How Regulations X and Z Impact Real Estate Attorneys

Regulations X and Z have been used to implement the Real Estate Settlement Procedures Act and the Truth in Lending Act for decades. In 2010, the Dodd-Frank Act amended those rules, specifically the rules on the servicers’ obligations. In this post, we’ll take a look at Regulations X and Z separately to highlight these changes.

Regulation X

Regulation X implements the Real Estate Settlement Procedures Act of 1974 (RESPA). The Dodd-Frank changes specifically:

  1. Addresses the servicer’s obligations to correct errors asserted by borrowers.
  2. Provide certain information requested by borrowers, and provide protections to such borrowers in connection with force-placed insurance.
  3.  Loan providers are obligated to establish reasonable policies and procedures to achieve delineated objectives, and provide information about loss mitigation options to delinquent borrowers.
  4. Establish policies and procedures for providing delinquent borrowers with continuity of contact with servicer personnel.
  5.  Requires servicers to evaluate borrowers’ applications for available loss mitigation options.

Regulation Z

Regulation Z implements the Truth in Lending Act (TILA) and the official interpretation to the regulation. The Dodd-Frank Act impacts are as follows:

  1. Requires lenders to disclose all terms of a loan to potential borrowers, including interest rates, fees and length of loans.
  2. Allows consumers to cancel credit transactions requiring a lien to be placed on the borrower’s primary residence.
  3. Requires servicer to provide periodic statements for residential mortgage loans.
  4. Requires servicers to promptly credit mortgage payments.
  5. Requires servicers to respond to requests for payoff amounts.

Regulation Z is sometimes construed as the implementation of TILA because it amended the rules governing the scope, timing, content, and format of disclosures to consumers regarding interest rate adjustments to variable-rate transactions.

How The Regulations Affect Real Estate Attorneys

Regulations X and Z impact the servicers of mortgages and home loans – banks and lenders. Real estate attorneys are affected in two ways:

  1. Initial Closing Disclosures and Loan Estimates. If you are facilitating the closing or reviewing the documents for your client before the closing, pay special attention to the Closing Disclosure Forms and Loan Estimates. TRID is supposed to make the loan terms and related costs more transparent for consumers. Make sure the documents are in order and that your client understands their obligations under the loan terms. Attorneys can also ensure compliance with the new timing requirements, particularly if they are managing the closing themselves instead of outsourcing it to a title agency.
  2. Servicing Clients. Attorneys can help ensure compliance with these rules on behalf of their clients. If clients come to you complaining of the service they have received on their mortgage or with an inability to pay their mortgage, refer to the initial loan documentation and make sure all of the regulations were followed.

Creditors must take into account a borrower’s ability to repay the loan and must be upfront about rate changes, particularly where ARMs are concerned. They must also provide opportunities for pre-payment without assessing penalties.

The final rule requires creditors to retain evidence of compliance with the rule for three years after a loan is consummated. If your client approaches you with concerns after this time period, you may want to take a close look at how the mortgage has been handled recently.

To learn more about TRID and staying in compliance with the new rules, contact Easy Soft and find out about how our real estate closing software for attorneys can help you through the new law changes.

Posted by Amy Prokop on in HUD Software | Leave a comment

Use Easy HUD and EasyCDF Simultaneously to Stay Compliant

Choosing the right real estate closing software can be confusing. There are many variables to consider depending on the type of and how many closings you manage each year. Not to mention your own firm and staff capabilities. Easy Soft has made it easy on you by combining all of the real estate forms and documents you need into one simple suite: the EasyRealEstate Suite.

EasyRealEstate Suite: Your All-in-One Solution

Easy HUD and EasyCDF are both excellent, stand-alone products that support critical components of a real estate closing, but they support different components as well as different types of closings. Where Easy HUD supplies you with all of the settlement forms you need, EasyCDF ensures compliance with the latest CFPB rules by providing you with the new closing disclosure forms.

Both programs reduce closing times, auto-fill and auto-calculate for you but they will be used for different types of transactions. Even after TRID goes into effect this October, EasyHUD will still be needed for closings requiring a HUD-1 statement. These include:

  • Home equity revolving lines of credit
  • Reverse mortgages
  • Mortgages secured by a mobile home
  • No-interest second mortgages

EasyCDF, by comparison, is better suited to traditional consumer mortgages. This software also ensures your compliance with TRID and makes it safe to submit data electronically thanks to MISMO-compliant programming.

