Essentially the
SAFE act and the new laws are all about Suitability for the client. As we say, Eligibility and Suitability are converging. You'll want to begin to think about how you clearly show that your recommendation meets the new standards of the four primary rules
to bring value to your client.
Download FedsNewRulesOctober09
Sec. 202. Net tangible benefit for refinancing of
residential mortgage loans.
No
creditor may extend credit for refinancing unless the creditor reasonably and
in good faith
determines, at the time the loan is consummated and on the basis of information
known by or
obtained in good faith by the creditor, that the refinanced loan will provide a
net tangible benefit
to the consumer. The refinanced loan will not be considered to provide net
tangible benefit
if the costs of the loan, including points, fees, and other charges, exceed the
amount of newly
advanced principal without any corresponding changes in the terms of the
refinanced loan that
are advantageous to the consumer. The Federal banking agencies will jointly
prescribe regulations
further defining the term “net tangible benefit.”
Special thanks to: Dave Hershman
