2006

NEW DocMagic Compliance Website

Thu, 04 Jan 2007 15:04:35 -0800

DocMagic is pleased to announce that we've launched an updated Compliance Website! Now you may search all of our articles and view a list of our Compliance Topics, such as RESPA/TILA Disclosures, Late Fees, Prepayment Penalties, and much more! Also, on the Compliance Home Page, check out the "Latest News" and "Most Popular" pages. If you have a compliance question, go here (and be sure to book mark the page) to find answers to your compliance questions.

By Popular Demand: DocMagic's All State Disclosure Matrix

Thu, 04 Jan 2007 15:24:34 -0800

In response to customer demand, DocMagic’s Compliance Department has prepared a matrix that outlines the default disclosures found in DocMagic’s initial and closing packages for each state, plus the District of Columbia and the Virgin Islands. The matrix may be viewed in its entirety or on a per-State basis here.

New Ohio Disclosures

Thu, 04 Jan 2007 15:29:30 -0800

Pursuant to the enactment of Ohio S.B. 185, DocMagic’s Compliance Department has prepared ten (10) disclosures that a mortgage broker or licensee making loans in Ohio must provide to a borrower, effective on January 1, 2007. Eight (8) of the disclosures are based on model forms prescribed by the Ohio Attorney General or Financial Institutions Division of the Ohio Department of Commerce pursuant to Administrative Rules. As some of the Rules are not scheduled to become effective until early February, 2007, the form and content of some of the model disclosures are subject to change. DocMagic’s Compliance Department will update these disclosures accordingly should any of the Rules change. Following is a list of the newly created disclosures:

Ohio Prepayment Penalty Provisions Revised, Effective January 1, 2007

Thu, 04 Jan 2007 15:30:51 -0800

As a result of Ohio SB 185, the permissible prepayment penalty provisions in Ohio have been revised effective for loans closing on or after January 1, 2007, as follows:

Cleveland Predatory Lending Ordinance Ruled Unconstitutional

Fri, 15 Dec 2006 11:42:02 -0800

The Ohio Supreme Court has struck down the City of Cleveland's predatory lending ordinance, concluding that the stricter Cleveland lending ordinance conflicted with Ohio's statewide predatory lending statutes. A copy of the court's decision is available here. As a consequence, we are removing three disclosures and notices from our Ohio plan build that pulled whenever the property city was Cleveland - Ohio Certification (OHC.MSC); HUD Approved Housing Counselors in Ohio (OHHUDA.MSC), and Important Notice to Customers of Home Improvement Contractors (OHIN.MSC). Please contact DocMagic's Compliance Department if you have any questions.

Federal Reserve Board Increases Section 32 Points and Fees Dollar Threshold for 2007

Thu, 04 Jan 2007 12:35:41 -0800

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. By 2006, the dollar amount threshold had reached $528. In a final rule and commentary published on August 9, 2006, the FRB announced that effective January 1, 2007, the dollar amount threshold will be increased to $547. As a practical matter, the fixed dollar amount threshold of $547 will apply only if a loan's total loan amount is less than $6,837.50.

High Cost Updates: Ohio

Thu, 04 Jan 2007 12:52:22 -0800

This month we add information regarding the Ohio Predatory Lending Act, which becomes effective for all loans with a closing date on or after January 1, 2007. In our August, 2006 issue, we added information regarding the Rhode Island Home Loan Protection Act, which becomes effective on December 31, 2006. And, in our July, 2006 issue, we added information regarding the Tennessee Home Loan Protection Act, which becomes effective on January 1, 2007. Please visit our Predatory Lending page to review these and other high-cost memos that have already been posted on the Compliance page of our website.

No Changes to 2007 Conforming Loan Limits

Thu, 04 Jan 2007 14:43:51 -0800

Both Fannie Mae and Freddie Mac have announced that conforming loan limits for first lien-loans will remain unchanged for 2007:

New Jersey Increases Maximum Principal Loan Amount Subject to High Cost Act

Fri, 15 Dec 2006 11:58:25 -0800

The New Jersey Home Ownership Security Act of 2002 (the "Act") provides for annual review and adjustment to the maximum principal amount of a loan that may be subject to the Act. For 2006, only loans with principal loan amounts not exceeding $383,682.60 are subject to the Act. For 2007, the maximum principal amount of a loan that may be subject to the Act has been increased to $400,001.50. Loans with principal amounts exceeding that figure will not be subject to the Act's provisions. The revised amount is effective for all applications received by a lender on or after January 1, 2007. To view a copy of the New Jersey Department of Banking and Insurance Bulletin 06-25, click here. Please contact the DocMagic Compliance Department if you have any questions or comments.

Fannie Mae Extends Effective Date of Amendments in Announcement 06-04

Thu, 04 Jan 2007 15:45:32 -0800

In Announcement 06-23: HOEPA Mortgages and Mortgages with Excessive Fees (12/05/06), Fannie Mae postponed the effective date of the amendments to the Fannie Mae Single-Family Selling Guide contained in Announcement 06-04 from June 1, 2006 to January 1, 2007. Ann. 06-04 amended Part VII, Section 104.11 and Part VII, Section 104.15 of the Selling Guide.