But there’s more to a managing a real estate closing than submitting the right forms. That’s why we’ve added Real Estate Documents and Easy Amortization software to the Suite. Real Estate Documents serves as the database of your transactions, centralizing data entry. Over 200 of the most common real estate closing forms are available in the software library. Data can be entered in one central location and then used to auto-fill closing forms for error-free closings.

Amortization schedules are some of the most time-consuming forms needed for a closing. Easy Amortization drastically cuts down on the amount of time it takes to generate these statements, edit them, and customize them with one click. Save the files in a variety of formats and send it off to keep the closing process moving along.

Software When You Need It

Still not sure you need the full suite? That is not a problem at Easy Soft. You can easily download just the products you need, but still have access to the entire EasyRealEstate suite with your subscription. The cost for all four software programs starts at just $49 per user per month, making this peace of mind extremely affordable. Your EasyRealEstate Suite subscription will ensure 100% compliance with TRID, streamline the closing process, and provide you with all the software you need in one easy-to-use package.

The EasyRealEstate suite is available in desktop and cloud versions and comes with an unconditional, 30-day money-back guarantee and unlimited, live-by-phone technical support valid as long as the subscription is active.

Contact Easy Soft today at 1-800-905-7638 to learn more about our EasyRealEstate Suite and how it can help your firm manage real estate closings in-house.

 

Posted by Amy Prokop on in HUD Software | Comments Off

6 Pieces of Information That Are Required on a Loan Application

A mortgage is a huge financial investment for the average person. The sheer amount of money that is being requested forces lenders to take a close look at the borrower before they will loan the money. But before lenders will even consider a loan application, they require six key pieces of information. Forget even one of these on a loan application and it will be rejected. This can have serious consequences for borrowers who may be trying to lock in to a low interest rate or who have found their dream home and are ready to buy it before they miss their chance.

Savvy real estate attorneys can help their clients avoid these situations by always making sure each of the following is included with every mortgage application they process.

Six Key Pieces of Information That Are Required on Every Loan Application

  1.    Consumer’s Name.
  2.    Monthly Income.
  3.    Social Security Number.
  4.    The Property Address.
  5.    An Estimate of the Value of the Property.
  6.    The Loan Amount.

If any single piece of the above information is not included the application will not be considered valid and will not be submitted for processing. Although these are the primary pieces of information that a lender needs in order to start the loan application process, it does not mean they are the only pieces of information needed. Lenders may require additional data, depending on the specific circumstances surrounding the borrowers and the loan.

Once these pieces of information have been obtained, lenders are required to provide a Loan Estimate. The Loan Estimate provides borrowers with a summary of the loan terms, estimated loan and closing costs, and additional application disclosures. Although they do not specify the final terms of the transaction, they do provide borrowers with a realistic estimate of closing costs, payment terms, and the loan structure.

Applications can be submitted in writing, electronically, or orally. If submitted orally, a written record of the event must be included. Once all six pieces of information have been received, an official Loan Estimate must be provided to the borrower within 3 business days, per CFPB rules. To proceed with the transaction, the borrower must sign and return the forms to the lender.

Don’t Miss A Step With EasyRealEstate Suite From Easy Soft

Attorneys will never miss a critical piece of information that could derail the entire mortgage process when they use Easy Soft’s EasyRealEstate Suite. The suite is MISMO compliant, which means loan estimate data is exported and imported safely (encrypted) into case data fields. The entire suite consists of: EasyCDF, EasyHUD, Real Estate Documents, and Easy Amortization, which includes all the software needed to manage a real estate law practice virtually error-free.

EasyRealEstate Suite starts at just $49 per user per month, billed annually and is 100% compliant with the CFPB’s TILA-RESPA reporting requirements. To learn more about EasyRealEstate Suite, visit Easy Soft at www.easysoft-usa.com. For more information about TILA-RESPA and TRID, we invite you to visit our blog.

