January 2010
Please note: the procedures described in this article are no longer the default procedures utilized within the DocMagic software and have been superseded by the procedures described in the article available here. If you wish to use the procedures described in this article, please contact a DocMagic Customer Service Department representative for additional assistance.
Beginning January 1, 2010, mortgage brokers who arrange federally related mortgage loans must use the new Good Faith Estimate (GFE). Two of the three California Department of Real Estate (DRE) Mortgage Loan Disclosure Statement (MLDS) forms (RE883.MSC and RE885.MSC), include a HUD-approved version of the old GFE. Therefore, the GFE provisions in both forms are not compliant with the new Real Estate Settlement and Procedures Act (RESPA) rules, effective January 1, 2010. The DRE is in the process of getting approval from HUD to combine the new GFE with the RE883.MSC and RE885.MSC forms.
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.
Our previous article, written by Anna DeSimone, announced that the Federal Trade Commission (FTC) had delayed enforcement of the Red Flags Rule until August 1, 2009. However, at the request of Members of Congress, the FTC has delayed enforcement of the Rule for a third time until June 1, 2010, to provide further compliance guidance to covered financial institutions and creditors. The Red Flags Rule's original effective date of November 1, 2008, continues to apply to covered entities regulated by the federal banking agencies or the National Credit Union Administration. For the FTC's announcement regarding the delay, please click here.
Contrary to what was stated in the article, New Borrower Type: Non-Title Spouse, Part I, and in this article, New Borrower Type: Non-Title Spouse, Part II, DocMagic's Notices of Right to Cancel (NORTC.MSC and NORTCI.MSC) now contain the signature of the Non-Title Spouse ("NTS"). DocMagic's Compliance Department decided recently to add the signature of the Non-Title Spouse to its Notices of Right to Cancel, because a number of investors require the NTS's signature. If you wish to omit the NTS' signature from the Notices of Right to Cancel, please contact Customer Service, at (800) 649-1362. Please note that the article, DocMagic Changes Default Print and Header Rules for Certain Loan Documents, has been updated accordingly. To view all At Your Service Articles, click here.
This month DSI has no new or updated loan programs of any investors to post to its Investor Updates page. However, please visit the Investor Updates page to review a description of each investors' current loan programs, including the promissory notes, prepayment riders and addenda that are used in a particular loan program, and any rate caps and interest-only periods that may be applicable to investors' variable rate loan programs.
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 December, 2009.
The U.S. Treasury security yield values for January 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 February 2010.
To view this month's list of announcements or newsletters related to our mortgage industry, please click here.
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