A key component of The Housing and Economic Recovery Act of 2008, the SAFE Act was signed into law on July 30, 2008 and is one of the most far-reaching Acts in recent times. The SAFE Act encourages states to establish minimum standards for licensing and registration of loan originators in an effort to enhance consumer protection, increase integrity in the residential mortgage market, and reduce fraud. The SAFE Act also encourages states to participate in the Nationwide Mortgage Licensing System and Registry, and requires states to have in place, a system for licensing and registering loan originators that meets certain requirements.

Several of the objectives of the Nationwide Mortgage Licensing System and Registry are as follows:

• •Provide uniform license applications and reporting requirements for state licensed-loan originators
• •Provide a comprehensive licensing and supervisory database
• •Provide increased accountability and tracking of loan originators
• •Streamline the licensing process and reducing regulatory burden, and
• •Enhance consumer protections and support anti-fraud measures.

In addition, the Nationwide Registry hopes to provide consumers with easily accessible information and establish a means by which residential mortgage loan originators would be required to act in the best interests of the consumer.

loanDepot is committed to staying at the forefront of federally and state mandated changes that affect how lenders conduct business. We are able to adapt quickly to new requirements to ensure we are 100% compliant with the regulatory agencies. loanDepot requires every mortgage banker and home buying specialist to be SAFE Act licensed and registered and has established measures that ensure that all other state and federal requirements are met as they get signed into law. We are highly supportive of our government’s efforts to protect consumers and reduce fraud in the mortgage industry and we are doing our part to put transparency back into lending.

If you have further questions about the SAFE Act, please feel free to contact us at 1-888-337-6888 and ask for our legal department.

The APR or annual percentage rate is designed to help customers compare mortgages across different programs and lenders. The Federal Truth in Lending law requires mortgage companies to list the APR of their loans. The APR expresses the annual cost of a loan by factoring other fees associated with the loan aside from just the interest rate that your payments are based on. The other items included in an APR calculation are the points, most of the loan fees, pre-paid mortgage interest, and mortgage insurance (if applicable). It does not factor in items such as title insurance and appraisals.

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APR is not an exact science because the calculation varies lender by lender and other things such as the exact closing date affect the APR. What is important to note is that your monthly payments are based on the interest rate (the Note rate), not the APR so when shopping for a mortgage, be sure to look at the interest rate, the points, and the closing fees to get an overall picture of what your loan will cost. If you need help comparing different loan programs, please call and speak with one of our mortgage experts. We will give you an accurate assessment of each loan that you are considering and help you compare different options.

One point is the equivalent of 1% of your new loan amount and is paid to lower your interest rate. For example, one point on a $100,000 loan is $1000. One point on a $250,000 loan is $2500. If you are refinancing and have enough equity in your home, you can finance any points (and closing fees) into your new loan by increasing the loan amount. If you are purchasing a home, you would need to pay the points up front with your down payment, closing fees, and other fees necessary to close your loan. Whether or not it makes sense to pay points depends on your unique situation. If you can lower your rate and payment significantly by paying a point or two, it may be a good investment over the long run. You can calculate your breakeven point to get a mathematical look at whether or not it makes sense. Call and speak with one of our mortgage bankers to help you determine your breakeven point.

PMI is usually required for any loan that exceeds 80% of the value of your home. This is a standard Fannie Mae and Freddie Mac guideline, although there are programs available that do not require PMI. Call and speak with a mortgage banker to discuss your options.

There are programs available that allow more flexibility in income and credit. Call and speak with one of our mortgage bankers to discuss your unique situation.