Division, will be conducting unannounced examinations of mortgage lenders and brokers over the next 90 days, beginning August 20, 2007.  The purpose of the examinations will be to investigate predatory mortgage lending practices in New Mexico and identify individuals operating as unregistered mortgage brokers.  For more details, click here.

Fannie Mae and Freddie Mac have jointly developed Master and Short Form security instruments for first mortgage loans as part of their continuing efforts to lower homeownership costs for borrowers and achieve greater efficiencies in the residential lending industry.  Fannie Mae has released Master and Short Form security instruments for twenty-six (26) states that permit use of a Master and Short Form.  These Master/Short Forms may be used in lieu of the Fannie Mae/Freddie Mac uniform first mortgage security instruments.  To view Fannie Mae's Announcement 07-13 regarding the Master/Short Forms, click here.

In Announcement 06-21, Fannie Mae advised that it will cease publishing new values for its London Interbank Offered Rate (LIBOR) indices, effective June 28, 2007, and will no longer accept delivery of any mortgage loans tied to its LIBOR index that are closed after that date. Any lender who is using the Fannie Mae LIBOR index to adjust the interest rate of an adjustable-rate mortgage loan (ARM) must now use a replacement index if the interest rate lookback date falls on or after July 31, 2007. Fannie Mae has also discontinued use of its Uniform Instrument Forms 3518, 3519, 3136, and 3137 that are tied to its LIBOR index. Accordingly, we have removed our generic loan programs containing these Forms. For more details, please refer to Announcement 06-21.

If you have any questions regarding this update, please contact DocMagic's Compliance Department.

Impac has suspended funding of its so-called Alt-A Loans and currently has no plans to originate these loans in the near future.  Impac is only funding loans that are eligible to be sold to government-sponsored agencies.

Recently a number of customers have called to inquire into why their Georgia prepayment penalty forms are not populating correctly when they enter a prepayment penalty period greater than 24 months. These customers have been entering 36-month prepayment penalty periods.

Pursuant to the request of lenders who are licensed by the California Department of Corporations (DOC), DocMagic, Inc. is now making available a model form prepared by the DOC that complies with California Civil Code Section 2948.5 regarding the disclosure to the borrower of per diem interest charged on residential mortgage loans.  The form name is CAPDID.DOC.  However, note that DocMagic's Per Diem Interest Disclosure (CAPDID3.MSC) will continue to serve as the default disclosure in California closing packages.  Customers desiring the DOC's model form will need to contact Customer Service to specifically request replacement of DocMagic's Per Diem Interest Disclosure with the model form.

In response to customer inquiries about whether a particular state commonly uses a deed of trust or mortgage as its security instrument, DocMagic's Compliance Department has prepared a matrix that sets forth this information. 

Here is the matrix: Mortgage and Deed of Trust State Matrix.

This month DSI posts updates to the loan programs of 1st National Lending Services, Aurora Loan Services, LLC, Bear Stearns, Chase - Wholesale Division, CitiMortgage, Inc. (Correspondent Division), Countrywide Home Loans (Correspondent), Credit Suisse First Boston (Correspondent), Decision One Mortgage Company, LLC, EMC Mortgage Corporation, Encore Credit Corporation, Freedom Mortgage Corporation, GE Money Bank, DBA WMC Mortgage, GMAC Bank, GreenPoint Mortgage Funding, Inc., Impac Funding Corporation, Option One Mortgage Corporation and U.S. Bank N.A. to its Compliance page.  Find out the description of each investor's loan program, which promissory notes, prepayment riders and addenda are used, and what the rate caps and interest-only periods are for variable rate loans by visiting our Investor Updates page.

A new disclosure, the Texas Notice of Penalties for Making False or Misleading Written Statement (File name: TXNOP.MSC), has been added to the Texas disclosure matrix pursuant to H.B. No. 716.  H.B. No. 716, which becomes effective on September 1, 2007, was enacted to prevent mortgage fraud and provide for criminal penalties for those persons found guilty of committing such fraud. 

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 July 2007.