Leasehold Provisions Added to Fannie Mae Security Instruments

Thu, 04 Jan 2007 15:56:04 -0800

Please note that the article published in the October, 2006 issue of The Compliance Wizard has been revised to indicate the leasehold provisions that were added to Section 9 in New York and Maine's "plain language" mortgages, entitled "Lender's Right to Protect Its Rights in the Property." You may view the updated article by clicking here.

Junior-Lien Balloon Notes and Riders for Colorado, Indiana and Utah

Thu, 04 Jan 2007 15:57:47 -0800

DocMagic's Compliance Department has prepared balloon notes and riders that comply with the Consumer Credit Code applicable in Colorado, Indiana and Utah. These balloon notes and riders will default whenever a DocMagic user selects a junior-lien balloon loan program where the secured property is located in any one of these states and the property is either owner-occupied or a second home. Note than an investor-specific loan program may have that investor's own balloon note. If the investor has not provided its own balloon rider, then DocMagic's balloon rider will return in the package.

New Form: Nevada Cover Page

Thu, 04 Jan 2007 16:00:43 -0800

Section 3 of A.B. 334, which was approved by Nevada's Governor on June 17, 2005 and codified as Nevada Revised Statute Section 239B.030, becomes effective on January 1, 2007. Section 239B.030 provides, among other things, that a person shall not include, and a governmental agency shall not require, the social security number of a person on any document that is recorded, filed or otherwise submitted to the governmental agency on or after January 1, 2007. Section 239B.030 also authorizes a governmental agency to require a person to provide an affirmation statement that the document does not contain the social security number of any person when submitting a document for recording, filing or submission to that agency. Section 239B.030 further provides that if a governmental agency requires an affirmation statement, it may refuse to record, file or otherwise accept a document which does not contain such statement when required and any document which contains the social security number of a person.

New Form: California Automated Valuation Model Notice

Thu, 04 Jan 2007 15:58:49 -0800

Beginning on January 1, 2007, California Financial Code Section 22317.2 will authorize a California finance lender to collect a fee for an automated valuation model ("AVM ") result prepared by a third party as long as the fee does not exceed the actual cost paid to the third party for the written AVM result in lieu of an appraisal. A borrower may not be charged for both an AVM result and an appraisal for the same property in a single transaction. Only one fee for providing an AVM result or an appraisal for the same real property may be collected, unless the borrower has obtained a new or additional loan and more than one year has elapsed since the prior delivery of the AVM result or appraisal. If a fee has been paid, another fee for an appraisal may be imposed within one year if the borrower has obtained a new or additional loan and if the amount paid for the AVM is subtracted from the appraisal fee.

Investor Updates

Thu, 04 Jan 2007 16:05:18 -0800

When processing a Greenpoint plan in DocMagic recently, you may have noticed an audit advising that the plan code you were using has been updated and that you need to download a new plan. As Greenpoint has modified many of their notes, riders and disclosures, Document Systems, Inc. has updated many programs and modified it's plan codes to match Greenpoint's programs, effective as of December 8, 2006. The revised loan program of GreenPoint Mortgage Funding, Inc. have been posted to the Investor Updates page of the Compliance section of DocMagic's website. You may also view other investors' loan programs by visiting our Investor Updates page.

At Your Service: MERS Registration Via DocMagic Online

Thu, 04 Jan 2007 16:30:57 -0800

To successfully register your loan with MERS via DocMagic Online, it is important that you first complete three (3) steps. First, you must register with MERS and receive a MERS Organization ID number. Second, the ID number must be activated by a MERS integration representative. Finally, you must add DocMagic as an authorized MERS vendor on MERS' website. This last step is outlined on our website here.

New/Revised Documents - Nov/Dec 2006

Thu, 16 Nov 2006 13:44:23 -0800

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, 2006. There were no new forms created or modified in November, 2006.

Document Preparation Fee Matrix

Fri, 10 Nov 2006 14:30:46 -0800

Ever wonder whether a document preparation fee may be charged to a borrower in a particular state? Or whether a particular state has any restrictions on who may prepare certain closing documents? Wonder no more…The Compliance Department is adding another compliance tool to its Compliance page to further serve its customers. The Department has prepared a matrix that answers these very questions for each of the 50 states, plus the District of Columbia, and provides citations to applicable law. Let the Compliance Department know what you think of the matrix!

Here is the matrix: Document Preparation Fee Matrix.

Late Fee Addendum to Be Included in Alabama First-Lien Closing Packages

Fri, 10 Nov 2006 14:24:55 -0800

Currently, the default late charge for Alabama first-lien loans is 5% of the unpaid installment if payment is not made within 15 days from its due date. The DocMagic software defaults to this late charge based on a provision of the Alabama's Interest and Usury Statute that the late charge may be freely negotiated between the parties as long as it is not unconscionable. See §§ 8-8-1 et seq.

Leasehold Provisions Added to Fannie Mae Security Instruments

Fri, 10 Nov 2006 13:54:33 -0800

To accommodate those customers whose loans are secured by a leasehold estate, Document Systems, Inc. ("DSI's") has added the following provisions as the second sentence of the last paragraph in Section 9, entitled "Protection of Lender's Interest in the Property and Rights Under this Security Instrument," of the Fannie Mae security instruments:

Borrower shall not surrender the leasehold estate and interests herein conveyed or terminate or cancel the ground lease. Borrower shall not, without the express written consent of Lender, alter or amend the ground lease.
read more

DocMagic Offers Free Training Sessions

Fri, 10 Nov 2006 13:50:37 -0800

Document Systems, Inc. now offers you the opportunity to participate in a WebEx training session with a live trainer. Allow us to take you on a personal tour of the DocMagic features that provide the best solutions for your unique loan document production and delivery needs.

