OUTSIDE OF DODD-FRANK (“ODF”)

THE DODD-FRANK ACT

Formally termed the Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into federal law by President Barack Obama on July 21, 2010 at the Ronald Reagan Building in Washington, D.C. It passed as a response to the Great Recession that formally started in 2008. It brought the most significant changes to financial regulation in the United States since the regulatory reform that followed the Great Depression. It made changes in the American financial regulatory environment that affect all federal financial regulatory agencies and almost every part of the nation’s financial services industry. Of primary concern to mortgage lenders are the provisions of Title XIV, all of which are part of the “Mortgage Reform and Anti-Predatory Lending Act including Subtitles A through F as well as sections 1032(f), 1076, 1083, 1094, 1098, and 1100A.

LAWS COVERED BY THE DODD-FRANK ACT (“DFA”)

There are eighteen (18) separate laws amended by the DFA. Those that have
significant impact on the mortgage lending community are:
• Truth In Lending Act (“TILA)
• Real Estate Settlement and Procedures Act (RESPA)
• Equal Credit Opportunity Act (ECOA & Reg. B)
• Fair Credit Reporting Act (FCRA)
• Home Owners Protection Act
• Fair Debt Collection Practices Act (FDCPA)
• Gram-Leach-Bliley Act (selected sections)
• Secure & Fair Enforcement for Mortgage Lending Act (S.A.F.E.)
• Home Ownership & Equity Protection Act

OUTSIDE DODD-FRANK (ODF) PURPOSE

Normally a consumer credit transaction will be subject to the provisions of the Federal Truth in Lending Act (“TILA”), Regulation “Z”, the Real Estate Settlement Procedures Act (“RESPA”), and Regulation “X”. However, TILA and Reg “Z” provided a number of exemptions for:
• Business Purpose Exemption;
• Credit Extension to Acquire, Improve, or Maintain Single Family Rental Property;
• Credit Extension to Acquire, Improve, or Maintain Owner Occupied Rental Properties of Two (2) or More Units;
• Credit Extension to Foreign National Borrowers;
• Loans on Properties of Twenty-Five (25) Acres or More; and / or
• Cross-Collateralized Properties With One Being Owner Occupied.
The mission of the ODF Loan Program is to provide financing to loan requests on a stated income with verified assets loan request under certain terms and conditions.  Additionally, the ODF Lending Program on case-by-case basis is designed to address any lending opportunities that do not conform to Non-Prime Guidelines (NPG). Among those opportunities will be loan requests for Ability-toRepay (ATR) complaint loans such as:
• Property listed for sale currently or in the very recent past;
• Borrower’s with insufficient credit depth;
• Properties that are in need of repairs but are not subject to withhold of funds to make such improvements; or
• Any other request of a nature that does not conform to NPG but has merit.