From Dominic Iannitti, DSI President and CEO

The Holiday Season is a very special time. As each year comes to a close, we take a few moments to be thankful for the many blessings we have enjoyed throughout the year. While I find myself thankful all year long for the many wonderful people in my life, whether they are family, fellow employees of DSI, our customers or our partners... it's important that we all take the time to share those feelings with those we care about.

A number of disclosures will become mandatory at the beginning of 2008.  The new disclosures as well as a description of the new laws requiring the disclosures are outlined as follows:

North Carolina has created a new category of predatory loan, the so-called "rate spread home loan."  The new law is contained in North Carolina G.S. Section 24-1.1F (a copy of the bill enacting this new section is available here). 

Both Fannie Mae and Freddie Mac have announced that conforming loan limits for 2008 will remain unchanged for a third year in a row.  Conforming loan limits for most of the U.S. are: $417,000 for loans secured by single-unit properties; $533,850 for two-unit properties; $645,300 for three-unit properties; and $801,950 for four-unit properties.  Conforming loan limits for Alaska, Hawaii, Guam and the Virgin Islands are 50% higher than the foregoing limits for the majority of the U.S.

On November 6, 2007, Texas voters overwhelmingly passed HJR 72, which amended the portion of the Texas constitution governing home equity loans (closed - and open - end, cash-out refinance transactions involving owner-occupied (homestead) property).  The amendments became effective on December 4, 2007, the date when the official canvass of the votes was held.

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 2007, only loans with principal loan amounts not exceeding $400,001.50 are subject to the Act.  For 2008, the maximum principal amount of a loan that may be subject to the Act has been increased to $411,777.45.  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, 2008.  To view a copy of the New Jersey Department of Banking and Insurance Bulletin 07-21, click here.  Please contact the DocMagic Compliance Department if you have any questions or comments.

DocMagic, Inc.'s Compliance Department has prepared and added the following disclosure matrices to its Disclosure Matrices Page:

1.  Federal Multistate Disclosures
2.  FHA Default Disclosures
3.  Pipeline Matrix

The new Maine anti-predatory lending law (Public Law, Chapter 273) makes significant changes to, among other things, various provisions of the current Consumer Credit Code relative to "residential mortgage loans," and a particular subset of residential mortgage loans defined as "high-rate, high-fee mortgage" loans.  The new law becomes effective January 1, 2008.  We are making the necessary programming changes to conform to the new anti-predatory lending requirements of Maine law. 

To view Maine's High Cost Memo, click here.

The Colorado Director of the Division of Real Estate has adopted an emergency rule regarding prepayment penalties effective December 14, 2007. The Director adopted the rule "in order to address the high rate of foreclosures in Colorado resulting from particular prepayment penalties." A copy of the emergency rule is available online here.

On December 4, 2007, the Colorado Division of Real Estate adopted an Emergency Rule interpreting Section 12-61-904.5 of the Colorado Revised Statutes as it relates to reasonable inquiry and tangible net benefit.  The emergency rule applies to mortgage brokers and clarifies what is meant by making a reasonable inquiry concerning a borrower's current and prospective income, existing debts and other obligations, and any other information known to the mortgage broker.  After making such inquiry, the rule states that the broker must use his or her best efforts to recommend, broker or originate a residential mortgage loan that takes into consideration the information submitted by the borrowers.

Written by Joyita Basu*

Currently, more than 25 states have adopted laws restricting or prohibiting the collection, use or disclosure of an individual's Social Security number ("SSN"), and theses laws generally apply to all commercial entities.1 In addition to the SSN disclosure laws discussed in this article, other state laws also may regulate the collection, use or disclosure of SSN data; for example, this article does not address state laws that regulate the collection, use or disclosure of SSN data by insurance entities, given the specialized nature of those laws.

DocMagic recently added Texas HELOC document packages for IndyMac.  All of the Texas HELOC loan programs and their corresponding plan codes that are available in DocMagic are shown below.

Effective October 26, 2007, CitiMortgage Loan Programs (for the Correspondent Loan Division) ceased including CitiMortgage's prepayment penalty forms in its closing packages and instead began including DocMagic, Inc.'s multistate and state-specific prepayment penalty forms whenever a loan involves a prepayment penalty.  For more information about CitiMortgage's loan programs, please visit the Investor Updates page or e-mail the Enterprise Investor Relations Department with any questions concerning these loan programs.

As Chevy Chase Bank ("Chase") revived its correspondent loan programs, effective on November 9, 2007, DocMagic, Inc. is offering these programs once again.  However, Chase's loan programs will no longer be under DocMagic's former loan program codes.  The revived loan programs now have the same plan codes as Chase's plan codes and descriptions so that they are readily identifiable to the DocMagic user.  This hopefully will result in eliminating any confusion by the DocMagic user about which loan program to select.  Chase's new loan programs may be viewed here.  To view other investors' loan programs currently posted to our Compliance site, please visit the Investor Updates page.  Please contact Customer Service at (800) 649-1362 if you have any questions.

Previously, both a Pre-Application Disclosure (FLPAD.MSC) and Lender Application (FLLA.DSC) returned in Florida predisclosure packages, while the Lender Application also returned in closing packages.  DocMagic, Inc.'s Compliance Department has decided to remove the Pre-Application Disclosure from Florida predisclosure packages as the Lender Application accomplishes the same purpose as the Pre-Application Disclosure and is more comprehensive in terms of the fees it references.  To view the Florida disclosure matrix posted on DocMagic's compliance page, click here.

In response to customer requests, DocMagic, Inc.'s Compliance Department has prepared a Borrower's Certificate of Net Tangible Benefit (BCNTB.DSC) that may be used where a specific net tangible benefit form or worksheet is not required by applicable state law.  To request this form in your package, please contact DocMagic's Customer Service Department.

This month DSI posts updates to the loan programs of Branch Banking & Trust (BB), Chevy Chase Bank, F.S.B., CitiMortgage, Inc. (Broker Division), Freedom Mortgage Corporation,  Homecomings Financial, LLC, IndyMac Bank, Residential Funding Corporation,  SunTrust Mortgage, Inc., Taylor, Bean and Whitaker Mortgage Corporation, U.S. Bank, N.A.,  and Wells Fargo 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.

Recently we wrote about the changes we made to the DocMagic software's treatment of negative prepaid (also known as "odd-days" or "per diem") interest for Countrywide-specific loan plans to bring them in line with Countrywide's policies. That prior article provides some useful background and is available here.  Since that time, a handful of additional investors have requested comparable treatment of negative per diem interest for their respective loan plans.

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 2007.

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 November 2007.