Investor Updates

Fri, 10 Nov 2006 13:33:51 -0800

This month DSI posts loan programs of Chevy Chase Bank, Sovereign Bank - Wholesale and The Winter Group on its Compliance page. Find out the description of each investor's loan programs, 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 Compliance page.

At Your Service: Approval of Texas Plain Language Documents

Fri, 10 Nov 2006 13:07:09 -0800

A contract for a loan under Chapter 342 of the Finance Code (i.e., a secondary mortgage loan with an effective rate of greater than 10 percent) or a home equity loan regulated by the Texas Office of Consumer Credit Commissioner ("OCCC") must be written in "plain language." In accordance with these Plain Language Contract Rules, the OCCC provides model notes and security instruments for second lien home equity loans and second lien purchase money loans. Because the lender must use the OCCC model forms, DSI provides these in the following generic plan codes:

1_TX1 Texas Purchase Money Homestead or Second Home
1_TX5 Texas Homestead Cash-Out or Refi With Cash-Out
read more

Tech Tip of the Month: Enhancement to DocMagic's Plan Selection Filter

Fri, 10 Nov 2006 12:48:42 -0800

Document Systems, Inc. (DSI) has added another enhancement to DocMagic's Plan Selection Filter. DSI has revised the "Add a Program" feature to allow DocMagic users to view loan programs and investors that currently exist in the user's DocMagic system in black text and loan programs and investors that the user currently does not have in red text.

New/Revised Documents - October 2006

Fri, 10 Nov 2006 12:39:03 -0800

New Borrower Type: Non-Title Spouse, Part II

Mon, 25 Sep 2006 09:56:56 -0700

To complement our prior article, we're providing a state-specific summary matrix of the following topics: homestead rights, community property rights, and when a Non-Title Spouse's ("NTS'") signature may be appropriate. Please be aware that lenders and investors may have different requirements and this is not legal advice for your situation.

Refinance or Refinance/Increase: What's the Difference?

Mon, 25 Sep 2006 09:55:27 -0700

Within the DocMagic software (both DocMagic for Windows and DocMagic Online), users can select between various loan types, including "Refinance" and "Refinance/Increase." This raises the question as to what is the difference between these two loan types. The short answer is this: for closed-end loans, you should select the "Refinance/Increase" loan type only if you are the original creditor refinancing a transaction with the same borrower. When you select the "Refinance/Increase" loan type, the H-9 rescission model form should automatically be included in your loan package. In all other cases, select the "Refinance" loan type and the H-8 rescission model form should automatically be included in your loan package. Of course, you should always check your loan packages to confirm you are receiving the appropriate rescission form. For additional information about rescission, visit: Reg. Z, §226.23. To view the model forms, visit: Appendix H to Part 226, Closed-End Model Forms and Clauses.

American Home Mortgage Purchases Union Federal

Mon, 25 Sep 2006 09:54:50 -0700

American Home Mortgage has purchased Union Federal. Thus, all Union Federal plans are rendered obsolete, and a DocMagic user will no longer be able to select any Union Federal loan plans. DocMagic users must now download and/or use loan plans containing the investor code "AH2." However, if, for any reason, a DocMagic user would need applicable loan documents to reflect Union Federal's name and address, then "UF" must be entered in the "Transfer To" field under the "General" tab in DocMagic for Windows or DocMagic Online.

Freedom Mortgage Corporation Purchases Irwin Mortgage

Mon, 25 Sep 2006 09:54:04 -0700

Freedom Mortgage Corporation has purchased Irwin Mortgage Corporation. As all loans funded on September 18, 2006, and after must now reflect Freedom Mortgage's address, Irwin Mortgage plans have been modified accordingly. If, for any reason, a DocMagic user would need applicable loan documents to reflect Irwin's name and address, then "IN6" must be entered in the "Transfer To" field under the "General" tab in DocMagic for Windows or DocMagic Online.

DSI's Super Athletes

Mon, 25 Sep 2006 09:53:06 -0700

Among the many hard-working employees at Document Systems, Inc. ("DSI") are some super athletes who use their spare time to train in their respective sport and compete at a high level. Following is a summary of the latest achievements of four (4) of DSI's super athletes.

Investor Updates

Mon, 25 Sep 2006 09:49:26 -0700

This month DSI posts loan programs of American Home Mortgage Services Inc., Impac Funding Corporation, and Option One Mortgage Corporation on its Compliance page. Revisions have also been made to the matrixes of Bear Stearns, Countrywide, and New Century to reflect loan programs that have been either added or deleted by the respective investor. Find out the description of each investor's loan programs, 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 Compliance page.

Maryland Security Instruments Updated

Mon, 25 Sep 2006 09:40:56 -0700

To comply with document recording requirements in Montgomery County pursuant to Maryland Code, Real Property, §3-501, all Maryland security instruments have been updated to include the borrower's address and the name of the title insurer insuring the instrument, if any. While the borrower's address will appear in all security instruments, the title insurer's name will appear only if the property securing the loan is located in Montgomery County. To view the list of the Maryland security instruments, please visit our Forms Updates for August 2006.

