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Memos

Client Memo - Changes to Freddie Mac Selling Guide Regarding Powers of Attorney
MEMO: 03-17-21

On February 3, 2021, Freddie Mac issued Bulletin 2021-4, which announced new and updated requirements for the use of a power of attorney (“POA”). These changes are meant to serve as a “clarification” of the changes Freddie Mac previously announced on December 2, 2020 (Bulletin 2020-45). On March 3, 2021, Freddie Mac announced that these changes are effective for applications received on or after June 30, 2021.

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Client Memo - Texas Regulators Adopt Amendments to Home Equity Lending Provisions
MEMO: 01-20-21

Recently, the Finance Commission of Texas and the Texas Credit Union Commission (the “Commissions”) adopted several amendments to the home equity lending interpretations in the Texas Administrative Code. The amendments substantively addressed the following topics: (i) the repayment schedule of the loan and the ability to modify the loan post-closing; (ii) what constitutes a “state of emergency” under the exception to the one-year seasoning requirement; (iii) what areas at a proper location a loan may close at; (iv) when electronic copies of required documents can be provided to owners; and (v) when lenders may execute the acknowledgment of fair market value. The Commissions also made typographical corrections to two rules.

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Client Memo - Texas Mortgage License Renewals
MEMO: 12-1-20

Effective September 1, 2020 Texas Department of Savings and Mortgage Lending Director of Mortgage Examination, Tony Florence, also assumed the duties as Director of Licensing. Director Florence has already made several positive changes including adding additional licensing staff. Approximately 16,000 or 50% of all MLO’s have been already been approved for renewal during the first three weeks. This percentage is much higher compared to any prior year’s renewal rate.

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Client Memo - Proposed Rule Changes - Texas Department of Savings & Mortgage Lending
MEMO: 10-1-20

Texas law requires all State agencies to perform a rule review every four years. This process facilitates: elimination of unnecessary rules, needed clarifications, and reconciliation with either changes in current practices or changes in other sections of the law. The Texas Department of Savings and Mortgage Lending (SML) has completed their review of rules related to non-depository mortgage servicers, mortgage companies, mortgage bankers, and mortgage originators.

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Client Memo - Update: Fannie Mae and Freddie Mac Delays Implementation of New Adverse Market Refinance Fee
MEMO: 8-26-20

Last week we informed you of a new directive from Fannie Mae and Freddie Mac (collectively the “GSEs”) to charge an adverse market fee on refinance loans delivered to the GSEs on or after September 1, 2020. In response to the controversial announcement, the Mortgage Bankers Association’s grassroots advocacy arm, the Mortgage Action Alliance, issued a “Call to Action” and, in response, over 85,000 messages were delivered to Congressional leadership in opposition of the new fee. We are pleased to report that yesterday afternoon, the Federal Housing Finance Agency (“FHFA”) directed the GSEs to delay the implementation of the fee. The new effective date for the imposition of the Adverse Market Refinance Fee (“AMRF”) is now December 1, 2020.

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Client Memo - Fannie Mae and Freddie Mac Announce New Adverse Market Refinance Fee
MEMO: 8-18-20

On Wednesday, August 12, the Federal Housing Finance Agency (“FHFA”) announced that Fannie Mae and Freddie Mac (collectively the “GSEs”) will impose a 50-basis-point adverse market fee on refinance loans purchased by the GSEs. Effective for loans purchased by the agencies on or after September 1, 2020, the Adverse Market Refinance Fee (“AMRF”) will be assessed on cash-out and no cash-out refinances, with the exception of some construction-to-permanent mortgages.

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Client Memo - Regulatory Resources concerning Covid-19
MEMO: 7-23-20

State regulators have shifted to remote operations just like many financial service companies. This adjustment includes significant expansion of offsite examination procedures. Additionally, on behalf of state regulators, the Conference of State Bank Supervisors (CSBS) and NMLS have created a comprehensive online resources center for mortgage originators and their customers regarding Covid-19. Listed below are some of the most helpful links.

