Loan Originator Compensation KNOWLEDGE. CLARITY. RELIABILITY. www.compliancealliance.com (888) 353-3933

Agenda Scope Definition Compensation Recordkeeping LO Qualifications NMLS ID use Policies and Procedures Arbitration & Waivers Financing of Credit Insurance

Scope LO Compensation Yes No Payment Processing & Late Fees Rule Closed-End Loans Open-End Loan LO Compensation Yes No Payment Processing & Late Fees Yes – if principal Payoff Statements LO Qualifications NMLS ID Requirement Policies & Procedures Arbitration Clauses Credit Insurance Practices

Loan origination Application Assists applicants Advertising

Prohibited Compensation Terms Proxy of terms Steering Double Payments

Terms Interest APR Type of collateral Prepayment Penalty

Secondary Market  Varies with term Add, drop or change? Proxy Varies with term Add, drop or change? Secondary Market  Adjustable Rate

Allowable Compensation Qualified Tax Advantage Plan 10% Rule Flat Compensation

Scenarios 1-4 PGS. 5-6

Qualifications Registered under Safe Act Required training Background Check Credit Report No breach of trusts violations Financial Responsibility

NMLSR ID Disclosure Application Note Security Agreement

Scenario 5 Pg.8

No Arbitration Requirement No Waiver of Federal Law

Credit insurance Prohibition Cannot Finance Credit Life Disability Unemployment HELOCs

Compensation Agreements Record Retention Compensation Records Compensation Agreements Three years

SAFE Act & Regulation G KNOWLEDGE. CLARITY. RELIABILITY. www.compliancealliance.com (888) 353-3933

Agenda Reg G vs. Reg H Scope MLO Registration Policies and Procedures Unique ID Penalties

Regulation G & H Regulation G Federal Regulated Banks Employees Registered Regulation H State Non-Banks Licensed

Scope Consumer-purpose Dwelling Secured Mortgages HELOCs Reverse Mortgages Refis

Mortgage loan Originator Takes Application Offers/Negotiates Terms

MLO Exclusions 5 or Fewer Clerical Licensed Broker Timeshare

Registration Required prior to work Cannot evade

Registration Information Identifying Info Employment History Convictions Civil Actions Agency orders Fingerprints Authorization

Renewal Required Annual Update in 30 days

Change in Status New Employee Update Information Prior to work Merger Update in 60 days

Bank Registration Identifying Info EIN RSSD Regulator Contact Subsidiary?

Annual independent testing Policies & Procedures Identify MLOs Train Procedure for MLO # Accurate Info Annual independent testing Track & Monitor EEs who fail to comply? Background Checks Third parties

NMLS/MLO/Unique ID # Upon Request Before MLO action Regulation Z? Initial written Regulation Z?

Penalties Civil Penalties $25,000

Scenarios 1-3 PGS. 5-6