New/Revised Documents - September 2006

Mon, 25 Sep 2006 09:36:42 -0700

Illinois Predatory Lending Database Pilot Program

Wed, 20 Sep 2006 10:24:38 -0700

The long-delayed Illinois Predatory Lending Database Pilot Program (the "Pilot Program") is delayed no more. The Illinois Department of Financial and Professional Regulation (the "IDFPR") has announced September 1, 2006 as the inception date for the four-year Pilot Program created by House Bill 4050 that was signed into law in July, 2005. The requirements of the Pilot Program are complex and require careful review. A short description of the Pilot Program together with a number of links to helpful information and a description of a new DocMagic audit follow.

New Borrower Type: Non-Title Spouse, Part I

Wed, 20 Sep 2006 10:27:27 -0700

DocMagic recently added a new borrower type, "Non-Title Spouse," to accommodate the scenario when a non-borrowing spouse is not on title but is still required to agree to the security interest in the property. The difference between "Non-Title Spouse" and "Title Only" is that in the latter, the individual is actually on title. The "Non-Title Spouse" is not on title but may have a community property or other marital interest in the property.

High Cost Updates: Rhode Island

Wed, 20 Sep 2006 10:40:36 -0700

This month we added information regarding the Rhode Island Home Loan Protection Act, which becomes effective on December 31, 2006. Please visit our Predatory Lending page to review this and the other high-cost memos that have already been posted on the Compliance page of our website.

Required Witnesses for a Mortgage or Deed of Trust

Wed, 20 Sep 2006 10:42:59 -0700

The Compliance Department at Document Systems, Inc. ("DSI") continually strives to provide DocMagic customers with compliance tools. To that end, the Department has created a matrix that sets forth whether or not witness signatures are required on security instruments for each state, plus the District of Columbia. In addition, the matrix includes: (a) detailed explanation as to whether or not witness signatures are required; and (b) a citation to the applicable statutes and/or case law. We have even gone a step further and included what Fannie Mae's authorized changes are with regard to witness signatures and described whether or not these witness lines are present in DSI's 1st lien security instruments.

Document Systems, Inc. Hires New Employees

Wed, 20 Sep 2006 10:45:49 -0700

In an effort to continually serve its customers, Document Systems, Inc. ("DSI") has hired a number of new employees in many of its departments this past year. As DSI has acquired a number of new accounts, Edylaine Mascardo and Trisha Espe have joined the Customer Service Department to enable the Department to better handle the growing number of daily customer service inquiries. The Technical Support Department has hired Robert Hoffman to assist with technical support inquiries. Tawny Matau is a new addition to the In-House Department to assist with the fulfillment of an increasing number of predisclosure as well as closing packages. Howard Hoagland and Maple Moriji have joined the Software Development team. Gina DeRuise, Juliet Henry-Okonkwo, Philip Reese, and Michelle Alonzo familiarize prospective customers with the DocMagic and LoanMagic products and set up new customers in the New Accounts/Set-Up Department. Alice Gastelum is a new member of the Forms Template Department. And, last but not least, Mark Delgadillo joined the Compliance Department as a paralegal, and Edna Guevara was hired as its legal assistant.

DSI is proud to have these new members on its team!

Investor Updates

Wed, 20 Sep 2006 10:49:11 -0700

This month DSI posts loan programs of NovaStar and WMC Mortgage on its Compliance page. Revisions have also been made to the matrixes of Bear Stearns, Countrywide, EMC Mortgage, and New Century to reflect loan programs that have been either added or deleted by the respective investor. Find out the description of each investor's loan programs, 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 Compliance page.

At Your Service: New Form - Utah Waiver Of Right To Participate In Class Action

Wed, 20 Sep 2006 10:57:43 -0700

Effective March 15, 2006, the Utah Consumer Credit Code was amended by Utah Senate Bill 252, enabling borrowers to waive their rights to participate in a class action related to a closed - or open - end consumer contract. To contract for the waiver, the lender must disclose the waiver to the borrower in the contract. However, beginning with a closed-end or open-end consumer contract entered into on or after August 1, 2006, the lender must make the disclosure in bold type or all capital letters.

Tech Tip of the Month: DocMagic's Plan Selection Filter

Wed, 20 Sep 2006 11:06:18 -0700

DSI has added another enhancement to DocMagic - the Plan Selection Filter. This enhancement enables DocMagic users to search loan programs faster than ever before. With competition in the mortgage industry heating up, lenders have been forced to offer a greater number of loan program types to facilitate the needs of an increasingly diverse customer base. With more loan programs to choose from, selection of the correct loan program at document processing time can become time consuming and error prone.

New/Revised Documents - August 2006

Wed, 20 Sep 2006 11:16:33 -0700

New Massachusetts Borrower Interest Audit

Mon, 24 Jul 2006 11:20:54 -0700

Under applicable Massachusetts law (M.G.L. c. 183, Section 28C; 209 CMR 53.00; links are here and here, respectively), a lender may not make a home loan if that home loan pays off all or part of an existing home loan that was consummated within the prior sixty (60) -- month period; unless, the new home loan is in the "borrower's interest." A "home loan" is defined as essentially any consumer purpose loan repayment of which is secured by a 1- to 4-family owner-occupied dwelling.