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Client Memo - The United States Supreme Court Holds that the President May Remove CFPB Director at Will
MEMO: 6-29-20

Today, the U.S. Supreme Court held that the President has the authority to remove the Director of the Consumer Financial Protection Bureau at will, but that the CFPB may otherwise continue operating. The 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act established the CFPB and set forth that it would be headed by a single director for a five-year term who may only be removed for “inefficiency, neglect of duty, or malfeasance in office.”

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Client Memo - EXTENSION OF Temporary Authorization of Remote Ink-Signed Notarization (RIN) for Texas Real Estate Closings
MEMO: 6-4-20

We want to inform you that the order of the Governor, which temporarily suspended the requirements of Texas Civil Practice and Remedies Code Section 121.006(c)(1) to permit that a notary to witness wet-signed documents in a real estate transaction by electronic means, which was originally set to expire on May 30, 2020, has now been extended until June 30, 2020, unless the state of emergency for COVID 19 is terminated sooner. This extension of the remote ink signed notary rules should provide greater flexibility for the notarization of documents in Texas in light of Covid 19 and the response to the pandemic.

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Client Memo - Equitable Subrogation A home equity lender’s salvatio
MEMO: 5-28-20

Equitable subrogation is an important legal principal under Texas law that allows a lender whose loan proceeds are used to pay off an existing lien to claim the lien priority of the lien being paid off by the new lender. In 2007, the Texas Supreme Court expressly held that common law subrogation applies in favor of a lender making a home equity loan made under Tex. Const. Art. XVI, Sec. 50(a).

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Client Memo - Temporary Authorization of Remote Ink-Signed Notarization for Texas Real Estate Closings
MEMO: 4-29-20

We want to inform you that Governor Abbott today issued a press release regarding an Order temporarily suspending the requirements of Texas Civil Practice and Remedies Code Section 121.006(c)(1), which contemplates that a notary witness a wet-signed document in person. This order of the governor is attached and should provide greater flexibility for the notarization of documents in Texas in light of Covid 19 and the response to the pandemic.

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Temporary Order Issued by Texas Governor Abbott

Client Memo - Regarding Temporary Suspension on Certain In Person Notary Acts
MEMO: 4-8-20

Please be advised that Governor Abbott issued a press release this afternoon which indicates he has temporarily suspended the statutory requirement that a person appear before a Texas notary for certain documents to be acknowledged. This directive specifically suspends the in-person acknowledgement requirement for execution of a durable power of attorney.

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Governor Abbott Temporarily Suspends Certain Statutes To Allow For Appearance Before Notary Public Via Videoconference

Client Memo - Regarding Fannie Mae Lender Letter LL-2020-03 Modifying Requirements for Use of POAs
MEMO: 4-3-20

We wanted to let you know that on March 31, 2020, Fannie Mae updated Lender Letter (LL-2020-03) to include new requirements and flexibility in the use of Powers of Attorney (“POA”) in purchase and limited cash-out refinance transactions. Fannie Mae originally issued the Lender Letter on March 23, 2020 to address industry questions and concerns due to COVID-19 (coronavirus). We recommend you review the entire Lender Letter as in addition to the new policies affecting POAs, it contains several new underwriting requirements, expands the permissible use of remote online notarization and addresses title policy concerns, among other issues.

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Fannie Mae Lender Letter - LL-2020-03


Fannie Mae Selling Guide - B8-5-05 - Requirements for use of POA

Client Memo - Regarding Finance Commission Agency Guidance on Coronavirus and Response thereto as it relates to Mortgage lending
MEMO: 4-1-20

We wanted to alert you to the attached informal guidance that has been issued by the Texas Finance Commission agencies, including the Texas Department of Banking, the Texas Department of Savings and Mortgage Lending, the Texas Office of Consumer Credit Commissioner, and the Texas Credit Union Department (the “Finance Commission Agencies”). The Finance Commission Agencies make clear this is INFORMAL GUIDANCE and reliance on such guidance does NOT provide any safe harbor to avoid potential civil litigation against any lender.

Please let us know if you have any questions regarding this information.

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Client Memo - Coronavirus and our service level commitment
MEMO: 3-16-20

As COVID-19 cases continue to increase and the public response and precautions become more pronounced, we wanted to take a moment to reassure you regarding the services our firm provides for you and our other clients. For many years, we have had technology and processes and procedures in place to allow most of our team members to work from home to better respond to our clients’ needs, subject to any client restrictions on the practice.

