At DocMagic, we take great pride in the ability of our Section 32 and state-specific high cost tests to help keep our customers from making unsalable high cost loans.  That being said, these high cost tests can be extremely complicated, and it is often difficult to figure out the impact a particular fee has on a specific high cost test.  While we believe that the Section 32 and state-specific high cost memos we have posted online here, provide useful information and general guidance as to how our high cost tests are calculated, we also recognize that it would be highly beneficial if we could provide greater detail to our high cost test determinations.  Accordingly, we are pleased to announce the addition of that greater level of detail to our high cost test display screens in DocMagic Online.

Prior to the changes described below, it was often quite challenging to determine which fees were included in specific categories in the high cost tests.  For example, take a look at the following Georgia state high cost determination screenshot:

In the above screenshot, the amount shown under each heading is a subtotaled amount and, therefore, it is not readily apparent from this screen which fees and charges are included in, for example, the Prepaid Finance Charge, Other Mortgage Broker Compensation, Other Excludable Fees, and Bona Fide Discount Points categories.  Now take a look at the following screen:

You will notice two minor changes in the appearance of this display screen as compared to the previous display screen: (1) next to some of the line items you will notice a "+" symbol; and (2) at the bottom of the display screen, there is a new "Show Details" button. 

 When you click on the "Show Details" button, here is what you will see (because of the size of the display screen and for purposes of discussion, we have broken down what would normally appear as one display screen into two separate display screens below):

Each category that has a "+" symbol before it has been expanded to reveal either each of the fees and charges included within that particular category or the methodology used to calculate that particular item based on the applicable high cost law.  These detailed screens track the high cost memos posted online to our Compliance site here.  (Of course, if you want to see the details for any one heading, you may simply click on the "+" in front of that heading and the detail for that heading only will appear).  As shown above, under the "Prepaid Finance Charge" heading, each of the items entered into the DocMagic worksheet as a finance charge is individually listed.  Under the "Other Mortgage Broker Compensation," each non-prepaid finance charge paid by the borrower to the broker, as well as the yield spread premium the broker is receiving from the lender, is individually listed.  Under the "Total Points/Fees" heading, a running total of each fee, charge or other item added into and subtracted from total point and fees is individually listed.  Finally, under the Treasury Security Yield Used heading under the APR Test, the specific Treasury yield that is used for this purpose is displayed.  (See Georgia high cost memo here) 

Similarly, the individual items that are taken into account when calculating the total loan amount are individually listed.  In addition, the result of the calculation of the percentage of total points and fees in relation to the total loan amount is displayed, as well as the calculation of the dollar amount by which the total points and fees exceed the points and fees threshold.  See above screenshot.

Please note that the high cost details above are currently available for DocMagic Online (DMO) users only.  We are working on a solution for DocMagic for Windows (DMW) users, but no estimated time of completion is available as of the date of publication of this article.  We will publish an update to this article with further details as they become available.

Please contact the Compliance Department if you have any questions pertaining to the subject matter of this article.