Late Fee Dollar Amounts Updates

Mon, 24 Jul 2006 11:22:23 -0700

The DocMagic System has been updated to reflect the July 1, 2006, increased late fee dollar amounts for loans made under the consumer credit codes in Indiana, Minnesota, Oklahoma and South Carolina. The following changes were made: (i) Indiana late fee dollar amount was $16.50, changed to $ 17.00; (ii) Minnesota late fee dollar amount was $6.24, changed to $6.86; (iii) Oklahoma late fee dollar amount was $20.00, changed to $20.50; and (iv) South Carolina maximum late fee dollar amount was $14.50, changed to $15.50, and minimum late fee dollar amount was $5.80, changed to $6.20.

High Cost Updates: Tennessee

Mon, 24 Jul 2006 11:24:19 -0700

This month we add information regarding the Tennessee Home Loan Protection Act, which becomes effective on January 1, 2007. Please visit our High Cost/Predatory Lending Page to review this and other high-cost memos that have already been posted on the Compliance page of our website.

Indiana House Bill 1114 Results in Change to Indiana Mortgage

Mon, 24 Jul 2006 11:25:52 -0700

As of July 1, 2006, many of our customers originating loans in Indiana may have noticed the following statement at the end of the mortgage:

I affirm, under the penalties for perjury, that I have taken reasonable care
to redact each Social Security number in this document, unless required by law.

__________________
Signature of Preparer

Balloon Payment Disclosure

Mon, 24 Jul 2006 11:26:51 -0700

Document Systems, Inc.'s generic Balloon Payment Disclosure has been updated. The most significant change is that the sentence, "This loan was amortized over a ____ month period," has been added at the end of the first paragraph of the Disclosure. The defined term of "'Balloon Payment' amount", which was a parenthetical in the first paragraph, was also deleted as it was determined to be superfluous.

Investor Updates

Mon, 24 Jul 2006 11:29:21 -0700

This month DSI posts loan programs of ABN AMRO Mortgage, SunTrust Mortgage, and Wells Fargo 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. Visit our Compliance page next month to see other investors' loan programs.

At Your Service: New Feature: Default Payment Calculator

Mon, 24 Jul 2006 11:31:48 -0700

Document Systems, Inc. ("DSI") has added a new enhancement to DocMagic: when a Loan Program is loaded that has a Default Payment Rate feature, clicking on the calculator button next to the "Monthly Payment" field will allow the DocMagic user to insert the payment rate so that the resulting monthly payment will be automatically computed. Only certain Negative Amortization Hybrid ARM Loan Programs will have this feature.

New/Revised Documents - July 2006

Fri, 28 Jul 2006 00:00:00 -0700

Newly Implemented Audits

Thu, 22 Jun 2006 12:52:46 -0700

The DocMagic "Goof Proof" audit system is an extremely popular feature with DocMagic software users. We are constantly adding to our already extensive audit database to accommodate regulatory changes, investor requirements and lender/broker preferences. In this article, we highlight two recent audits that we have recently added.

Massachusetts Disclosures Deleted, Modified

Fri, 23 Jun 2006 11:25:41 -0700

As a result of the repeal of Massachusetts General Laws, Chapter 184, Sections 17C and 17D, which becomes effective on July 1, 2006, a number of disclosures will no longer be required for those lenders and brokers originating loans secured by property located in the state of Massachusetts. Those disclosures are as follows:

MERS Loan Registration Now Available on DocMagic for Windows

Mon, 26 Jun 2006 13:36:59 -0700

Over the last couple of issues of The Compliance Wizard, we reported that DocMagic Online users could register a loan directly with MERS without the need to input additional information. With DocMagic for Windows' (DMW's) recent Release Version 8.04.8, DMW users may now also register their loans directly with MERS. Like magic, loan-specific information can now automatically be transferred to MERS through DMW, ensuring accuracy of the MERS-specific information and enhancing efficiency with document preparation.

New DocMagic HELOC Balloon Programs for Wells Fargo and HSBC (Subprime)

Mon, 26 Jun 2006 13:38:13 -0700

The following plan codes are now available:

Investor: HSBC (Subprime), Investor Code: HFS,
Plan Code: H5HFS, Description: HELOC SUBPRIME I/O, 10YR DRAW, 0YR REPAY
Plan Code: H6HFS, Description: HELOC SUBPRIME 3MO TEASER I/O, 10YR DRAW, 0YR REPAY
Plan Code: H7HFS, Description: HELOC SUBPRIME I/O, 15YR DRAW, 0YR REPAY
Plan Code: H8HFS, Description: HELOC SUBPRIME 3MO TEASER I/O, 15YR DRAW, 0YR REPAY

If you require assistance downloading these plan codes, please contact our Customer Service Department, at (800) 649-1362.

VMP 75 Series Notes and 76 Series Security Instruments

Mon, 26 Jun 2006 13:39:38 -0700

The VMP 75 and 76 Series documents are now available in IndyMac's and Long Beach Mortgage's DocMagic document packages. At this time, these documents are not available for use in any other loan packages.

Investor Updates

Mon, 26 Jun 2006 13:40:28 -0700

This month DSI posts loan programs of J.P. Morgan Chase Bank, N.A. (Correspondent),
Chase - Wholesale Division, Decision One and Long Beach Mortgage 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. Visit our Compliance page next month to see other investors' loan programs.

