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A Desktop Reference Manual of Compliance Terms.

For mortgage bankers who require an understanding of regulatory compliance terms, A Desktop Reference Manual of Compliance Terms is a very practical tool, but not necessarily in the manner the authors may have intended.

First of all, the current edition of A Desktop Reference is more a banking book than a mortgage banking book. It covers financial regulatory information that is not found in most mortgage banking reference guides. The emphasis on banking is most readily apparent to the mortgage banker who is disappointed when he/she fails to find an adequate reference to such common compliance concepts as "right of rescission," "referral fees" or "Good Faith Estimate." The lack of mortgage perspective becomes almost comical with such lapses as the "Federal Housing Authority" (instead of the "Federal Housing Administration") and failures to accurately identify Freddie Mac and the Department of Veterans Affairs.

It would be unfair to label these oversights fatal, however. For while a book this ambitious is bound to suffer some lapses, this one has much more to offer than other reference guides of its relatively small size and cost. In fact, once the mortgage banker accepts the fact that other sources must continue to be relied upon for specific and timely mortgage compliance information, he/she can put A Desktop Reference in its proper perspective - using it in tandem with other compliance resources to cover the full range of federal financial regulations.

A Desktop Reference is divided into three main sections: a dictionary, where several hundred financial terms are defined; a glossary of regulations, which lists each financial regulation and the corresponding terms (cross-referenced back to the dictionary); and a list of acronyms.

The dictionary section is the book's principal section. It is a very ambitious effort to list and define federal financial compliance terms. It is far more comprehensive in the regulatory and banking areas than the Mortgage Bankers Association of America's (MBA's) Mortgage Banking Terms - especially so because of its periodic regulatory citations (more on that later). But, as already mentioned, it is less comprehensive in defining specific mortgage compliance terms. Its most detailed definitions are reserved for such terms as "transaction account" and "savings deposit." "Residential mortgage transaction" and "servicing rights" get significantly shorter shrift.

I make no claim to being a banking expert and cannot therefore, speak to the accuracy of the banking term definitions. However, the sheer volume of references in the dictionary section to terms found in specific banking regulations as opposed to mortgage regulations leaves the impression that the authors spent much more time than most mortgage bankers ever will defining such arcane regulatory principles as "paying bank" and "time deposit." For mortgage bankers with a need (but not the time) to become familiar with such terms, the book is an invaluable resource.

Mortgage bankers who need to be familiar with a wide range of banking and financial terms will significantly benefit from the periodic specific regulatory references given for compliance terms. If you are not satisfied, for example, with a page and a half definition of "time deposit," you can find more in "Regulation D, 12 CFR 204.2(c)." Similarly, if you want to brush up on how a "depository institution" is defined, there are several citations - each noting the specific regulation, section and subsection.

These specific regulatory references - although not frequent enough - are the dictionary section's most unique benefit. For example, in the mortgage area, if you are looking for a quick way to find Regulation Z's definition of a "prepaid finance charge," it is right there in the dictionary ("12 CFR 226.2 [a] [23]"). These citations enable the reader to quickly cross-reference terms, discover where certain terms originate and, therefore, know where to seek additional clarification.

The book's next section - its glossary of regulations - is a particularly helpful resource. It lists each financial regulation in alphabetical order, from Regulation A to Regulation Z (and beyond), gives a brief description, gives its CFR citation and lists all of the terms emerging from that regulation that are addressed in the book's dictionary section. As with the dictionary, there is clearly more emphasis on banking than on mortgage compliance. The RESPA reference, for example, is noticeably weak. Again, because so much more timely RESPA information is available from other sources, the fact that the book only touches on it is not a serious flaw.

The glossary is most useful in cross-referencing similar terms emerging from different regulations. The definition of "consumer credit," for example, varies between Regulation B and Regulation Z. From the definition in the dictionary, one can go to the regulation glossary and see what other terms these regulations may have in common. For any compliance officer who has encountered such questions as "What is Regulation H?" or "Do we have to comply with Regulation AA?," this list is a true time-saver.

Although it could be larger and more inclusive (MBA, for example, is absent, while ABA is not), the list of acronyms is also a very helpful resource to mortgage personnel who come into contact with a wide range of financial and regulatory information. Acronyms range from the most common (PMI, HUD, OTS and HMDA) to the more arcane (UBPR - Uniform Bank Performance Report, RSU - Remote Service Unit). Need to know what CSVLI refers to? ROE? TIN? REIT? They are conveniently identified.

Whether used to enhance existing compliance and training materials or used on a daily basis as a working reference, A Desktop Reference Manual of Compliance Terms is an excellent addition to the mortgage banker's compliance library. In the book's preface, the authors note that they plan to continue to update and expand the book in future editions. Such expansion will only enhance the book's value - particularly if greater attention is placed on mortgage issues.

A Desktop Reference Manual of Compliance Terms is available from the MBA at $30 for members and $35 for nonmembers. Call 1-(800)-793-MBAA to order.
COPYRIGHT 1993 Mortgage Bankers Association of America
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Author:Brewster, William H.
Publication:Mortgage Banking
Article Type:Book Review
Date:Feb 1, 1993
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