2. ROUNDTABLE LEADERSHIP Rob Northwood, Senior Compliance Officer, First Mortgage Co. Billy Parsley, Vice President, BancFirst Bruce Schultz, Senior Vice President, Spirit Bank Rich Tucker, Vice President, First Mortgage Company Monica Wittrock, President, First American Title & Trust

3. WHY COMPLIANCE? Dodd-Frank Act Creation of Consumer Financial Protection Bureau Hyper Regulatory Environment

4. STATUTES & REGULATIONS Bank Secrecy Act/Anti-Money Laundering (FFIEC/OFAC) Equal Credit Opportunity Act (ECOA & Reg B) FACT Act Fair Credit Reporting Act (FCRA & Reg V) Fair Debt Collection Practices Act (FDCPA) Home Mortgage Disclosure Act (HMDA & Reg C) Home Owners Protection ACT (HOPA)

5. STATUTES & REGULATIONS Mortgage Acts & Practices (MAPS) Privacy/Gramm –Leach-Bliley Act (GLBA & Reg P) Real Estate Settlement Procedures Act (RESPA & Reg Z) SAFE Mortgage Licnesing Act Truth in Lending (TILA & Reg Z) Unfair, Deceptive or Abusive Acts or Practices (UDAAP & Reg AA)

6. STATUTES & REGULATIONS If you don’t know this information, you could be S.O.L.

7. QUALIFIED MORTGAGE What Is QM/ATR? QM/ATR “Draws the Box” for the Market- Safe Harbor & Rebuttable Presumption Covers any loan where it is secured by a dwelling Serious Penalties– Strict Liability, Consumer Action & Defense to Foreclosure QM sets the Standard for QRM- Risk Retention (This Rule is still to come)

8. QUALIFIED MORTGAGE The General Ability To Repay Standard Current or reasonably expected income or assets; Current employment status; Monthly payment on the subject loan transaction; Monthly payment on any simultaneous loan (i.e. 2nd Mortgage) on the transaction; Monthly payment for mortgage-related obligations (Property Tax, Hazard Insurance, HOA Dues, Flood- if applicable); Current debt obligations, alimony and child support; Monthly Debt to Income Ratio or Residual Income; Credit history

9. QUALIFIED MORTGAGE What is the QM Safe Harbor? Special legal protection of a “Safe Harbor” Standardized Products (Fixed rate; no int. only, balloon or neg. am.) 43.0% Maximum DTI Ratio (Temporary Agency waiver may apply) Cannot be an “HPML” or High Priced Mortgage Loan under TILA Full verification of income, assets, etc. (The General ATR Standard)

10. QUALIFIED MORTGAGE How do you prepare for QM & ATR? Timeline – takes effect January 2014 Review processing & underwriting procedures Record retention requirements – storage capacity Secondary market loans vs. loans held in portfolio

11. THIRD PARTY VENDORS American Land Title Association (ALTA) : “Title Insurance and Settlement Company Best Practices” Proper State Licensing Appropriate Escrow (Fiduciary) Trust Account Processes Written Privacy and Information Security Plans Compliance with RESPA and other federal and state consumer financial laws Appropriate procedures for production, deliver and remittance of title insurance policies Professional liability insurance (E&O) and fidelity coverage Procedures for resolving consumer complaints

12. COMPLIANCE MANAGEMENT SYSTEMS (CMS) Four Independent Control Components of an effective CMS 1.Board and management oversight 2.Formal written compliance program A.Policies and procedures B.Training C.Monitoring and corrective action 3.Response to consumer complaints 4.Compliance audits and records

13. MARKETING MAPS – Mortgage Acts & Practices Social Media UDAAP – Unfair Deceptive or Abusive Acts or Practices

14. THANK YOU We urge you to reach out to the leadership in your organization to have ongoing conversation about how compliance impacts your business model.