10 Hour SAFE PE Elective Set (Includes NV State Law)

Summary

This course covers Nevada relevant to Mortgage Loan Originators (MLOs).  The course is designed to help you understand the specifics of Nevada law and assist you in preparing for the licensing exam.  We will provide you with references as to where to find more details on pertinent parts of the law. 

The course is divided into Three chapters: 

Nevada State Law

Federal Law-Credit and Information

Non-traditional Mortgages Fixed Rate Products

Nevada State Law has six sections:

•  State Regulatory Agency - Covers the Regulatory authority, structure, and responsibilities and limitations of the Nevada Financial Institutions Division.

•  State Law and Regulation Definitions – Summarizes the intent and purpose of each law, and provides a review of the unique definitions found therein.

•  License Law and Regulations – Covers persons required to be licensed, licensee qualifications and the application process, the grounds for denying a license and license maintenance.

•  Compliance – Details prohibited conduct and practices, required conduct, fees and charges, disclosures and agreements and advertising Disciplinary action – Discusses notifications, hearings and appeals, then suspension, revocation and rescission of licenses, and finally, penalties/fines and civil and criminal liability

•   Nevada Unique State Laws – Discusses unique laws in Nevada regarding Loan Modification.

Federal Law-Credit and information has Five sections

• ECOA -- Equal Credit Opportunity Act (enacted in 1974, implemented by Reg B)  Prohibits discrimination against mortgage applicants based on race, color, religion, national origin, age, and whether they were recipients of welfare.

• FCRA & FACTA – Fair Credit Reporting Act and its recent amendment FACTA (enacted in years 1970 and 2003, respectively). Addressed proper procedures for lenders to retrieve, evaluate, store and dispose of mortgage applicant credit information.

• Red Flag Rules (enacted in 2004 as an amendment to FCRA/FACTA) Established standards for financial institutions to implement in order to prevent identity theft

• HMDA – Home Mortgage Disclosure Act (enacted in 1975, implemented by Reg C – 12 CFR 1003) Established requirements for lenders to submit a mortgage applicant’s data to the government

• DNCIA – Do Not Call Implementation Act (enacted year 2003) Established a do-not-call directory. Prohibits sellers and telemarketers from contacting consumers who register their telephone numbers on the National Do-Not-Call registry.

Non-traditional mortgage is built into six chapters.  The mortgage types we will talk about include Buydowns, Construction permanent mortgages, Balloons, HELOCs and Reverse Mortgages.

• Chapter 1.  Introduction to non-traditional variants of fixed rate mortgages
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• Chapter 2.  Buydown mortgage
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• Chapter 3.  Balloon mortgage
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• Chapter 4.  Second Liens and HELOCs
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• Chapter 5.  Construction Loans
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• Chapter 6.  Reverse Mortgages

Learning Objectives

Upon successful completion of this course you will have a strong understanding of several of the laws and regulations specific to mortgage loan originators and lenders in the state of Nevada.  Specifically, you will understand the following:

NV State Law

• Licensing and Operation of Mortgage Brokers and Bankers
• Licensing and Regulation of Mortgage Agents, Mortgage Servicers and Supplemental Mortgage Servicers
• General Provisions of the Commissioner’s Supervision
• Examinations and Audits
• Required Records, Financial Statements and Reports
• Net Worth and Surety Bond Requirements
• Escrow and Trust Accounts
• Disclosures and Advertising
• Conditions and Limitations of Certain Mortgage Transactions
• Residential Mortgage Loans
• Investigation of Violations and Unsafe Practices; Remedial Action and Enforcement
• Prohibited Acts, Disciplinary and Other Actions

Federal Law:

Upon successful completion of this course you will have a good understanding of ECOA, FCRA (and key amendments) and HMDA.  You will have an understanding of a couple of key forms, the Adverse Action Notice and the Credit Score Disclosure Notice, the information that needs to be communicated for HMDA purposes and the basics of what Red Flag Rules to look for.  You should also be able to articulate the reasons these laws exist from a consumer protection standpoint.  Specifically, you will:

• Understand ECOA as it applicable to mortgage industry, including the Taking, Evaluation and Extension of Applications as well as the Adverse Action Notice
• Understand FCRA as it applicable to mortgage industry, including the FCRA Adverse Action Notice, record keeping requirements, the Credit Score Disclosure and limitations regarding High Interest Loans

Non-Traditional Mortgages:

Upon successful completion of this course you will have a review of various non-traditional mortgage products that generally carry a fixed-rate.   You will have insight into the risks and considerations for each product.

• Learn how to use the fully amortizing payment to calculate the interest and the principal amounts paid on a fixed rate loan.
• Be able to calculate the cost of both a temporary buy down and a permanent buy down, initially as well as over the term of the loan.
• Learn how to apply the Ability to Repay standards to qualify a balloon mortgage.
• Be able to quantify the risks and benefits of an equity line or fixed rate second mortgage.
• Learn to use the piggyback mortgage scenario to layer financing and avoid PMI.
• Be able to explain to the borrower how layered financing will affect their loan vs one loan with PMI.
• Learn to identify the terms of a construction loan and explain to the borrower.
• Learn the differences between a forward mortgage and a reverse mortgage.
• Identify who is eligible for a reverse mortgage based on HECM guidelines.
• Learn to explain the risks and rewards of the reverse mortgage to a borrower.
• Understand the different disbursement options and how they affect the reverse mortgage.