DocMagic Invoices Now Available Electronically

Mon, 26 Jun 2006 13:48:59 -0700

Electronic invoices for DocMagic's services are now available! To receive DocMagic’s invoice via email, simply email the following information to accounting@docmagic.com:

Customer ID:
Company Name:
Contact Name:
Email Address:

You may include more than one invoice recipient by adding the recipients’ contact name and email address. All you need is Adobe Reader® to view the electronic invoice.

DocMagic Generic HELOC Plan Codes

Thu, 13 Jul 2006 14:56:52 -0700

Quick and convenient access to your own HELOC plan code is now available in the DocMagic software. These plans offer the most popular HELOC terms and are available at no additional charge.

At Your Service: Entering the Name of Inter Vivos Revocable Trusts

Sun, 23 Jul 2006 13:52:26 -0700

In last month's article, we provided detailed instructions on Document Systems, Inc.'s ("DSI's") latest software enhancement to DocMagic that accommodates the situation where an inter vivos revocable trust ("revocable trust") is the borrower under a loan. As a supplement to those instructions, please note that if the word "The" is in the name of a revocable trust, the DocMagic user must enter this word in the "Corp/Trust Name" field of the Borrower tab of the worksheet. For example, if the official name of a trust is "The Nascar Family Trust Under Trust Instrument, dated February 14, 1959," you must input the word "The" before "Nascar Family Trust, etc." in the "Corp/Trust Name" field.

New/Revised Documents - June 2006

Mon, 24 Jul 2006 00:00:00 -0700

Fannie Mae Amends Selling Guide Regarding HOEPA Mortgages and Mortgages With Excessive Fees

Fri, 02 Jun 2006 14:38:06 -0700

It has been Fannie Mae’s stated policy for quite some time now not to purchase or securitize any mortgage where total points and fees exceed five percent of the mortgage amount, or any mortgage loan that is subject to the requirements of the Home Owner Equity Protection Act of 1994 (“HOEPA”). In an announcement dated April 14, 2006, Fannie Mae is, in its own words, “now expanding its policy prohibitions to include certain mortgage purchase eligibility requirements based on housing goals regulations issued by [HUD] to which Fannie Mae is subject,” effective for all loans delivered to Fannie Mae on or after June 1, 2006.

MERS Loan Registration Now Available on DMO

Fri, 14 Jul 2006 09:34:21 -0700

Are you tired of re-keying loan information to register your loan with MERS when using the DocMagic Online (DMO) software? With DMO's current Release Version 3.30, a solution is immediately available to you. DocMagic and MERS now have an XML interface, enabling the DMO user to register a loan directly with MERS by selecting "Register MERS Loan" in the Document Processing Screen of DMO. No additional inputting is required. Like magic, loan-specific information is automatically transferred to MERS through DMO, ensuring accuracy of the MERS-specific information and enhancing efficiency with document preparation.

New Century Audit

Mon, 26 Jun 2006 14:46:44 -0700

The DocMagic audit system has been updated recently to calculate the New Century and Home 123 (collectively, “New Century”) limitation on maximum points and fees. It is New Century’s policy not to accept loan submissions where any combination of points and fees exceed either 5% (excluding rebate) or 6% (including rebate) of the loan amount. These rules are intended to be read in conjunction with both federal and state high cost loan limitations and do not supersede any more stringent federal or state high cost loan restrictions. “Points and fees” are defined as the total prepaid finance charge minus both per diem interest and up to two (2) bona fide discount points. The audit will run whenever a New Century loan plan is selected. Please contact a Customer Service representative if you have any questions regarding this audit.

Investor Updates

Mon, 26 Jun 2006 14:47:54 -0700

This month DSI posts loan programs of Credit Suisse First Boston, Flagstar Bank, and Netbank 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. Visit our Compliance page next month to see other investors’ loan programs.

DSI's Employee of the Year - Brenda Jurado

Fri, 14 Jul 2006 09:42:17 -0700

She is an inspiration to everyone at Document Systems, Inc. (“DSI”), always chasing opportunities to serve. Her service transcends departmental lines at DSI, and, by now, everyone knows she serves with speed, a warm smile, and confidence. I’m talking about Brenda Jurado, DSI’s Employee of the Year for 2006. Before receiving this distinguished honor, Brenda was awarded Employee of the Quarter Award and numerous “On-the-Spot” recognitions in past years.

DocMagic Invoices Now Available Electronically

Mon, 26 Jun 2006 14:49:47 -0700

Electronic invoices for DocMagic's services are now available! To receive DocMagic’s invoice via email, simply email the following information to accounting@docmagic.com:

Customer ID:
Company Name:
Contact Name:
Email Address:

You may include more than one invoice recipient by adding the recipients’ contact name and email address. All you need is Adobe Reader® to view the electronic invoice.

At Your Service: New Software Enhancement for Inter Vivos Revocable Trusts

Sat, 22 Jul 2006 09:45:52 -0700

This month Document Systems, Inc. (“DSI”) has added a software enhancement to DocMagic to accommodate a situation where an Inter Vivos Revocable Trust (“revocable trust”) is the borrower under a loan. Enhancements to DocMagic are consistent with Fannie Mae guidelines in that the signature block (where the trustee is also the settlor/grantor/trustor) in the promissory note and addenda would read like so:

Tech Tip of the Month: DocMagic's Plan Selection Filter

Fri, 21 Jul 2006 13:54:53 -0700

New/Revised Documents - May 2006

Sat, 22 Jul 2006 16:59:19 -0700

The Secret to New Business: Finessing Old Business

Fri, 21 Jul 2006 12:27:07 -0700

Reprinted from the July 2005 issue of Scotsman Guide Residential Edition, with permission from Scotsman Publishing, Inc.

