading guilty you still need to defend to keep "loss"
down and try to stay of or minimize the stay in prison. Do not do it. It is never ever worth it.
NEW YORK PAIR FOUND GUILTY IN A MORTGAGE FORECLOSURE RESCUE SCAM
FACTS
Andrea Moore and Michael Irving were found guilty of participating in a home foreclosure rescue scheme, which
defrauded homeowners who were facing foreclosure and banks and other lenders who made mortgage and home equity
loans.
From September 2004 through April 2005, the pair targeted homeowners whose homes were in foreclosure
or facing foreclosure. Homeowners were offered a plan to "save" their homes, including by refinancing
the homeowners' debt with new, larger mortgages.
The defendants induced troubled homeowners to "sell" their homes to third parties, or "straw
buyers," who would apply for loans to be used to "save" the home and that once the straw buyer obtained
the mortgage, the proceeds would be used to pay off the homeowners' old debt and make one year's worth of payments
on the new loans. During that year, they could continue to live in their homes and work on improving their finances
and credit. At the end of the year, the title to their homes would be returned to them by the straw buyers, with
their credit repaired and their homes saved.
The defendants would then submit loan applications to banks and lending institutions on the straw buyer's behalf
using documents containing false or misleading information, concerning the straw buyer's income, assets, and existing
debt.
The defendants also misrepresented to lenders that the straw buyers intended to reside in the property
that would secure each mortgage or loan, when, in fact, the properties were already occupied by the distressed
homeowners.
Moore and Irving obtained numerous home mortgages valued at well over $10 million. In some instances,
they failed to make even one payment on the loans, causing the loans to default immediately; in nearly every other
case, they eventually failed to make the payments and defaulted on the loans.
The distressed homeowners lost the titles to their homes and faced eviction, the straw buyers owed the lenders
hundreds of thousands of dollars that they were unable to repay, and the lenders suffered losses from the defaulted
loans.
Moore was found guilty of one count of conspiracy to commit bank and wire fraud, four counts of wire fraud and
one count of bank fraud. Irving was found guilty of one count of conspiracy to commit bank and wire fraud and one
count of wire fraud. The conspiracy and bank fraud counts carry a maximum prison term of 30 years and a maximum
fine of the greatest of $1 million or twice the gross pecuniary gain or loss resulting from the crimes.
The wire fraud counts carry a maximum prison term of 20 years and a maximum fine of the greatest $250,000
or twice the gross pecuniary gain or loss resulting from the crimes. This is in addition to paying restitution
to the victims. (nocogaz111408)
MORAL
Presented this way, I believe the two are looking to do a lot of time in federal prison. This was a 14-day trial.
Unless legal counsel was appointed they probably paid at lease well over $150,000 each in legal fees. Oh well,
room and board awaits in a federal prison.
FOUR TEXAS LOAN OFFICERS CONVICTED FOR MORTGAGE FRAUD
FACTS
On Nov. 10, 2008 Jarvis Fontenette, an account executive for various lenders, was convicted of conspiring
to commit mail fraud and wire fraud as part of a scheme to defraud Houston area residential mortgage lenders. Fontenette
pled guilty to the conspiracy charge, admitting that he and co-conspirators devised and operated a mortgage
fraud scheme which involved the recruitment of individuals/borrowers to purchase residential properties at or near
100% financing using their good credit and using loan officers at mortgage brokerage offices to furnish false and
fraudulent information to the lenders. Once the lender funded the loans, money was withdrawn from the transaction
and shared among the conspirators.
Fontenette worked as an AE for various lenders for a period of time during the life of the conspiracy and was
the AE on various loans obtained fraudulently during 2003 and 2004 by co-conspirators Michael Goodson, Nancy
Booth, and Leslie Tarrance, Sr. Fontenette used his position to assisted his co-conspirators in getting fraudulent
loans approved by the lender and received kickbacks for his assistance.
In 2005 and 2006, Fontenette worked with loan officer Nancy Booth and homebuilder Les Tarrance, Sr., d/b/a
Ultra Classic Homes, along with at least two other individuals to obtain fraudulent residential mortgage loans
on two Ultra Classic Homes. The Uniform Residential Loan Applications and supporting documentation contained material
false and fraudulent information concerning the borrower's income and ability as well as incentive to repay the
loans. The income used to obtain the loans in the borrower's name was grossly inflated. Fontenette
and his co-conspirators created the false pretense that these houses were each being purchased as the borrower's
primary residence. The same borrower was used to purchase two additional properties. On both occasions, fraudulently
obtained mortgage loans were used to purchase the properties through misrepresentations concerning the borrower's
creditworthiness.
