As of the middle of August, 2008, the DocMagic software returns a deed of trust in a closing loan package for all non-FHA loans when New Mexico is the state in which the secured property is located.  Both Fannie Mae and Freddie Mac will mandate on September 1, 2008, that a New Mexico deed of trust be used instead of a mortgage.  DocMagic, Inc.'s Compliance Department changed the New Mexico Uniform Instrument from a mortgage to a deed of trust, as Fannie Mae and Freddie Mac documents are considered Uniform Instruments under DocMagic's License and User Agreement.

While the revision date of the Fannie Mae/Freddie Mac New Mexico security instrument reflects a date of March, 2008, the deed of trust will be required to be used, beginning September 1, 2008 based on Fannie Mae's following stated policy:

Effective Dates for Changes to Fannie Mae Legal Documents

We periodically make minor revisions to the Legal Documents, typically to comply with changes to applicable laws. When we revise the documents, we include a notation in the tagline at the bottom of the form to indicate the revision date, and we also include a notation of the revision date in the Instructions or Summary page for the document.  Users may begin using revised Legal Documents immediately.  Unless we specify, or applicable law requires, an earlier effective date, we require the use of revised documents by no later than six months after the revision date.

Although DocMagic's Compliance Department has also converted the Veterans Administration New Mexico security instrument to a deed of trust, the Federal Housing Administration (FHA) continues to use a mortgage as its New Mexico security instrument. The Compliance Department contacted FHA, which instructed that a mortgage should continue to be used pending its decision on whether or not to use deeds of trust for New Mexico loans. 

As New Mexico allows the use of both a mortgage and deed of trust as a security instrument, several customers have requested that DocMagic replace the deed of trust with the mortgage that was previously used for New Mexico loans. While DocMagic will accommodate future, similar requests, note that customers wanting to revert to a mortgage should confirm their investors' requirements.  Also keep in mind that the New Mexico mortgage will now be considered a "Non-Uniform Instrument" under DocMagic's License and User Agreement.  This means that DocMagic no longer warrants the mortgage and, therefore, has no obligation to continue to maintain it in the event of subsequent changes in the law affecting mortgages.

If you have any questions concerning the contents of this article, please contact DocMagic's Compliance Department.