In most businesses, the key to success lies in getting repeat business from your customers and from the new customers these satisfied patrons refer. In the mortgage business, repeat business accounts for less than 10 percent of the loans the average lender writes - a statistic guaranteed to strike fear into the hearts of even the most stalwart marketing executives.

High Cost Updates: New Jersey

Mon, 26 Jun 2006 15:46:41 -0700

This month, we added information regarding the New Jersey Home Ownership Security Act of 2002. Please visit our High Cost/Predatory Lending page to review this and the other high-cost memos that have already been posted on the Compliance page of our website.

Predatory Lending Update and Summary

Mon, 26 Jun 2006 15:54:26 -0700

There is now a memo posted online describing how DocMagic performs its high cost calculations for all states that have some form of predatory/high cost statute or regulation in effect. These states are (some of the memos must be updated to reflect recent upgrades to the DocMagic software products):

Corporate Assignment Forms: Original Principal Amount Added

Mon, 26 Jun 2006 15:57:39 -0700

Due to customer requests, the DocMagic Corporate Assignment forms have been updated to include the following verbiage above the signature lines: "The original principal amount due under this note(s) is $[loan amount]." This language appears above the signature lines.

Investor Updates

Mon, 26 Jun 2006 16:01:41 -0700

This month DSI posts loan programs of Residential Funding Corporation, New Century, and Encore Credit Corporation on its Investor Updates 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. Visit our Investor Updates page next month to see other investors' loan programs.

Updated Countrywide HELOC Agreements

Mon, 26 Jun 2006 16:03:19 -0700

Countrywide has updated all of their HELOC agreements, as follows:

Interview with Don Iannitti, Part III

Fri, 21 Jul 2006 12:51:30 -0700

In Part I and Part II of my interview with Don Iannitti, President and CEO of Document Systems, Inc. (DSI), we learned about the impetus behind the birth of DocMagic and the technology that revolutionized an industry. In this final part of my interview, Don talks about the concept that guides his company.

At Your Service: MERS Loan Registration Now Available on DMO

Fri, 21 Jul 2006 13:11:49 -0700

Tech Tip of the Month: Password Security; E-Mail Read Receipt Added

Fri, 21 Jul 2006 13:17:05 -0700

Document Systems, Inc. ("DSI") is always looking for ways to improve service and security for our DocMagic customers. With this in mind, two new features have been added for customers that Leave Documents for Web (Internet) Pickup or E-mail [documents] to another location. The new options are located in the Security section of the Document Processing Options screen (see below).

New/Revised Documents - April 2006

Sat, 22 Jul 2006 00:00:00 -0700

Compliance: Danger in the Details

Fri, 21 Jul 2006 10:37:17 -0700

Executive Essay reprinted from the September 2005 issue of Mortgage Banking magazine (pp. 101-102), with permission from the Mortgage Bankers Association (MBA).

No lender makes high-cost loans. At least that is what every lender will tell you. And that is what every lender is hoping is true. Making a predatory loan in today's environment is the surest way to destroy a mortgage company. Even if a loan officer is successful in getting a borrower to sign the paperwork, the company can't sell it. No one in the market is securitizing these loans because the ratings agencies will not rate them. One of the primary reason companies do not want to make these loans is that it is extremely dangerous from a legal perspective.

High Cost Updates: California, Arkansas, Colorado, Connecticut, District of Columbia and Florida

Fri, 21 Jul 2006 10:41:15 -0700

This month, we added information regarding Fannie Mae/Freddie Mac's "points and fees" test and revise high cost information for California, Arkansas, Colorado, Connecticut, District of Columbia and Florida. Visit our High/Cost Predatory Lending Page, to review these and the other high-cost memos that have already been posted on the Compliance page of our website.

Conferences - Upcoming Events

Fri, 21 Jul 2006 10:43:28 -0700

March 29-April 1 -- Stop by our booth (Booth #239) at the MBA National Technology in Mortgage Banking Conference & Expo at the San Diego Convention Center in San Diego, CA.

Click here to view the 2006 Conference Schedule NOW!

Investor Updates

Fri, 21 Jul 2006 10:49:00 -0700

This month DSI posts loan programs of Aurora, and GreenPoint Mortgage Funding, Inc. on its Compliance page. Find out the description of each investor's loan programs, which promissory notes, prepayment riders and addenda are used, and what the rate caps and interest-only periods are for variable rate loans. Visit our Compliance page next month to see other investors' loan programs.

Interview with Don Iannitti, Part II

Fri, 21 Jul 2006 11:08:25 -0700

In the first part of my interview with Don Iannitti, President and CEO of Document Systems, Inc. (DSI), we learned about the impetus behind the birth of DocMagic. In this second part of my interview, Don goes on to describe the evolution of the DocMagic technology.

