August 2010
To view this month's list of announcements or newsletters related to our mortgage industry, please click here.
The U.S. Treasury security yield values for August 2010 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 September 2010.
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 July, 2010.
In response to customer demand, DocMagic has added a new charge titled "PMI Premium" to its dropdown list of charges. This new PMI Premium may be used to enter upfront private mortgage insurance (PMI) into the DocMagic software.
Section 32 of Regulation Z (12 CFR 226.32) imposes certain disclosure requirements and substantive limitations on creditors in connection with loans that exceed certain rate and/or fee thresholds. Section 32 applies, in part, to certain loans if the total points and fees payable by the consumer at or before loan closing will exceed the greater of eight percent (8%) of the total loan amount, or a dollar amount threshold. When Section 32 was added to Regulation Z in 1995, the dollar amount threshold was $400. However, both the Truth in Lending Act (15 U.S.C. §§1601 - 1666j) and Regulation Z require the Federal Reserve Board (FRB) to make annual adjustments to the dollar amount threshold based on changes in the consumer price index. In a final rule and commentary published on July 30, 2010, the FRB announced that effective January 1, 2011, the dollar amount threshold will be increased to $592. To view a copy of the FRB's rule and commentary, click here.
The FNMA Security Instrument instructions allow the lender to add the following optional "Purchase Money" verbiage above the security instrument's caption and in the space provided for the legal description for the property securing the loan: (All or part of the purchase price of the Property is paid for with the money loaned.) Note that the Fannie Mae instructions for the state of Maryland require the foregoing verbiage to be on the security instrument. These mandatory changes have already been programmed to populate accordingly whenever the loan purpose is a purchase. For all other states, the verbiage is optional and is available for the MERS and non-MERS versions of the following types of Security Instruments: Conventional (1st, Junior), FHA, and VA. Please contact Customer Service, at (800) 649-1362, to request that this optional version be added for your account.
The Virginia High-Risk Mortgage Loan Law (Code of Virginia, Title 55, Chapter 4, Section 55-59.1:1) expired on July 1, 2010. The audit described here will continue to be in effect for transactions with an application date before July 1, 2010 for the next few months. On October 1, 2010, DocMagic's Compliance Department will completely retire the audit.
By now it is common knowledge among those who engage in residential mortgage loan origination activities that the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203 ("Dodd-Frank Act") was signed into law on July 21, 2010. The Dodd-Frank Act, comprised of 16 titles, is intended to, among other things, address and prevent the events that are believed to have caused the financial crisis beginning in 2007 by providing for financial regulatory reform and protections for consumers.
Effective for Veterans Administration (VA) loan applications taken on or after October 1, 2010, lenders must itemize (1) seller, lender, mortgage broker, or real estate agent/broker credits and (2) title service and lender's title insurance charges shown on Line 1101 of the HUD-1 Statement. See VA Circular 26-10-9 and VA Circular 26-10-9, Change 1. The referenced VA Circulars encourage lenders to combine the itemization of credits and title charges with the VA origination statement required by VA Circular 26-10-1.
With the passage of Senate Bill 1216, which becomes effective September 1, 2010, the North Carolina High-Cost Home Loan Law (the "NCHCL") will change as follows:
On August 2, 2010, the New Jersey Department of Banking and Insurance ("Department") published Bulletin 10-17 ("Bulletin"), which clarifies fee disclosure requirements under the New Jersey Administrative Code without affecting the scope of required RESPA disclosures. These disclosure requirements apply to all entities and individuals involved in residential mortgage lending activity regulated under the New Jersey Licensed Lenders Act (the "Act"), N.J.S.A. 17:11C-1 et seq., and the New Jersey Residential Mortgage Lending Act ("RMLA"), N.J.S.A. 17:11C-51 through 17:11C-89.
 DocMagic, Inc., the industry's leading technology provider for compliant mortgage loan document preparation, has been recognized by Mortgage Technology magazine as one of the 2010 Top 50 Service Providers. This marks the ninth consecutive year that DocMagic has been named in the publication's annual listing of top service providers since the award's inception in 2002.
To enter the Also Known As or "AKA" information for a borrower, click on the "Details" button in the "Borrowers/Sellers" tab (see below image). The information entered in this field will appear on the Signature Affidavit and AKA Statement (DocMagic form name AKA.LSR).
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