Nov/Dec 2009
From Dominic Iannitti, DSI President and CEO In a time of uncertainty when talk can be cheap, I believe our actions speak to what we represent and who we are. For over twenty years, most of us here at DocMagic have worked together on a daily basis and many of our clients have been with us almost as long. In a year of economic uncertainty, we have continued to grow. Not everyone can say that. We know how fortunate we are to have assembled the hardworking team of people we have here at DocMagic. Their customer service attitude and work ethic is why our company continues to grow year after year despite the vicissitudes of business and life in general.
Today we are pleased to announce the release of an updated and enhanced version of DocMagic Online (DMO) into production. Corresponding changes to DocMagic for Windows (DMW) should be released within the next week or so. The updates and enhancements (which in number and scope represent the largest, single software upgrade in DocMagic's twenty plus years of operation) have been implemented to ensure compliance with the new Good Faith Estimate (GFE) disclosure and HUD-1 Settlement Statement requirements that become mandatorily effective for any GFE and HUD-1 issued on or after January 1, 2010. We have incorporated screen shots from DMO, as enhanced, to better illustrate the nature of the changes in conjunction with an explanation as to why those changes are necessary. This article is not designed to answer all or even most questions about the implications of, or the subtleties and ambiguities often associated with, the data entered into particular fields. In addition to this article, we also will be posting additional articles in the very near future describing, for example, documents that have been created, revised and/or rendered obsolete by, and audits that we will be implementing to ensure compliance with, the new RESPA requirements.
With the advent of the amendments to RESPA Regulation X and the resulting new Good Faith Estimate (GFE) and HUD-1 Statement, all becoming effective January 1, 2010, DocMagic's Compliance Department has prepared a mandatory disclosure required by Reg. X Section 3500.7 for certain new home purchases and other RESPA-related disclosures that are not required by Reg. X, but intended to document the borrower's receipt of the GFE and the borrower's intent to proceed on the loan application covered by the GFE. In addition, the Compliance Department has prepared a "Total Estimated Funds Needed to Close" disclosure and a new Itemization of Amount Financed that will accompany the Truth-in-Lending Statement and return in the same loan package when a new GFE and HUD-1 Statement will be used in the loan transaction. A more detailed description of each one of these disclosures follows.
With the recent increased interest in government-insured loans (i.e., FHA, VA, and USDA loans), we have received many questions regarding the impact on high cost tests of certain fees and charges, including upfront mortgage insurance premiums (MIP), VA funding fees and USDA Rural Development guarantee fees paid by borrowers in connection with such loans. For purposes of the federal Section 32 and most state-specific high cost tests, the fact that the loan is government-insured has no impact on the respective high cost tests: finance charges (including MIP, VA funding fees and USDA Rural Development guarantee fees) paid to the respective government entity are points and fees and, consequently, are included in the high cost tests. However, some state-specific high cost tests apply different rules.
In anticipation of the new RESPA requirements that become effective January 1, 2010, DocMagic's Compliance Department has updated its Finance Charge Matrix to add a new column entitled "GFE Category & Default Block." In this column, you will find what the default GFE category for a particular fee will be when that fee is selected in the DocMagic application and the Block number on page 2 of the GFE in which the particular fee will appear (e.g., Block 3) or be a component of the total amount in that Block (e.g., Block 7).
HUD has posted its most current FAQs on the new RESPSA Rule, effective January 1, 2010, on its website here. The FAQs have been updated from time to time since they were first published on August 13, 2009. Despite the frequent updates, a number of fairly basic questions remain unanswered in one way or another. We contacted HUD recently, and they were very helpful in providing the following answers to the questions posed below regarding the GFE.
On November 12, 2009, the Federal Housing Finance Agency (FHFA) announced that the 2010 conforming loan limits (representing the maximum loan amounts Fannie Mae and Freddie Mac can purchase) will remain at $417,000 for most areas in the U.S. This is the fifth year in a row where the maximum conforming loan limits have gone unchanged. In addition, FHFA announced that the 2010 "jumbo" conforming loan limits applicable in so-called "high cost" areas, will also remain unchanged. To view a copy of FHFA's release, click here. Links to the 2010 high-cost area loan limits and 2010 loan limits for all counties are available in the release itself.
Written by Loretta Salzano*
The time is now! While we are all struggling with the impending deadline for the new GFE and HUD-1 forms as required by RESPA and Regulation X, let's not forget about an even larger change looming on the horizon. Earlier this year the Federal Reserve Board proposed the most sweeping changes to Regulation Z in a generation. The comment period expires on December 24, 2009. Yes, that's correct, Christmas Eve - only a few weeks away. Perhaps the timing couldn't be worse, but do not let the comment period expire without letting your voice be heard. Countless times industry cries out only after a rule is finalized and the appropriate opportunity to oppose it (or revise it) has long passed.
With the RESPA 2010 requirements and the new GFE and HUD-1 just around the corner, below is a list of RESPA implementation resources that might be of interest to you. Special thanks to Christopher Cruise* for compiling this list:
You may have noticed recently that the DocMagic worksheet that appears in the predisclosure, pre-closing and closing loan packages looks substantially different. Indeed, the worksheet has changed and been replaced with the Loan Details Report. We discussed the features of the Loan Detail Report in a prior issue of The Compliance Wizard.
Previously, the DocMagic Compliance Department accepted email inquiries. In an effort to better serve our customers, especially in anticipation of a deluge of RESPA-related questions, all compliance requests to the DocMagic Compliance Department must now be submitted through the form located here: http://www.docmagic.com/compliance/contact. Our previous email address, will no longer accept emails.
This announcement is a reminder that as of March 20, 2009, Chase ceased originating through its Wholesale lending division. As a result, DocMagic, Inc. will remove Chase's Wholesale loan programs from its available program list and will update the Chase Wholesale Investor Matrix posted on the Investor Updates page. Chase will continue to purchase retail-originated loans through its Correspondent lending division. DocMagic customers can select JPMorgan Chase Bank, N.A (Correspondent) (Code: CMMC) loan programs from the investor program list.
In response to legislation in Nevada requiring the disclosure of a Nevada broker's name and license number, effective May 29, 2009 (read prior article here), Fannie Mae published an authorized change to its Nevada security instrument as Item No. 13 of its Instructions, as follows:
This month DSI posts updates to the loan program of AmTrust Bank and GMAC Bank 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.
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 October, 2009.
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 November, 2009.
The U.S. Treasury security yield values for November 2009 may be viewed online here. The December 2009 values will be posted on our site on December 15, 2009, after the Federal Reserve Board publishes the values in its weekly release. 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. Accordingly, the November 2009 values will be used for loan applications received by the creditor in December 2009, and the December 2009 values will be used for loan applications received by the creditor in January 2010.
To view this month's and last month's list of announcements or newsletters related to our mortgage industry, please click here.
|
