Data Facts Blog


A HReal HRisk HR can help HReduce | BCP Business Center

By Lesley Fair

Data Privacy DayToday is Data Privacy Day. You’ve educated your staff about limiting access to sensitive information, locking up confidential paperwork, and securing the network. But Latanya Sweeney, the FTC’s new Chief Technologist, just clued us in about a potential security vulnerability you, your HR team, and your web master can do something right now to correct.

It can happen on any site, but it’s common for universities, research institutions, non-profit organizations, and even tech companies to include links to the CVs of professors, scientists, executives, and other staff. For the most part, those resumes list scholarly publications and academic interests. But scroll through all that high-minded content and you may get to the down-and-dirty stuff identity thieves live for: dates of birth, home addresses, and even Social Security numbers.

On this topic – and a whole lot of others – when Latanya Sweeney talks, we listen. And here’s why. Yes, Latanya is an Ivy League Big Brain Academic. (And we mean that in the nice way, of course.) But she also has the tech credentials to speak geek with the very best of ‘em. And if that weren’t enough, for years she’s been a leading thinker about how privacy and technology policy affects consumers.

Here are some steps you can take immediately to help plug the potential gap Latanya is warning about:

HR professionals: Survey the faculty or management pages of your site and have your web master take down any CVs or resumes that include the kind of personal information ID thieves could exploit. Explain to your colleagues why it’s a risk they shouldn’t be taking. As new staff members are hired, implement a policy not to upload documents that include sensitive data. Executives and staff will appreciate that you’re looking out for them – and for the reputation of your institution or business.

Academics and professionals: If the CV or resume posted on your employer’s site or your personal homepage includes your Social Security number, date of birth, or other personal information, take the page down. If it’s a link to a .pdf, revise the document to get rid of the data crooks could exploit. Pass the word to your colleagues, mention it in your next staff meeting, or print this page and post it where they’ll see it.

Job applicants, graduate students, and others with an interest in promoting their credentials online: Be savvy about what you include on your CV, resume, or webpage. There’s just no reason for posting your Social Security number or date of birth where it’s accessible to some random web surfer. And your home address? These days, isn’t it more likely legitimate employers would contact you via email?

Those steps can reduce your risk from here on in, but what can you do if your personal information is already out there? Go to annualcreditreport.com and exercise your right to one free copy of your credit report from each of the three major national credit reporting companies. Stagger your requests and monitor your report once every four months.

A HReal HRisk HR can help HReduce | BCP Business Center.

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H.A.R.P. Has Been Extended!

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The H.A.R.P. (Home Affordable Refinance Program) program which enables struggling homeowners to refinance their mortgage, whose home value has declined, has extended its application deadline to December 31st 2015.

H.A.R.P. is a federal-government program designed to help homeowners refinance at today’s low mortgage rates even if they owe as much or more on their mortgage than their home is worth. The goal is to allow borrowers to refinance into a more affordable or stable mortgage. Most homeowners eligible for a HARP refinance are able to reduce their monthly payment by lowering the interest rate on their mortgage. Other homeowners can use HARP to convert their adjustable mortgage into a more predictable, fixed-loan program. You also have the option to do a HARP refinance for a shorter-term loan, which will help you build equity in your home at a faster pace.

To be eligible for a HARP refinance homeowners must meet the following criteria:

  • The loan must be owned or guaranteed by Fannie Mae or Freddie Mac.
  • The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
  • The mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009.
  • The current loan-to-value (LTV) ratio must be greater than 80 percent.
  • The borrower must be current on their mortgage payments with no late payments in the last six months and no more than one late payment in the last 12 months. 

Borrowers should contact their existing lender or any other mortgage lender offering HARP refinances.  For more information, please go to http://harpprogram.org/

 

CFPB—What The New Rules Mean For Consumers

Posted in Uncategorized by datafactssolutions on January 17, 2014

The new CFPB New Mortgage Rules recently took effect on January 10th 2014.

You’ve probably heard several things about how this is effecting banking and lending institutions, but you may still not be sure what this means to the consumer.

First let’s take a brief look back in the not so distant past…In 2008, the rise in home foreclosures was viewed by many as the result of sub-standard mortgage lending practices. Subsequently, Congress passed the Dodd-Frank Act in 2010, which created the CFPB and set forth a number of financial industry regulations aimed at protecting consumers, including some pertaining to mortgage lending. In January 2013, the CFPB issued mortgage rules that implement the mortgage provisions set forth by Congress under the act.

