Customers who process document packages for bi-weekly loans with mortgage insurance may have noticed that the “monthly inflow” for escrow items such as hazard insurance and property taxes are just that – the amount needed to fund the escrow account, expressed as a monthly payment – and that the “PMI/MMI Monthly” amount is actually the bi-weekly payment amount.  This can cause confusion, especially when the mortgage insurance certificate provides for a monthly payment amount.

In order to achieve greater consistency, the use of the PMI/MMI Monthly data field will be changed.  Effective April 26, 2011, customers will input the monthly MI payment (that is to say, the amount that will be remitted to the MI company on a monthly basis, reflected on the mortgage insurance certificate) to the PMI/MMI Monthly data field instead of the bi-weekly payment that will be made to the escrow account by the borrower.  The DocMagic system will use the monthly MI payment amount inputted to the screen to calculate the bi-weekly MI payment amount, which will appear on a number of loan documents, including the Amortization Schedule, Federal Truth-in-Lending Disclosure Statement, and Bi-Weekly Payment Letter.  The monthly MI payment will be pulled directly to forms that require a monthly payment amount, such as the Good Faith Estimate and HUD-1 Settlement Statement.

For now, the monthly MI amount must be inputted manually, and will appear in red type on the screen as the default calculation is still bi-weekly rather than monthly.  We are working on updating the calculator to calculate the monthly payment automatically.

Please contact DocMagic’s Compliance Department if you have any questions.