DocMagic is pleased to announce that we've launched an updated Compliance Website! Now you may search all of our articles and view a list of our Compliance Topics, such as RESPA/TILA Disclosures, Late Fees, Prepayment Penalties, and much more! Also, on the Compliance Home Page, check out the "Latest News" and "Most Popular" pages. If you have a compliance question, go here (and be sure to book mark the page) to find answers to your compliance questions.

In response to customer demand, DocMagic’s Compliance Department has prepared a matrix that outlines the default disclosures found in DocMagic’s initial and closing packages for each state, plus the District of Columbia and the Virgin Islands. The matrix may be viewed in its entirety or on a per-State basis here.

Pursuant to the enactment of Ohio S.B. 185, DocMagic’s Compliance Department has prepared ten (10) disclosures that a mortgage broker or licensee making loans in Ohio must provide to a borrower, effective on January 1, 2007. Eight (8) of the disclosures are based on model forms prescribed by the Ohio Attorney General or Financial Institutions Division of the Ohio Department of Commerce pursuant to Administrative Rules. As some of the Rules are not scheduled to become effective until early February, 2007, the form and content of some of the model disclosures are subject to change. DocMagic’s Compliance Department will update these disclosures accordingly should any of the Rules change. Following is a list of the newly created disclosures:

As a result of Ohio SB 185, the permissible prepayment penalty provisions in Ohio have been revised effective for loans closing on or after January 1, 2007, as follows:

The Ohio Supreme Court has struck down the City of Cleveland's predatory lending ordinance, concluding that the stricter Cleveland lending ordinance conflicted with Ohio's statewide predatory lending statutes. A copy of the court's decision is available here. As a consequence, we are removing three disclosures and notices from our Ohio plan build that pulled whenever the property city was Cleveland - Ohio Certification (OHC.MSC); HUD Approved Housing Counselors in Ohio (OHHUDA.MSC), and Important Notice to Customers of Home Improvement Contractors (OHIN.MSC). Please contact DocMagic's Compliance Department if you have any questions.

Section 32 of Regulation Z (12 CFR 226.32) imposes certain disclosure requirements and substantive limitations on creditors in connection with loans that exceed certain rate and/or fee thresholds. Section 32 applies, in part, to certain loans if the total points and fees payable by the consumer at or before loan closing will exceed the greater of eight percent (8%) of the total loan amount, or a dollar amount threshold. When Section 32 was added to Regulation Z in 1995, the dollar amount threshold was $400. However, both the Truth in Lending Act (15 U.S.C. §§1601 - 1666j) and Regulation Z require the Federal Reserve Board (FRB) to make annual adjustments to the dollar amount threshold based on changes in the consumer price index. By 2006, the dollar amount threshold had reached $528. In a final rule and commentary published on August 9, 2006, the FRB announced that effective January 1, 2007, the dollar amount threshold will be increased to $547. As a practical matter, the fixed dollar amount threshold of $547 will apply only if a loan's total loan amount is less than $6,837.50.

This month we add information regarding the Ohio Predatory Lending Act, which becomes effective for all loans with a closing date on or after January 1, 2007. In our August, 2006 issue, we added information regarding the Rhode Island Home Loan Protection Act, which becomes effective on December 31, 2006. And, in our July, 2006 issue, we added information regarding the Tennessee Home Loan Protection Act, which becomes effective on January 1, 2007. Please visit our Predatory Lending page to review these and other high-cost memos that have already been posted on the Compliance page of our website.

Both Fannie Mae and Freddie Mac have announced that conforming loan limits for first lien-loans will remain unchanged for 2007:

The New Jersey Home Ownership Security Act of 2002 (the "Act") provides for annual review and adjustment to the maximum principal amount of a loan that may be subject to the Act. For 2006, only loans with principal loan amounts not exceeding $383,682.60 are subject to the Act. For 2007, the maximum principal amount of a loan that may be subject to the Act has been increased to $400,001.50. Loans with principal amounts exceeding that figure will not be subject to the Act's provisions. The revised amount is effective for all applications received by a lender on or after January 1, 2007. To view a copy of the New Jersey Department of Banking and Insurance Bulletin 06-25, click here. Please contact the DocMagic Compliance Department if you have any questions or comments.