Please let us know if you have any questions regarding this information.

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Client Memo - I’M SUPPOSED TO DO WHAT FOR AN ASSUMPTION?
MEMO: 6-3-19

An assumption occurs when a creditor expressly agrees in writing with a subsequent consumer to accept that consumer as a primary obligor on an existing residential mortgage transaction. Before the assumption occurs, the creditor shall make new disclosures to the subsequent consumer, based on the remaining obligation. 12 C.F.R. § 1026.20(b).

Please let us know if you have any questions regarding this information.

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May 2019 Assumption clarification

Client Memo - Texas Title Insurance Guaranty Fee
MEMO: 4-9-19

As you may be aware, prior to January 1, 2019, there was a special Texas title fee called a Guaranty Fee that was collected on Texas title policies. This fee was collected on each Texas title policy and was placed into a fund that would then be available to subsidize the audit function of the title regulator and to compensate parties for certain losses on title policies where the title provider was otherwise unable to pay.

Please let us know if you have any questions regarding this information.

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Client Memo - New Requirements for VA Guaranteed or Insured Cash-Out Refinance Loans
MEMO: 2-14-19

This memo pertains to VA issued Circular 25-18-30 on December 17th summarizing the new rules for cash-out refinance loans (see link below). These requirements include new disclosures: “VA Type I Cash-Out Refinance, Fee Recoupment Certification” and “VA Type I/II Cash-Out Refinance, Net Tangible Benefit and Loan Comparison Disclosure”. Examples can be found at the link below.

Please let us know if you have any questions regarding this information.

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VA Circular 26-18-30


New VA Form Examples

Client Memo-Suspension of the Guaranty Assessment Recoupment Charge
MEMO: 12-31-18

This memo addresses the suspension of the Guaranty Assessment Recoupment Charge or GARC. This is a special fee that Texas title companies have been collecting for each title policy for Texas properties. Note that if loan documents are signed during 2018, but the loan does not fund until 2019, the fee is still required to be collected, as DOCUMENT SIGNING is the trigger for determining the date of the closing.

Please let us know if you have any questions regarding this information.

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Client Memo-Federal Agencies Limit Impact of Supervisory Guidance
MEMO: 9-13-18

The Federal Reserve Board, the Bureau of Consumer Financial Protection, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency issued a joint statement on September 11, 2018 stating that supervisory guidance does not have the force and effect of law, and the agencies do not take enforcement actions based on supervisory guidance. This pronouncement is a significant departure from the guidance of the agencies under the Obama administration, where both commentary and enforcement actions were deemed by certain of the agencies to be elevated to the force of law.

Please let us know if you have any questions regarding this information.

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Client Memo-Sunset Review for the Texas Department of Savings & Mortgage Lending : Update from the Hearing held May 24, 2018
MEMO: 5-29-18

As you may be aware, the Texas Department of Savings and Mortgage Lending (“SML”) is the subject of Sunset Review this year. The Texas Sunset Commission conducted their first hearing last Thursday, May 24th. Doug Foster, the former Commissioner of the SML and the Director of Regulatory Affairs for Polunsky Beitel Green, among others, testified before the Commission. This memo outlines the details of that hearing.

Please let us know if you have any questions regarding this information.

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Client Memo-Sunset Review for the Texas Department of Savings & Mortgage Lending
MEMO: 5-22-18

This is a Memo in regard to the Sunset Review of the Texas Department of Savings & Mortgage Lending. The Texas Sunset Commission has recently released its report, which recommends abolishing the Texas Department of Savings and Mortgage Lending (SML) and transferring its regulatory duties to the Texas Banking Department. The Sunset Commission has scheduled hearings for the Finance Commission of Texas and its agencies at 9:00am Thursday, May 24, 2018, in Room E2.030, Capital Extension, in Austin. This memo outlines the details of the process and the potential implications of eliminating this department.

Please let us know if you have any questions regarding this information.