Posted by Amy Prokop on in Other | Comments Off

Lifestyle Analysis: Is Hiring a Forensic Accountant My Only Option?

Financial disclosure is required early on in a divorce in order to be able to divide all assets accordingly. When alimony is in question, it’s not unusual for a forensic accountant to be hired to complete a Lifestyle Analysis. Particularly in high net worth divorce cases, it can be difficult to ascertain the volume of data regarding the financial details. The accountant’s Lifestyle Analysis reviews all accounts and statements, looks at spending and makes adjustments for seasonal expenses. Forensic accountants might also uncover hidden assets.

Unsurprisingly, this service comes at a high cost. Divorce attorneys may end up paying for this specialist themselves, or the accountant’s fees might be added into the cost of the divorce services and paid by the clients. Either way, it is an added expense that most people would prefer to avoid.

Until recently, attorneys did not have much choice if they needed a Lifestyle Analysis. Now, thanks to EasySoft’s Divorce Financials legal software, law firms can develop Lifestyle Analyses in-house, saving their clients time and money.

You Don’t Need to be a Financial Expert With Divorce Financials to Assist You

Attorneys are trained in the law, not finance, yet both come in to play during a divorce. There’s a lot at stake when calculating the financial impact of a divorce. Without a pre-nuptial agreement to serve as a guide or in cases of high net worth divorces, calculating these impacts can be intimidating and causes many attorneys to call in an accountant for assistance.

If you don’t like the thought of hiring accountants every time you need financial expertise during a divorce case, know that there is another way. EasySoft’s Divorce Financials manages the financial process of a divorce for you, helping to analyze data and calculate settlements quickly and accurately….without the need for an accounting background. Using Divorce Financials, you can conduct a Lifestyle Analysis, analyze and compute alimony, child support, and even monthly expenses yourself.

Divorce Financials Lifestyle Analysis feature analyzes the payer’s ability to pay and the recipient’s needs based on his or her current lifestyle. Using bank and credit card statements, the software can compute, with 100% accuracy, the alimony needed to sustain the recipient’s current lifestyle.

As long as you have all of the necessary documentation, your own paralegals can prepare a lifestyle analysis comparable to one a forensic accountant would prepare. The major advantages of this are:

  1.  Saving money by not having to outsource this aspect of the divorce process.
  2.  Saving time over having to coordinate with a forensic accountant to obtain the analysis.

 Order a Risk-Free Trial Today!

Divorce Financials is made especially for family law attorneys who want to offer as many services as they can to their clients without outsourcing the work. The integrated tools and features allow attorneys to provide comprehensive, accurate service and financial analysis that might otherwise be provided by a forensic accountant.

To get a better idea of the capabilities of Divorce Financials or our entire suite of family law software, download a free trial risk-free for 30-days or contact Easy Soft at 1-800-905-7638.

 

Posted by Amy Prokop on in Other | Comments Off

CFPB Finalizes TRID Implementation Date of October 3, 2015

After months of waiting, mortgage lenders and banks have their answer. The TRID effective date has been officially moved back to October 3, 2015. That is the CFPB’s final rule for the “Know Before You Owe” mortgage disclosure rule, also known as TILA-RESPA or TRID.

As early as June 24, 2015, the CFPB indicated it would push implementation back from August 1st to October. The August date came under heavy fire from the mortgage industry and Congress, however, the CFPB claims that did not completely influence the date change.

Delayed Implementation Benefits Consumers and Mortgage Industry

The CFPB has said that it believes the revised effective date will “benefit both industry and consumers with a smoother transition to the new rule.” The extra two months gives lenders and agents more time to ensure compliance with the law when October arrives. October 3rd is a Saturday. This day of the week was chosen specifically for the additional time it provides companies to finalize system changes and office procedures. There should be no reason for lenders or closing agents to interrupt business transactions as they make the change, since the date falls on a Saturday.

Consumers benefit from the extension because their mortgage lenders and settlement agents will presumably be more prepared for the change and able to process transactions with minimal delays. Of course, the entire push behind TRID is to benefit consumers by making the mortgage process more transparent. Anytime lenders can process documents more efficiently and explain the process to their customers, is a benefit to consumers.

