Connecticut has created a new category of loan, the so-called "nonprime home loan."  The new law is contained in Connecticut Public Act 08-176 (the "Act").  Below is a description of the audit DocMagic is implementing to identify such nonprime home loans.

Preliminary Note: According to Section 2133 of the Housing and Economic Recovery Act of 2008, beginning on October 1, 2008, and for a period of 12 months thereafter, a moratorium on FHA's implementation of its risk-based premiums policy, as described in ML 2008-16, will become effective. Accordingly, the contents of the article below apply only until September 30, 2008.

At DocMagic, we take great pride in the ability of our Section 32 and state-specific high cost tests to help keep our customers from making unsalable high cost loans.  That being said, these high cost tests can be extremely complicated, and it is often difficult to figure out the impact a particular fee has on a specific high cost test.  While we believe that the Section 32 and state-specific high cost memos we have posted online here, provide useful information and general guidance as to how our high cost tests are calculated, we also recognize that it would be highly beneficial if we could provide greater detail to our high cost test determinations.  Accordingly, we are pleased to announce the addition of that greater level of detail to our high cost test display screens in DocMagic Online.

Effective July 1, 2008, a couple of disclosures will be required as a result of amendments to the Ohio Administrative Code governing the Second Mortgage Loan Act. 

In March 2008, we wrote an article here about the impact of mortgage insurance premiums on some state high cost loan tests.  In May 2008, we wrote an article here about the treatment of discount points under various state high cost loan tests.  In this article, we explore the impact of non-borrower paid compensation to a mortgage broker, including but not limited to yield spread premiums (YSPs) paid by a lender to a mortgage broker, on various state high cost loan tests.