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Client Memo-The CFPB Final Rule Addressing the Black Hole
MEMO: 5-2-18

Please be advised that the publication date in the Federal Register for the new TRID Final Rule addressing the “black hole” is May 2, 2018. The Black Hole refers to the inability, under the original TRID rule, for a Lender to reset tolerances with a Closing Disclosure, except during the four business days prior to closing.

Please let us know if you have any questions regarding this information.

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Client Memo-Texas Attorney General Opinion and Texas Home Equity Loans
MEMO: 3-14-18

This memo concerns the most recent Texas Attorney General Opinion issued on February 26, 2018 stating that the Texas Constitution, article XVI, subsection 50(a)(6)(H) prohibits a U.S. Department of Veterans Affairs cash-out refinance loan. The complete Attorney General Opinion and explanation has been included at the end of the Client Memo.

Please let us know if you have any questions regarding this information.

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Client Memo-Recent Proposed Interpretations Regarding Texas Home Equity Lending
MEMO: 3-9-18

We wish to advise you that the Texas Finance Commission has APPROVED adoption of certain interpretative guidance regarding home equity lending in Texas. This proposed guidance was also considered and approved for adoption when the Texas Credit Union Commission which met on March 9, 2018. The new interpretations should assist Texas mortgage lenders in more easily implementing the recently enacted changes to home equity lending in Texas.

Please let us know if you have any questions regarding this information.

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Texas Finance Commission adopts Norwood Amendments
MEMO: 01-05-15

As you are probably aware, on January 31, 2014, the Texas Supreme Court issued its supplemental decision in The Finance Commission of Texas, et al v. Valerie Norwood, et al, and held that, in the context of a transaction originated under Article XVI, Section 50a6 of the Texas Constitution (a “Texas Home Equity Loan”) both pre-paid per diem interest and bona fide discount points are “interest” and are NOT fees “necessary to originate, evaluate, maintain, record, insure, or service” the loan and are therefore NOT subject to the 3% fee cap applicable to a Texas Home Equity Loan.

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Memo Regarding Finance Commission Meeting (Norwood Amendments)
MEMO: 06-19-14

As you are probably aware, on January 31, 2014, the Texas Supreme Court issued its supplemental decision in The Finance Commission of Texas, et al v. Valerie Norwood, et al, and held that, in the context of a transaction originated under Article XVI, Section 50a6 of the Texas Constitution (a “Texas Home Equity Loan”) both pre-paid per diem interest and bona fide discount points are “interest” and are NOT fees “necessary to originate, evaluate, maintain, record, insure, or service” the loan and are therefore NOT subject to the 3% fee cap applicable to a Texas Home Equity Loan.

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Texas Supreme Court Decision - Sims v. Carrington Mortgage Services
MEMO: 05-16-14

Today the Texas Supreme Court rendered its Opinion in Sims v. Carrington Mortgage Services. In this case, the United States Court of Appeals for the Fifth Circuit certified the four questions to the Texas Supreme Court regarding whether a particular transaction of a Texas home equity loan is a modification or a refinance for home equity purposes.

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New TDSML Commissioner Announced
MEMO: 04-23-14

Bill White, Chair of the Texas Finance Commission, announced on Tuesday, April 22nd that Caroline Jones has been selected as the new Commissioner of the Texas Department of Savings & Mortgage Lending. Ms. Jones appointment will be effective as of June 1st

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Memo Regarding Dallas Court of Appeals decision (Wells Fargo v Leath)
MEMO: 02-12-14

We wanted to take a minute to advise you of a recent decision of the Dallas Court of Appeals relating to a Texas home equity loan. In Wells Fargo Bank, N.A., as Trustee for Option One Mortgage Loan Trust 2006-1 Asset-Backed Certificates, Series 2006-1 v. Lonzie Leath, the borrower, Mr. Leath, had sought to invalidate a home equity loan on the grounds that the loan exceeded 80% of the fair market value of the property, which as you probably know is the limit imposed by Article XVI, Section 50(a)(6)(B) of the Texas Constitution.

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TX Home Equity - Norwood case follow up
MEMO: 01-31-14

The case challenged the promulgated interpretative rules of the Finance Commission dealing with certain provisions of the Texas home equity lending requirements of Texas Constitution, Article XVI, Section 50, Subsections (a)(6)(E) and (a)(6)(N).

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