Get Ready For TRID Well Before October With Help From Easy Soft

Now that there is a firm and final date to work with, lenders, closing agents, and real estate attorneys can plan how they will comply with the law. One of the easiest ways to ensure compliance with TRID is to use Easy Soft’s new EasyCDF software.

As soon as Easy Soft heard about the CFPB TILA-RESPA changes, we got to work updating our real estate closing software, EasyHUD. The result is a completely new software called EasyCDF. EasyCDF has been in design for months and was all ready to go in time for the August 1 implementation date. Now that the deadline has been pushed back, users have even more time to install the software and learn its features before they need to start using it in earnest.

Even though you won’t be required to use the new Loan Estimate and Closing Disclosure forms until October, there is absolutely no reason you can’t learn the software right now! EasyCDF is ready to go and available for purchase now; you can even work through some mock closings to see the software in action so you will be prepared for the October deadline.

Contact Easy Soft at 1-800-905-7638 to place an order or to arrange a free 30-day trial of EasyCDF.

Posted by Amy Prokop on in HUD Software | Comments Off

7 Requirements for Alimony Payments to be Tax-Deductible

Alimony can be a contentious issue in any divorce case. Careful planning and negotiation is often required to come to an agreement that at least meets the lower-earning spouses needs, if not satisfy both spouses. But determining alimony is much more complex than just figuring out how much money the higher-earning spouse should provide to the lower-earning spouse.

Tax Implications Of Alimony

The tax implications of alimony are one of these complexities. This is an area that requires careful planning since the alimony payment and how it is provided directly impacts the tax burden of both spouses. In fact, if the alimony is planned right, both spouses may realize tax savings.

How? The IRS allows the paying spouse to deduct alimony payments as long as the receiving spouse reports the alimony as income. Since alimony usually results in shifting the income from a higher bracket to a lower one, both spouses may see tax savings. In fact, sometimes the payer can be persuaded to be more generous with their alimony payment amounts simply because of the tax savings.

Tax deductions for alimony aren’t automatic, though. Spouses need to make choices that ensure the payments are tax deductible. In some cases, it may be more favorable from a tax perspective for the payments to be non-deductible and non-taxable. It all depends on the couple’s current financial situation. Below, we’ve outlined 7 situations where alimony payments can be deducted so you can guide your clients through the decision-making process.

7 Requirements To Meet For Alimony Payments To Be Tax-Deductible

Like most tax situations, the IRS has rules that must be followed in order for alimony to be considered tax-deductible. Payments are considered alimony if:

  1.    Payments are not classified as property settlement or child support. Take care not to classify payments as child support or part of the property settlement. Neither is tax-deductible. If you want alimony to be deductible make sure it is in no way connected to the children or as part of your marital property.
  2.    Payments are made in cash (this includes checks or money orders). In-kind alimony is not tax-deductible so if you want to deduct alimony from taxes, make sure the payer makes payments by cash or check.
  3.    Payments are received by the current or former spouse and no one else. Not the kids, not a bill collector, not a mortgage company, for example.
  4.    The spouses do not file taxes jointly.
  5.    The agreed upon separation (legal separation or divorce) agreement does not say that the payment is not alimony.
  6.    Payments stop upon the recipient’s death. The settlement agreement or judgment must specify that alimony payments terminate when the recipient dies.
  7.    Spouses are not living with one another. Spouses must live physically separate in order for alimony payments to be tax deductible.

Optimize Alimony Payments for Taxes With Divorce Financials From Easy Soft

Verify the deductibility of alimony and analyze the tax implications of the settlement with Divorce Financials from Easy Soft. This one software system can handle all of your divorce-planning needs and help you produce tax-optimized divorce settlements. Quick and accurate calculations make it possible for you to run through several different alimony scenarios to determine the single best settlement arrangement for your clients.

It’s like having your own accountant in-house!

Divorce Financials software licenses start at just $49 Per User Per Month (Billed Annually) and are available in both desktop and cloud versions. Easy Soft offers a 30-day money-back guarantee and live technical support for one year from the date of purchase.

Learn more about Divorce Financials or arrange a free trial by contacting Easy Soft at 1-800-905-7638.

Posted by Amy Prokop on in Divorce Financials | Comments Off