Fontenette, acting as the loan officer, also obtained a loan in the name of the borrower for his own residence
intentionally misstating the borrower's assets and liabilities on the loan application. On multiple occasions,
Fontenette caused this same residence to be flipped into the name of a new borrower and fraudulently obtained a
new loan each time the loan neared default so he could continue to live in the house without have the financial
burden of making the mortgage payment.
The conspiracy to commit mail fraud and wire fraud carries a maximum penalty of 20 years imprisonment, and
a $250,000 fine in addition to any restitution which may be ordered by the court. Sentencing has been set for
Feb. 9, 2009.
Goodson, Booth and Tarrance have all been convicted for their roles in the mortgage fraud scheme. Booth
and Tarrance are pending sentencing and have a range of punishment up to 20 years imprisonment. Goodson was
sentenced to 293 months imprisonment. (usattysdtx111008)
MORAL
Please note: The government went back to loans done over five years ago to get fraud; part of the fraud is owner
occupied when in fact the property was not owner occupied and one of the people will spend the next 24 plus years
in a federal prison. I suggest you do not do it!
VIRGINIA MAN PLEADS GUILTY TO $33 MILLION MORTGAGE FRAUD
FACTS
Vijay K. Taneja of Fairfax pleaded guilty to one count of conspiracy to commit money laundering in connection
with a mortgage fraud scheme involving his company, Financial Mortgage Inc., which originated and sold mortgages
on residential properties in the Washington, D.C., metropolitan area.
Sentencing is set for Jan. 30, 2009. The maximum potential penalty for conspiracy to commit money laundering
is 20 years incarceration and a fine of $500,000.
Before FMI sold its mortgages to financial institutions as long-term investors, FMI utilized another group of
financial institutions (referred to as "warehouse lenders") to temporarily fund the mortgages before
they were sold. Beginning in 2001, FMI began defrauding a series of warehouse lenders and eventually two
other financial institutions serving as long term investors, causing an accumulated loss of at least $33 million
to four financial institutions by the time FMI filed for bankruptcy in June 2008. The financial institutions
were First Tennessee Bank, Franklin Bank, Wells Fargo Bank, and EMC Mortgage Corporation, a wholly owned
subsidiary of JP Morgan Chase & Co. Taneja accomplished the scheme by (i) creating fictitious loans with
bogus loan closings, (ii) selling the same legitimate loan to multiple investors, and (iii) pocketing
the proceeds generated from refinancing loans, when the bulk of those proceeds were intended to payoff prior mortgages
on the same properties. Court documents state that for at least part of the scheme Taneja conspired with the
owner of TitlePro, a Fairfax title company. The company went out of business in May of 2008. (usattyedva111308)
MORAL
Notice the prosecutor went back to things that occurred over seven years ago. Did you do anything bad over seven
years ago? Are you on the prosecutorial list?
WASHINGTON STATE CHANGES ITS POSITION ON YSP DISCLOSURE
FACTS
I previously wrote disclosed the State of Washington's position that the YSP had to be disclosed by those lenders
that funded off warehouse line but did not underwrite the loan. Since then the DFI apparently has had a change
of heart.
To repeat (except for number 3): Three broker classifications determine the disclosure requirements:
1. Pure Broker. Assists borrowers to obtaining a residential mortgage loan. Loans
close in the name of the lender. Must disclose YSP.
2. Table Funding Broker. Loans originated in brokers' name with funds contemporaneously
supplied by lender to whom loan is assigned at same time as funded. Disclose YSP.
3. Loans in name of broker from a legitimate warehouse line of credit. The lender
or other loan purchaser does the underwriting and that lender or other loan purchaser makes the final underwriting
decision. NOW you do not have to disclose the YSP.
MORAL
1. Who knows what tomorrow may bring? And
2. Cindy Fazio has invited calls. She may be contacted at 360-902-8800.
Thank you Jack Tenold and John A. Long, Esq.
THE INFORMATION HEREIN IS NOT LEGAL ADVICE.
AN ATTORNEY SHOULD BE CONSULTED IF YOU DESIRE LEGAL ADVICE.
