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:
1. California Notary Acknowledgments and Jurats: Assembly Bill 886 instituted sweeping changes to California's notary laws on October 10, 2007. Among many of those changes are amendments to the statutory verbiage of the notary acknowledgment and jurat. The use of the new verbiage becomes effective on January 1, 2008.
"Personal knowledge" as a method of identifying document signers has been eliminated. Thus, the words "personally known to me" have been permanently removed from all statutory acknowledgment and jurat certificates. In addition, notaries must now certify under penalty of perjury that the acknowledgment certificate that they are signing is true and correct.
Please note that DocMagic, Inc.'s California security instruments and assignments already contain the new acknowledgment wording, and documents requiring jurats, such as the Occupancy and Financial Status Affidavit (CAOFSA.MSC), already reflect the new jurat verbiage.
2. AS OF DECEMBER 2007, THE FOLLOWING MASSACHUSETTS DISCLOSURES HAVE BEEN REPEALED. Click here for more information.
Massachusetts Important Notice of Loan Terms: Massachusetts' Attorney General updated and amended the 1992 mortgage broker and lender regulations to address problems that borrowers experience when seeking or obtaining a purchase money loan or refinance. Among other requirements, the amended regulations require that the lender and/or broker provide an Important Notice of Loan Terms ("Notice") to the borrower. The regulations provide two model Notices - one to be provided by the broker and one to be provided by the lender. Failure to provide the Notice shall be considered under the regulations to be an unfair or deceptive act.
The Important Notice of Loan Terms - Broker (MAINLTB.MSC) must be provided or mailed to the borrower no later than 3 business days after the earliest of the following events:
a. the acceptance by the broker of an oral or written application for a mortgage loan;
b. any communication which leads the broker to incur any expenses on behalf of the borrower, other than the expense of obtaining a credit report; or
c. any oral or written agreement between the mortgage broker and the borrower.
The Important Notice of Loan Terms - Lender (MAINLTL.MSC) must be provided or mailed to the borrower no later than 3 business days after the earliest of the following events:
a. the receipt by the lender of an oral or written application for a mortgage loan;
b. any communication which leads the lender to incur any expenses on behalf of the borrower;
c. any oral or written agreement by the mortgage lender and the borrower; or
d. the issuance of any commitment.
The model Notices were originally supposed to become effective on November 15, 2007, but the Attorney General has delayed the effective date to January 2, 2008. However, DocMagic, Inc.'s Compliance Department has made these model notices available since December 7, 2007.
3. Maine Mortgage Broker Agreement (MEMBC.MSC): LD 1869, which enacts the Act to Protect Maine Homeowners from Predatory Lending (PL 273), amends, among other things, the requirements for a mortgage broker agreement. Effective January 1, 2008, Maine mortgage broker agreements must include the terms and conditions of payment, including the total of all payments to be made by not just the consumer, but also by any other person or entity, whether to the loan broker or to some other person. DocMagic, Inc.'s Compliance Department will be updating its Maine Mortgage Broker Agreement to reflect this change by the effective date.
4. Maine Releases Net Tangible Benefit/Ability to Pay Rule: On December 4, 2007, the Maine Bureau of Consumer Credit Protection and Bureau of Financial Institutions jointly released their final Rule delineating the concepts of "reasonable, tangible net benefit" and "ability to pay." This Rule applies only to loan applications received by the lender after December 31, 2007.
The Rule describes the requirements that lenders must follow to avoid "flipping" a residential mortgage loan. "Flipping," under the Rule means a refinancing of a residential mortgage loan to a borrower when the borrower receives no reasonable, tangible net benefit.
The Rule further provides a model net tangible benefit form for lenders and borrowers to use to determine whether or not the borrower is receiving a reasonable, tangible net benefit when such loans are made. DocMagic, Inc.'s Compliance Department will be making this model Reasonable, Tangible Net Benefit Disclosure Form (MERTNBD.MSC) before the Rule's effective date.
The Rule also sets forth criteria for lenders to follow to determine whether or not, at the time a subprime mortgage loan is made, the borrower will be able to make the scheduled monthly payments on that loan. For a list of the criteria, please view the Rule here.
RSS