Early last year, we published an article describing the changes we made to DocMagic for Windows (DMW) and DocMagic Online (DMO) regarding the creation of a bona fide discount point "flag" for purposes of the state-specific high cost tests we perform. Before the bona fide flag was created, the state-specific high cost tests had generally assumed that all discounts points paid by a borrower to a lender were bona fide and, therefore, were excludable from points and fees to the maximum amount permitted. Now, discount points are treated as bona fide if the bona fide box is checked; if the bona fide box is left blank, the discount points are not treated as bona fide. This method of designating discount points as bona fide or not has worked well since its inception.

According to SunTrust Mortgage Bulletin COR 07-063, effective on Monday, June 11, 2007, SunTrust Mortgage converted its Agency 3/1, 5/1 and 7/1 Treasury Arms (Fully Amortizing & Interest Only) to Agency 3/1, 5/1 and 7/1 LIBOR Arms (Fully Amortizing & Interest Only). Thus, effective with all new Agency ARM loan applications, registrations and/or lock-ins taken on or after Monday, June 11, 2007, the only available index will be the one year London InterBank Offered Rate (LIBOR). As SunTrust will not grant any lock-in extensions and re-locks, all Agency ARMs with a Treasury index must be locked by close of business, Friday, June 8, 2007 and closed no later than the lock-in expiration date.

In the article, "A Borrower's Right to Rescind," published in our May, 2007 issue of The Compliance Wizard, we indicated that we would be publishing more articles on the subject of a borrower's right of rescission. These articles are now available in this issue and are as follows:

• Closed-End Loan Forms & Form Selection Logic
• Open-End Loan Forms & Form Selection Logic
• Instructions for Completing a Notice of Right to Cancel Form

The Consumer Credit Act, commonly referred to as the "Mini-Code," became effective on October 1, 1997. The following information pertains to licensing and prepayment requirements under the Mini-Code.

DocMagic's Compliance Department has prepared a matrix that shows state-specific requirements applicable to impound/escrow accounts and whether fees associated with such accounts are permissible and/or subject to restrictions.

Here is the matrix: Impound Requirements Matrix.

Pursuant to Program Bulletin #2007-11, the California Housing Finance Agency (CalHFA) has revised some of its Homeownership Program documents for conventional loans. For more details about this update, please read Program Bulleting #2007-11. Please note that DocMagic, Inc. has updated its CalHFA Homeownership Program plans accordingly.

The Oklahoma Consumer Credit Commission has updated its annual dollar amounts under the Uniform Consumer Credit Code. These new dollar amounts go into effect July 1, 2007. Among the dollar amounts is the maximum late charge that may be imposed on closed-end loans where the loan has an APR greater than 13%. Under Oklahoma's Consumer Credit Code, a late charge equal to the greater of the dollar amount established by the Consumer Credit Administrator or 5% of the unpaid amount of the installment may be assessed for a payment that is not paid in full within 10 days of its due date. The maximum dollar amount established by the Consumer Credit Administrator has been increased from $20.50 to $21.00, effective on July 1, 2007.

On June 8^th, 2007, DocMagic, Inc.'s paralegal, Mark Delgadillo, walked at his commencement ceremony at El Camino College in Torrance, California, where he earned his Associate of Science degree and Paralegal Certificate. Mark previously interned with DocMagic's Legal/Compliance Department where he proved his capacity to work hard and succeed. DocMagic hired Mark as a paralegal in its Legal/Compliance Department in June, 2006.

DocMagic, Inc.'s Compliance Department has created a District of Columbia Domestic Partnership Addendum to Uniform Residential Loan Application (dcdpa.msc) ("Addendum") to enable customers to determine whether a borrower is involved in a domestic partnership when the secured property is the borrower's residence.

This month DSI posts updates to the loan programs of Chevy Chase Bank, SunTrust Mortgage, Taylor, Bean and Whitaker Mortgage Corp., and Wells Fargo Bank 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.

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 May 2007.