January 2, 2020

In This Issue:

  • TTIGA: Guaranty Fee to Continue in 2020
  • TDI Holds Hearing on Statistical Codes
  • Underwriters: TDI Adopts 2020 Maintenance Fees and Assessments
  • CFPB Issues Guidance on Construction Loan TRID Disclosures
  • Removing the GSE Patch and Reopening the QM Debate

TTIGA: Guaranty Fee to Continue in 2020

TTIGA | Dec. 18, 2019
In a bulletin distributed Dec. 19, the Texas Title Insurance Guaranty Association reminded title agents to continue collecting the $2.00 Guaranty Fee in 2020.

Read TTIGA's Bulletin »
Additional Guaranty Fee Information »

TDI Holds Hearing on Statistical Codes

TLTA | Dec. 19, 2019
The Texas Department of Insurance held a hearing Dec. 19 to review the proposal to amend the Texas Title Insurance Statistical Plan via the addition of new stat codes for changes made to rules R-5 and R-8 when the new rate rule changes were adopted earlier this year. 
The hearing, which TLTA staff attended, was very brief, and the record was left open for comments until 5 p.m. on Jan. 6. The Commissioner will issue an order at some point after Jan. 6.
TLTA has worked with TDI staff on the development of this proposal, and we continue to participate on your behalf in the process of adopting the new codes.
As soon as the new codes are adopted, we’ll notify you of the effective date so that you can begin collecting that data.
If you have comments, concerns or questions, please contact us at 512.472.6593 or tlta@tlta.com.

Underwriters: TDI Adopts 2020 Maintenance Fees and Assessments

TDI | Dec. 30, 2019
The Texas Department of Insurance adopted maintenance fees and assessments for 2019 that will affect underwriters. The fees for 2020 are lowered from .078 of 1 percent to .068 of 1 percent.
Review the Adopted Changes »

CFPB Issues Guidance on Construction Loan TRID Disclosures

CFPB | Dec. 18, 2019
The Consumer Financial Protection Bureau recently published additional guidance related to disclosing construction and construction-permanent loans under the TILA-RESPA Integrated Disclosure (TRID) Rule.
CFPB published two guides, one on disclosing construction and construction-permanent loans with a separate Loan Estimate and Closing Disclosure for each phase of the transaction and one on disclosing one, combined Loan Estimate, and one, combined Closing Disclosure for both phases of a construction-permanent transaction.
The guides provide guidance and illustrative examples for commonly asked about TRID and Regulation Z provisions related to completing these construction and construction-permanent loan disclosures.

Access Combined Construction Loan and Separate Construction Loan Guides »

Removing the GSE Patch and Reopening the QM Debate

MReport | Dec. 19, 2019
This past summer, the Consumer Financial Protection Bureau (CFPB) reopened a highstakes rulemaking that is expected by many to redefine the requirements for the Qualified Mortgage (QM) under the Ability to Repay/ Qualified Mortgage Rule (ATR/ QM Rule or Rule). When the rulemaking process closes, a new definition is expected to establish the criteria that most borrowers will have to meet to obtain the most affordable housing credit for years to come. 
On July 25, 2019, in an Advance Notice of Proposed Rulemaking (ANPR), the CFPB announced, to the surprise of many, that it planned to allow the “Temporary GSE QM” or “Patch” to expire at the beginning of 2021. The Patch enables mortgage loans eligible for purchase or guarantee by Fannie Mae or Freddie Mac (the GSEs) to be treated as QMs. The ANPR invited comments on the possibility of a short extension of the Patch for an “orderly transition.” More importantly, for the long term, the ANPR also invited comments on whether and how the General QM, which is intended to be available for all mortgage loans meeting its requirements, should be revised in light of the Patch’s planned expiration. 
Before the ANPR was issued, the CFPB issued a request for information in June 2017, in connection with its statutorily mandated reassessment of the ATR/QM Rule. Also, beginning in January 2018, the Bureau issued several RFIs under its “Call for Evidence” that sought public comment on the range of the CFPB’s enforcement, supervision, rulemaking, market monitoring, and financial education activities. These included RFIs requesting information on the CFPB’s rulemaking process, the Bureau’s adopted regulations, and its new rulemaking authorities. In response to the RFIs, the CFPB received several hundred comments from lenders, industry groups, consumer advocacy groups, and individuals concerning the rule. Since the rule’s implementation, mortgage lending has been overwhelmingly confined to the origination of QM loans. According to the Urban Institute, which admits estimates of the non-QM market are difficult to make, non-QM originations in 2018 were $20 to $30 billion of $1.8 trillion total originations. 
A large proportion of QM loans were originated under the Patch, including up to nearly a million loans that would not have qualified as QM loans without the Patch. In the ANPR, the Bureau cited estimates that there were approximately six million closedend first-lien residential mortgage loans in the U.S. in 2018, of which 52%, or roughly 3.12 million, were purchased or guaranteed by the GSEs. Of these 3.12 million loans, approximately one-third of GSE loans or one-sixth of all QM loans, had a debt-to-income (DTI) ratio greater than 43%, exceeding the maximum DTI ratio permitted for general QM loans. Reportedly, a large proportion of these above-43% DTI loans are loans to low- and moderate-income and minority borrowers. 
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