This course covers SAFE Continuing Education Requirements for any state that does not require a state law course or a number of hours above 8. Specifically, this course includes:
- 2 Hours on Nontraditional Mortgages
- 2 Hours on Ethics
- 3 Hours on Federal Law and Regulations
- 1 hour of elective education.
Section One: 2 Hours on 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.
Section Two: 2 Hours on Ethics, Fair Lending and Fraud – Moving Forward
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
Section Three: 3 Hours on 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.
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.
Section Four: 1 Hour of Elective Education on 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.
- 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