In response to the enactment of the Wyoming Residential Mortgages Practices Act ("Act"), which Governor Dave Freudenthal signed into law on February 25, 2005, Document Systems, Inc. has prepared three (3) new forms that are required by the Act. To view the complete copy Act, click here. Compliance with the Act became mandatory beginning on July 1, 2005.

Important Prepayment Penalty Disclosure

Document Systems, Inc. ("DSI") has prepared the "Important Prepayment Penalty Disclosure" to satisfy two provisions of the Act governing prepayment penalties. (See W.S. 40-23-113(a)(ii) and 40-23-115(b)) One provision requires a mortgage lender, as defined by the Act, to provide to the borrower within three (3) working days of taking a mortgage loan application and prior to receiving any consideration, other than third party fees, from the borrower, a disclosure of the fact that a prepayment penalty may be a condition of the residential mortgage loan. (A "residential mortgage loan" is defined as a first mortgage loan made primarily for personal, family or household use and primarily secured by a security interest on residential real property.) The borrower must agree, in writing, to accept this condition.

The other provision governing prepayment penalties requires a mortgage broker to disclose the fact that certain mortgage loan products impose a prepayment penalty on the borrower and the amount of, or the formula for calculating the prepayment penalty, if any. The terms of any prepayment penalty shall be disclosed to the borrower as soon as they are known, but not later than the issuance of the loan commitment, if any, for the mortgage loan product that the borrower chose.

The "Important Prepayment Penalty Disclosure" complies with the above provisions and will automatically print out with both the initial and closing packages for first-lien loans together with any applicable prepayment penalty addendum or rider. DocMagic users should remember to append the prepayment penalty addendum or rider to this form.

Wyoming Mortgage Brokerage Agreement

Under the Act, a mortgage broker has an obligation to execute and deliver to the borrower a mortgage brokerage agreement within three (3) business days of a borrower signing a completed mortgage loan application and before the borrower provides any consideration to the mortgage broker. (W.S. 40-23-114(a)) To comply with this provision of the Act, DSI has prepared a Wyoming Mortgage Brokerage Agreement that will print out in the initial disclosure package for Wyoming first-lien loans.

Wyoming Mortgage Broker Disclosure of Loan Terms

Before entering into a written mortgage brokerage agreement or accepting any consideration from the borrower, a mortgage broker must disclose the following information, as follows:

1. That the mortgage broker may not make mortgage loans or issue loan commitments in its own name;
2. That the mortgage broker cannot guarantee acceptance into any particular mortgage loan program or promise any specific mortgage loan terms or conditions;
3. A good faith estimate of the fees to be collected, including a credit report fee, property appraisal fee or any other third party fee;
4. The terms and conditions for obtaining a refund of any fees or arranging for the transfer of third party service work products to another mortgage lender or mortgage broker, if any. Any fees collected in excess of the actual cost shall be returned within sixty (60) days after rejection, withdrawal or closing. (W.S. 40-23-115)

DSI has prepared a Wyoming Mortgage Broker Disclosure of Loan Terms to comply with the above provision. This document will print out with all broker-originated, initial loan packages for Wyoming first-lien loans. As a Good Faith Estimate ("GFE") must be disclosed with the disclosure of the other loan terms, a GFE will automatically print out with this form. Please make sure to append it behind the Wyoming Mortgage Broker Disclosure of Loan Terms.

Melanie A. Feliciano is Assistant General Counsel of Document Systems, Inc. and a member of its Compliance Department.