The Governor of Kentucky signed House Bill 552 on April 24, 2008, as sweeping emergency legislation affecting the mortgage industry in the State.  Among numerous changes, HB 552 amends several provisions of the Mortgage Loan Company and Mortgage Loan Broker Act (MLCMLBA) affecting licensing and other matters; establishes broker standards with regard to the origination of loans; creates the Kentucky Residential Mortgage Fraud Act, which makes residential mortgage fraud a felony; amends Kentucky's high cost loan law; and amends the law on prepayment penalties that may be assessed to the borrower.  This article summarizes the portions of HB 552 affecting the DocMagic software:

If you originate loans in Maryland, you may have noticed that we have modified our Maryland security instruments to indicate, when applicable, that the property securing repayment of the promissory note is the borrower's principal dwelling.  By way of background, recording fees in the applicable Circuit Courts in Maryland are based in part on number of pages.  Generally speaking, for documents of nine (9) pages or less, the recording fee is $20; for documents of 10 pages or more, the recording fee is $75.  There is an additional $20 surcharge for most instruments recorded in the land records, such as security instruments.  Thus, the aggregate recording fee is $40 for a security instrument of nine (9) pages or less, and $95 for a security instrument of 10 pages or more.  As you can see, the difference in recording fees is significant.  If, however, the document presented for recordation involves solely a principal residence, then the recording fee is $40 without regard to the number of pages recorded. 

DocMagic, Inc.'s Compliance Department recently updated the "assumption fee" provision in the Fannie Mae first-lien, conventional second-lien, Veterans Administration ("VA") and FHA Nevada and Oklahoma security instruments to track the maximum assumption fee that a lender is permitted to charge under Fannie Mae, VA and FHA guidelines.

In March 2008, we wrote an article here about the impact of mortgage insurance premiums on some state high cost loan tests.  In this article, we explore how discount points are treated under the various state high cost tests. 

For those DocMagic customers making loans in the State of Washington, you may wish to review a letter written by Deb Bortner, Director of Consumer Services, and posted on the Washington State Department of Financial Institutions' (DFI) website concerning new licensing requirements arising from recently enacted legislation.  To view the letter, click here.  Watch the DFI website for upcoming interpretive documents on some of the ramifications of the recent legislation.  The DFI will begin rulemaking to implement the new legislation in a few weeks.

For the past several months, the DocMagic Compliance Department has begun posting more and more information to the DocMagic Compliance Website between Compliance Wizard publication dates.  To ensure that you receive newly-posted information as soon as it is available, the DocMagic Compliance Department is pleased to announce the addition of an RSS feed to the DocMagic Compliance Website.  To subscribe to the DocMagic Compliance Website RSS fee, copy the following link into your favorite RSS reader: http://www.docmagic.com/compliance/feed.  Your RSS reader will check the feed regularly for new content and will download any updates that it finds automatically.

This month DSI posts updates to the loan programs of AmTrust Bank, CitiMortgage, Inc.(Correspondent Division) , GMAC Bank, and U.S. 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.

We receive customer questions on a daily basis regarding DocMagic's Section 32, state-specific high cost, and Fannie Mae/Freddie Mac points and fees tests.  The questions vary greatly but often they are reducible to the following: which test applies, when does it apply and what are the differences between them.  This article contains a brief roadmap for our customers of our high cost analysis process.

The U.S. Treasury security yield values for May 2008 may be viewed online here.  The yield is determined as of the 15th day of the month immediately preceding the month in which the creditor receives the application.  The yield value is used for Section 32 and most state high-cost tests.  These values will, therefore, be used for loan applications received by the creditor in June 2008.

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 April 2008.