Revised February 21, 2007 (revisions are highlighted in yellow)

The Rhode Island Department of Business Regulation, Division of Banking, adopted emergency regulations to implement the Rhode Island Home Loan Protection Act (RIHLPA). Among other items, the emergency regulations further define terms used in the RIHLPA and create standard disclosure forms that must be used in a loan transaction. Although the emergency regulations are effective immediately, the Department of Business Regulation will not take any enforcement action related to the use of the disclosures until April 1, 2007. Document Systems, Inc. will make these disclosures available on February 21, 2007.

Following is a summary of the new disclosures:

Prohibited Acts and Practices Disclosure Regarding All Home Loans: This disclosure is designated as Form 1 in the emergency regulations and must be given to the loan applicant within three (3) days of application. This disclosure will appear in initial packages regardless of lien position, when the loan originator is a lender or broker and the secured property is owner-occupied.

Prohibited Acts and Practices Regarding High-Cost Home Loans: This disclosure is designated as Form 2 in the emergency regulations and must be given to the loan applicant within three (3) days of application. This disclosure will appear in initial packages regardless of lien position, when the loan originator is a lender or broker and the secured property is owner-occupied.

Tangible Net Benefit: This disclosure is designated as Form 3 in the emergency regulations and must be given to the loan applicant as soon as it is determined, but not later than ten (10) business days prior to closing, that the applicant/borrower may be required to present and the lender and loan broker are required to confirm a "tangible net benefit." This disclosure will appear in initial and closing packages (regardless of lien position) of rate and term and cash-out refinance transactions, when the loan originator is a lender or broker and the secured property is owner-occupied.

High-Cost Home Loan Disclosure: This disclosure is designated as Form 4 in the emergency regulations and must be given to the loan applicant as soon as it is determined by the lender and loan broker that the loan is a high-cost home loan, as defined by RIHLPA, but not later than ten (10) business days prior to loan closing. This disclosure will appear in all initial and closing loan packages that are determined to be high cost home loans under RIHLPA by DocMagic's high cost loan analysis, when the loan originator is a lender or broker and the secured property is owner-occupied.

Consumer Caution and Home Ownership Counseling Notice and Certification: This disclosure is designated as Form 5 in the emergency regulations. Once a loan is determined to be a high-cost home loan, the lender and broker must refer the applicant/borrower to a third-party non-profit counselor approved by the United States Department of Housing and Urban Development ("HUD") as soon as it is determined by the lender and loan broker that the loan is a high-cost home loan, but not later than ten (10) business days prior to loan closing. A HUD-approved counseling agency must provide this disclosure to the lender, certifying that the borrower was counseled face-to-face by the agency representative. This disclosure reflects the date and time of the counseling as well as a description of the reason for the counseling, the borrower's signature, and the agency representative's signature. This disclosure will appear in all initial and closing loan packages that are determined to be high cost home loans under RIHLPA by DocMagic's high cost loan analysis, when the loan originator is a lender or broker and the secured property is owner-occupied.

Note that the above disclosures are identical to the forms provided in the emergency regulations. The regulations provide that all persons subject to RIHLPA must use the exact disclosure forms provided in said regulations and must not alter or change them in any manner. DocMagic's Compliance Department contacted the Department of Business Regulations to clarify whether this provision prohibits the addition of its standard headers and footers and was advised to lay them out exactly as provided in the regulations. The Compliance Department was further advised that a future hearing on the emergency regulations will most likely discuss whether any changes may be made to the disclosures.

Please contact DocMagic's Compliance Department if you have any questions concerning these new Rhode Island disclosures.