February 2009
Updated: April 1, 2011 (Revisions are based on this article here.)
We recently wrote that effective March 16, 2009, the Maryland Commissioner of Financial Regulation would begin enforcing the "higher-priced mortgage loans" regulations applicable to mortgage lenders and mortgage originators. Below is a description of how the new higher-priced mortgage loan regulations (COMAR 09.03.06.02, located here, and COMAR 09.03.09.02, located here) work along with a description of the audit DocMagic will be implementing to assist you in identifying such loans.
There has been quite a bit of discussion lately regarding the treatment of seller-paid fees and charges for purposes of the Fannie Mae test. The controversy began when in late January 2009 a major investor announced that they had confirmed with Fannie Mae that seller-paid items should be included in the Fannie Mae 5% points and fees test. This struck many compliance professionals by surprise so we decided to ask Fannie Mae. Here is our question and Fannie Mae's response:
DocMagic customers may now request Consolidation, Extension and Modification Agreement ("CEMA") conventional and FHA fixed rate loan programs for New York refinance transactions to be added to their inventory of loan programs. Pursuant to HUD's Mortgagee Letter 2008-26, dated September 25, 2008, DocMagic's Compliance Department has created a new version of the FHA CEMA that matches Fannie Mae/Freddie Mac's CEMA Form 3172, except that all references to "Fannie Mae/Freddie Mac" Notes, Uniform Instruments, and Mortgages have been removed and replaced with references to "Federal Housing Administration."
The Pennsylvania Department of Banking ("Department") adopted rules under the Mortgage Loan Industry Licensing and Consumer Protection Act requiring lenders and brokers to provide a new Consumer Mortgage Disclosure Form (on a form prescribed by the Department). Under Pennsylvania Regulations, Title 10, Part IV, §46.2, licensees who take an application for a mortgage loan are mandated to disclose the following information to an applicant:
By popular demand, a pre-closing package will soon be added to DocMagic's repertoire of package types. A number of customers have been requesting a pre-closing package that includes a number of federal and state-specific disclosures that should, but may not be legally required to be, re-disclosed to the borrower because of a change in fees and charges and/or the interest rate in the loan transaction in addition to state-specific disclosures that applicable state law requires be delivered to the borrower prior to the closing date of the loan either because of a material change in the loan terms or the applicable statute or regulation requires that the disclosure be given within a certain number of days prior to closing.
In an apparent effort to correct the confusion brought on by the changes to the North Carolina high-cost home loan law (G.S. Section 24-1.1E) by Session Law 2008-227 (House Bill 2188), which changes precipitated the North Carolina Commissioner of Banks to issue Declaratory Ruling 2008-1, the North Carolina legislature has once again amended the definition of points and fees in high-cost home law to insert a requirement that the charges be "paid by a borrower at or before closing." See House Bill 1222 (Session Law 2009-457) here. With this statutory change, it appears that seller-paid Regulation Z Section 226.4(c)(7) charges are not points and fees for purposes of the high-cost home law, even if paid to the lender or lender affiliate and even if the lender otherwise receives a direct or indirect benefit from the payment of the charges. The determination in Declaratory Ruling 2008-1 with respect to seller-paid mortgage broker fees and prospective seller-paid prepayment penalty fees remain unaffected by these statutory changes and remain points and fees under the high-cost home law.
Written by Richard Triplett, CMB*
In the previous article (RESPA Reform Final Rule), I discussed the provisions of RESPA reform that become effective on January 16, 2009. This article will focus on the newly revised Good Faith Estimate (GFE), and specifically the first page. Additional articles will follow on each page for your reference in implementing this revised disclosure on January 1, 2010.
Written by Stephanie Ochoa*
If you are in compliance and/or licensing in the mortgage lending world, there's no doubt that you have heard of yet another acronym - the S.A.F.E. Act. The Secure and Fair Enforcement for Mortgage Licensing Act of 2008, technically Title V of the Housing and Economic Recovery Act of 2008 (Public Law 110-289) ("HERA"), sets forth requirements for the licensing and registration of all loan originators by August 1, 2009.
Find the mortgage lending convention, conference, trade show and expo schedules in one location on DocMagic's website. Bookmark this page and check back often. We'll be updating this list throughout the year. Also, look for DocMagic at the events marked with an * so that you may stop by and say hello!
This month DSI posts updates to the loan program of GMAC Bank and CitiMortgage, Inc. (Correspondent Division) 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.
Although new Ohio Revised Code Section 317.114 governing document recording requirements in the state of Ohio does not apply to documents executed before July 1, 2009 (with some exceptions), DocMagic's Compliance Department has already implemented the required changes to Ohio recordable instruments and documents, namely updating the top and bottom margins of mortgages, assignments, riders, loan modification agreements and other instruments or documents that are required to be recorded with a county recorder in Ohio.
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 January, 2009.
The U.S. Treasury security yield values for February 2009 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 March 2009.
To view this month's list of announcements or newsletters related to our mortgage industry, please click here.
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