NYSDFS PROPOSED RULE COULD DAMAGE
NEW YORK’S HOUSING MARKET
On November 20, 2017, the New York Mortgage Bankers Association and the Mortgage Bankers Association (MBA) submitted joint comments to the New York State Department of Financial Services regarding a Department’s proposed rule, giving them broad enforcement authority over credit reporting agencies. The rule gives the Department the ability to refuse to renew, suspend or revoke the registration of a credit reporting agency, including any of the three nationwide credit reporting agencies. Should the Department take one of these actions against a nationwide CRA, borrowers in New York State would be unable to obtain a tri-merged credit report, a requirement for FHA, VA, USDA, Fannie Mae and Freddie Mac financing. New York borrowers moving to other states would also be impacted. To view the proposed rule and the NYMBA/MBA comments, click on the following links:
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CFPB ISSUES TRID AMENDMENTS FINAL RULE
On July 7, 2017, the CFPB published “Updates to [the] ‘Know Before You Owe’ Mortgage Disclosure Rule,” to provide more clarity and greater certainty, as well as include technical corrections and amendments. The 560 page document includes:
- Changes to the assistance loan exemption
- Expansion of the KBYO/TRID rule for loans on cooperatives
- Total of Payments calculations and related tolerances
- The use of informational Loan Estimates
- Clarifications regarding the Written List of Providers
- Greater clarity for sharing information among settlement service providers
- Changes regarding Construction Loans and Calculating Cash to Close
- and moreFor a copy of the rule, click HERE
NY FIRST HOME BILL PASSES
The NY First Home bill A5616/S4058 passed both the New York State Assembly and Senate before the end of the 2017 legislative session. The legislation would allow individuals to deposit up to $5,000 per year ($10,000 for couples) of after-tax dollars into a tax-free savings account, to pay for the down payment and closing costs, in the case of a first-time homebuyer. In addition, the principal amount would be treated as a state income tax deduction. To view the legislation, click HERE.
CFPB PUBLISHES PROPOSED HMDA RULE
CLARIFICATIONS AND CORRECTIONS
On April 13, 2017 CFPD Director Richard Cordray signed a proposed rule to make a number of clarifications, corrections, and changes to the revised HMDA regulation. The proposal also establishes transition rules for reporting certain loans purchased by financial institutions and includes additional information about reporting the census tract of a property using a new geo-coding tool the CFPB plans to provide online. To obtain a copy of the proposal, click HERE.
NYS DEPARTMENT OF FINANCIAL SERVICES
PUBLISHES FINAL CYBERSECURITY RULE
The NYSDFS published a cybersecurity rule that goes into effect on March 1, 2017. However, some parts of the regulation phase in anywhere from 180 days to 2 years in the future. The rule impacts banks, insurance companies, and other financial services institutions regulated by the Department. To view the press release and link to the regulation, click HERE.
HUD Withdraws MIP Reduction
One hour after Donald Trump became President, the Department of Housing and Urban Development announced it has withdrawn the reduction of Mortgage Insurance Premiums, which would have been effective with closing/disbursements on or after January 27, 2017. HUD will issue a subsequent Mortgagee Letter at a later date, should there be a policy change.
NYDFS RELEASES FINAL RULE FOR
VACANT AND ABANDONED PROPERTY
On December 7, 2016 the New York State Department of Financial Services released the Final Rule pretaining to vacant and abandoned property. The legislation is effective on December 20, 2016. The New York Mortgage Bankers Association has performed a complete analysis of the changes in the Final Rule, as opposed to the Proposed Rule. The NYMBA Analysis, Proposed Rule and Final Rule can be obtained by clicking on the following links:
NY STATE LEGISLATURE
PASSES BILL TO ADDRESS
VACANT AND ABANDONED PROPERTIES
In the early morning hours Saturday, June 18, 2016, the NY State Legislature passed S8159, a bill that would require servicers to maintain vacant and abandoned property that they do not own, for the many years that a foreclosure takes in the state of New York. Federally and state chartered depositories are exempt from the requirement if they either originate, own, service, or maintain their mortgages, or a portion thereof; and have less than 3/10 of 1% of the total loans in the state which they either originate, own, service or maintain.
Lenders/servicers will be required to inspect properties within 90 days of delinquency to determine delinquency, and continue to inspect every 25-30 days. Within 7 days of determining the property is vacant, the lender/servicer must post a notice on the property stating that they are maintaining the property, and provide a phone number to call. If there is no response from the borrower within 7 calendar days of posting, the lender servicer must secure and begin maintaining the property. The lender/servicer may not remove any of the borrower’s personal property. There is a $500 per day fine for non-compliance.
The legislation also includes: a requirement to notify delinquent borrowers that they may stay in the property throughout the foreclosure process; a requirement for the NYSDFS to publish a Consumer Bill of Rights; a requirement for a lender/servicer who acquires a property through a judgment of foreclosure to place a property back on the market for sale within 180 days of the deed of sale or within 90 days of renovation of the property, whichever occurs first; extension of ” workout” options in the mandatory settlement conference; an expedited foreclosure process for vacant and abandoned property, if the borrowers fails to appear at the mandatory settlement conference; and technical changes to the STAR Personal Income Tax Credit.
For full text of the bill, click HERE.
NYS 2016 Budget Reinstates the
Refund of the
Special Additional Mortgage Recording Tax
On Friday evening, April 1, 2016 the New York State Budget was passed. The budget included the following language:
“Section 1. Paragraph (b) of subdivision 9 of section 210-B of the tax law, as added by section 17 of part A of chapter 59 of the laws of 2014, is amended to read as follows:
(b) Carryover or refund. In no event shall the credit herein provided for be allowed in an amount which will reduce the tax payable to less than the fixed dollar minimum amount prescribed in paragraph (d) of subdivision one of section two hundred ten of this article. If, however, the amount of credit allowable under this subdivision for any taxable year, including any credit carried over from a prior taxable year, reduces the tax to such amount or if the taxpayer otherwise pays tax based on the fixed dollar minimum amount, any amount of credit not deductible in such taxable year may be carried over to the following year or years and may be deducted from the taxpayer’s tax for such year or years. In lieu of carrying over to the following year or years, the unused portion of credits attributable to the special additional mortgage recording tax paid by the taxpayer as mortgagee with respect to mortgages of real property principally improved or to be improved by one or more structures containing in the aggregate not more than six residential dwelling units, each dwelling unit having its own separate cooking facilities, such taxpayer may elect to treat such unused portion as an overpayment of tax to be credited or refunded in accordance with the provisions of section ten hundred eighty-six of this chapter, except that no interest shall be paid on such overpayment.
- 2. This act shall take effect immediately and shall be deemed to have been in full force and effect on the same date and in the same manner as part A of chapter 59 of the laws of 2014, took effect.”
As previously reported, upon learning that the 2014 budget eliminated the refund, effective with the 2015 tax year, the NYMBA contacted the New York State Assembly and Senate; explaining the impact on non-depository lenders, and requesting a correction in the 2016 budget, retroactive back to January 1, 2015. In addition, we asked you to contact your legislators. As a result, there was bipartisan support in the NYS legislature for the correction, and it was added to both the Assembly and Senate One House bills, and inserted into the final bill, passed by both the Assembly and Senate. Our sincere thanks go out to all of you that assisted in this effort. Loss of the refund would have had a devastating impact on mortgage bankers doing business in the state of New York when filing their 2015 tax returns.