The new rules which took effect on January 10th broaden coverage of existing ability-to-repay rules, which require a lender to make a reasonable, good faith determination that a consumer has the ability to repay a loan. The rules extend coverage of the ability-to-repay rules to the majority of closed-end transactions secured by a dwelling (with certain exceptions). In addition, the rules set forth specific procedures a lender must follow when determining a borrower’s ability to repay a loan, including the consideration and verification of certain consumer information (e.g., income, employment status) and the calculation of the borrower’s monthly mortgage payment.

The rules also center on what are referred to as Qualified Mortgages. According to the Dodd-Frank Act, lenders that issue Qualified Mortgages will receive a presumption of compliance with ability-to-repay rules, thereby reducing their risk of challenge from a borrower for failing to satisfy ability-to-repay requirements.

The rules specify various requirements that a loan must meet in order for it to be considered a Qualified Mortgage, including:

  • Limits on risky loan features (e.g., negative amortization or interest-only loans)
  • Cap on a lender’s points and fees (3% of the loan amount)
  • Certain underwriting requirements (e.g., 43% monthly debt-to-income ratio loan limit)
  • The new mortgage rules were mainly put into place as a way to end irresponsible mortgage lending and ensure that borrowers will only be able to obtain a mortgage loan that they can afford to pay back.

Proponents view the rules as welcome industry safeguards that simply mirror responsible mortgage lending practices that are already in place. However, some mortgage-industry experts fear that the new rules may end up making obtaining a mortgage loan more difficult than it has been in the past–especially for borrowers who have a high debt-to-income ratio. Borrowers may also find themselves burdened with the task of providing lenders with additional documentation that they may not have had to in the past.

But what does all this mean to you?  The new mortgage rules mean you will have more information and more protection when you’re shopping for a loan, and while you own your home.

In the run-up to the housing crisis, some lenders made loans without checking a borrower’s income, assets, or debts. That turned out to be a pretty bad idea. And, when many borrowers couldn’t repay their loans, the economy took a devastating hit.

The CFPB new mortgage rules help protect consumers by requiring lenders to make a “good-faith, reasonable effort” to determine that you are likely to be able to repay your loan.   That means the lender will check and verify your income, assets, debts, credit history, and other important financial information. And no more qualifying consumers based only on those initial “teaser” rates that trapped many new homebuyers.

More Protections

Lenders who meet certain requirements called Qualified Mortgages–or QMs– are presumed to have made that good-faith, reasonable effort to check the applicant’s ability to repay. QMs have several characteristics that protect consumers.

First, QMs can’t have risky features like negative amortization or no-interest periods. Second, QMs are available with some exceptions to borrowers who have a monthly debt-to-income ratio of 43 percent or less, meaning that the total of their monthly mortgage payment, plus other fixed debts like car loans, is not more than 43 percent of their monthly gross income.

Most people taking out a mortgage now have a debt-to-income ratio of around 38%

Consumers will also have less to worry about when hiring someone to find a mortgage.  Loan officers and mortgage brokers have to follow rules to protect consumers from certain conflicts of interest.  That means anyone you pay to help you find a mortgage generally can’t also be paid by someone else.  And the loan officer or mortgage broker can’t get paid more to put you into a loan that has a higher interest rate.

More Information

The new rules empower all consumers to get important more information about their mortgage.  Consumers will now get a new periodic mortgage statement or coupon book that gives important information about monthly payments.  If you have questions about your mortgage or you believe your servicer has made a mistake, the servicer is required to respond to your inquiries quickly.

If your financial situation changes and you are having trouble making your mortgage payments, servicers now have to reach-out under certain circumstances and send written information describing how you can apply for the options available to avoid foreclosure.  During the housing crisis, mortgage servicers were often ill-prepared to help borrowers in trouble.  Important paperwork was often lost and borrowers were frustrated by services who couldn’t give them accurate information about their options for avoiding foreclosure.  Now your servicer has to ensure that employees assigned to help you will be able to answer your questions and important documentation won’t go missing.

You can think of all these changes as a “back to basics” moment for the mortgage market:  no debt traps, surprises, or runarounds.  And a market where if you run into trouble paying your mortgage, you will have a fair shot at all the options available to help you avoid foreclosure.