In Announcement 06-23: HOEPA Mortgages and Mortgages with Excessive Fees (12/05/06), Fannie Mae postponed the effective date of the amendments to the Fannie Mae Single-Family Selling Guide contained in Announcement 06-04 from June 1, 2006 to January 1, 2007.  Ann. 06-04 amended Part VII, Section 104.11 and Part VII, Section 104.15 of the Selling Guide.

Please note that the article published in the October, 2006 issue of The Compliance Wizard has been revised to indicate the leasehold provisions that were added to Section 9 in New York and Maine's "plain language" mortgages, entitled "Lender's Right to Protect Its Rights in the Property." You may view the updated article by clicking here.

DocMagic's Compliance Department has prepared balloon notes and riders that comply with the Consumer Credit Code applicable in Colorado, Indiana and Utah. These balloon notes and riders will default whenever a DocMagic user selects a junior-lien balloon loan program where the secured property is located in any one of these states and the property is either owner-occupied or a second home. Note than an investor-specific loan program may have that investor's own balloon note. If the investor has not provided its own balloon rider, then DocMagic's balloon rider will return in the package.

Section 3 of A.B. 334, which was approved by Nevada's Governor on June 17, 2005 and codified as Nevada Revised Statute Section 239B.030, becomes effective on January 1, 2007. Section 239B.030 provides, among other things, that a person shall not include, and a governmental agency shall not require, the social security number of a person on any document that is recorded, filed or otherwise submitted to the governmental agency on or after January 1, 2007. Section 239B.030 also authorizes a governmental agency to require a person to provide an affirmation statement that the document does not contain the social security number of any person when submitting a document for recording, filing or submission to that agency. Section 239B.030 further provides that if a governmental agency requires an affirmation statement, it may refuse to record, file or otherwise accept a document which does not contain such statement when required and any document which contains the social security number of a person.

Beginning on January 1, 2007, California Financial Code Section 22317.2 will authorize a California finance lender to collect a fee for an automated valuation model ("AVM ") result prepared by a third party as long as the fee does not exceed the actual cost paid to the third party for the written AVM result in lieu of an appraisal. A borrower may not be charged for both an AVM result and an appraisal for the same property in a single transaction. Only one fee for providing an AVM result or an appraisal for the same real property may be collected, unless the borrower has obtained a new or additional loan and more than one year has elapsed since the prior delivery of the AVM result or appraisal. If a fee has been paid, another fee for an appraisal may be imposed within one year if the borrower has obtained a new or additional loan and if the amount paid for the AVM is subtracted from the appraisal fee.

When processing a Greenpoint plan in DocMagic recently, you may have noticed an audit advising that the plan code you were using has been updated and that you need to download a new plan. As Greenpoint has modified many of their notes, riders and disclosures, Document Systems, Inc. has updated many programs and modified it's plan codes to match Greenpoint's programs, effective as of December 8, 2006. The revised loan program of GreenPoint Mortgage Funding, Inc. have been posted to the Investor Updates page of the Compliance section of DocMagic's website. You may also view other investors' loan programs by visiting our Investor Updates page.

To successfully register your loan with MERS via DocMagic Online, it is important that you first complete three (3) steps. First, you must register with MERS and receive a MERS Organization ID number. Second, the ID number must be activated by a MERS integration representative. Finally, you must add DocMagic as an authorized MERS vendor on MERS' website. This last step is outlined on our website here.

In order to keep DocMagic software users better apprised of document changes and additions as they occur, DSI posts listings of all newly created and revised documents. Here is the list of forms created or modified in October, 2006. There were no new forms created or modified in November, 2006.