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The State Regulatory Registry (SRR) recently issued proposed changes to Mortgage Call Reports (MCR) submitted through the Nationwide Mortgage Licensing System and Registry (NMLS).
MCRs are quarterly reports of loan activity and reports of financial condition submitted through the NMLS that are required by the Secure and Fair Enforcement for Mortgage Licensing Act of 2008. The two types of MCRs are the Standard MCR (S-MCR) and Expanded MCR (E-MCR).
Both types of MCRs consist of the Residential Mortgage Loan Activity Report (RMLA) and the Financial Condition Report (FC). The RMLA report collects individual information such as application, line of credit, and repurchase while the FC report collects company financial information.
The E-MCR is required for a company that indicates it is a Fannie Mae- or Freddie Mac-Approved Seller/Servicer or Ginnie Mae Issuer. However, most companies file the S-MCR.
The SRR is seeking comment to four proposals in regard to the NMLS MCR, including:
1. The definition of application;
2. Required reporting on the amount and count of closed loans that qualify as “Qualified Mortgages;”
3. Required nationwide and additional state-specific servicing reporting; and
4. Additional fields to capture changes in loan application amount.
To avoid the confusion that exists in state and federal laws when it comes to defining the term “application,” the SRR is proposing a uniform definition which will be applicable to the S-MCR and the E-MCR.
According to the SRR, “an application is an oral or written request for an extension of credit encumbering a one- to four-family residential property.” This includes prequalification requests resulting in an adverse action. In addition, the proposal also outlines what application date should be used for reporting.
Loans which would fall under the “application” definition include, but are not limited to:
►One- to four-family residential properties (including second homes and investment) as well as preapprovals;
►One- to four-family residential properties for construction (made directly to the borrower);
►Lines of credit (reported at maximum approved credit line);
►Refinance loans; and
►All purchases loan requests in which an Equal Credit Opportunity Act (ECOA) notice is issued.
The SRR is also proposing that all companies completing the MCR must submit additional information in regard to qualified mortgages (QM). According to the proposal, there are three main groupings for QMs and they include:
1. “General definition” in which any loan that meets the minimum product feature requirements with a debt-to-income (DTI) ratio of less than or equal to 43 percent;
2. “GSE eligible” in which any loan meets the minimum product feature requirements and is eligible for purchase or guarantee, regardless of the DTI; and
3. “Small creditor” in which the organization has less than $2 billion in assets and annually originates 500 or less first mortgages.
The SRR says it expects to publish final changes to the MCR in November 2014 and implement these changes as soon as January 2015, with the first reporting deadline of May 15, 2015.
Ray Hagan is senior regulatory compliance analyst at AllRegs. First introduced in 1989, AllRegs is used by virtually all of the top 100 lenders, as well as throughout numerous governmental agencies, including Fannie Mae, Freddie Mac, the FHLBs, FHA, VA, RHS, Ginnie Mae and more. For additional information, call (800) 848-4904 or visit www.allregs.com.
This article originally appeared in the December 2014 print edition of National Mortgage Professional Magazine.