At Your Service: WI Prepayment Penalty Provisions Applicable to Variable Rate Loans

Fri, 21 Jul 2006 11:17:01 -0700

Change Effective March 25, 2006.

Current Wisconsin law prohibits the imposition of a prepayment penalty in connection with a variable rate residential mortgage loan using an approved index (for a list of approved indices, click here). That will change for variable rate, first lien loans secured by an owner-occupied one-to-four family dwelling or mobile home made on or after March 25, 2006. To view a copy of the 2005 Wisconsin Act 128 (2005 Assembly Bill 456) (codified as Wis. Stats. 138.056(3m)), click here. In order to impose a prepayment penalty on such loans, all of the following conditions must be satisfied:

Tech Tip of the Month: DocMaster's Changed Document Indication Feature

Fri, 21 Jul 2006 11:25:37 -0700

Have you ever changed data in a worksheet for DocMagic for Windows (DMW) or in a websheet for DocMagic Online (DMO) after having already processed the loan data the first time and wished that you could identify only those documents that were affected by your change? With a new enhancement to DocMaster, Document Systems, Inc.'s proprietary software for viewing and printing DocMagic's document sets, you may now readily identify those documents that have changed as a result of modified loan data and print only those documents.

New/Revised Documents - March 2006

Fri, 21 Jul 2006 11:28:03 -0700

Are Your Discount Points Bona Fide? Now the Choice is Yours

Thu, 20 Jul 2006 15:02:08 -0700

At DocMagic, we are constantly adding new features and enhancements in an effort to make our software products better. Today we are pleased to announce the addition of a "Bona Fide" discount point flag across our software product line. Read on to see what this means for you and your high-cost calculations.

Return of the 30-Year Treasury Bond Means High-Cost Changes

Thu, 20 Jul 2006 15:16:32 -0700

On February 9, 2006, the U.S. Treasury Department had its first sale of 30-year bonds, resurrecting a debt security that had been discontinued in February 2002. We'll leave it to the pundits to tell us what this means for investors, the deficit and the economy in general. For those of us who deal with predatory lending matters, the reintroduction of the 30-year bond will have an impact on high cost calculations beginning March 1, 2006.

California DOC Says YSPs NOT Included In Points and Fees Test

Thu, 20 Jul 2006 15:17:33 -0700

In a recently published release, the California Department of Corporations has concluded that under current law (specifically the decision in Wolski v. Fremont Investment & Loan (2004) 127 Cal. App. 4th 347), yield spread premiums are not part of points and fees under California's Covered Loan Law. We believe this is the first written statement by a California governmental agency regarding whether or not yield spread premiums are included as points and fees under California's Covered Loan Law.

To view a copy of the release, click here.

Investor Updates

Thu, 20 Jul 2006 15:20:46 -0700

This month DSI posts loan programs of Bear Stearns, EMC Mortgage Corporation, and Morgan Stanley on its Compliance page. Find out the description of each investor's loan programs, which promissory notes, prepayment riders and addenda are used, and what the rate caps and interest-only periods are for variable rate loans. Visit our Compliance page next month to see other investors' loan programs.

Interview with Don Iannitti, Part I

Thu, 20 Jul 2006 15:54:41 -0700

Customer Service Is Always # 1

Dominic ("Don") Iannitti, President and CEO of Document Systems, Inc. ("DSI"), could not emphasize enough that customer service is DSI's number 1 priority when I interviewed him recently to find out just how DSI got started. When I asked Don what his most successful achievement for DSI was, he responded:

"I think our most successful achievement is consistently providing superior customer service. Our goal is simple... complete customer satisfaction. Typically, companies say that but they don't accomplish it consistently. It's the companies that actually do, that do well and stand the test of time. That is the type of company we are and we are very proud of it."
read more

We Need Your Feedback

Thu, 20 Jul 2006 15:58:30 -0700

Currently, the following verbiage appears above the borrowers' signature in Maryland's first-lien notes:

THIS LOAN TRANSACTION IS GOVERNED BY TITLE 12, SUBTITLE 10 OF THE COMMERCIAL LAW ARTICLE OF THE ANNOTATED CODE OF MARYLAND.

Beginning March 15, 2006, the above verbiage will appear on all second-lien notes where the loan is made for a personal, household or family purpose and secured by owner-occupied real property. The Legal/Compliance Department at Document Systems, Inc. has made this decision based on the fact that most knowledgeable lenders making loans in Maryland elect to originate loans under Subtitle 10 (the Closed End Credit Provisions) instead of the more restrictive Maryland Secondary Mortgage Loan Law, MD COML §§ 12-401 et seq.

At Your Service: New Enhancements for Manufactured Housing and Cooperatives

Thu, 20 Jul 2006 16:02:23 -0700

This month Document Systems, Inc. ("DSI") added new enhancements to DocMagic that will enable the user to add more details if "manufactured housing," "manufactured housing/PUD," or "cooperative" is selected as the property type under the Property tab within DocMagic.

Tech Tip of the Month: Networking DocMagic for Windows

Thu, 20 Jul 2006 16:06:40 -0700

Have you ever wondered why multiple computers in your office can run DocMagic but you do not have the ability to see each other's data? Well this month's Tech Tip covers just that. The default installation for DocMagic for Windows is stored locally on your hard drive. Once DocMagic has been installed, you cannot share any data amongst other DocMagic for Windows users on other machines. This may result in significant time loss across all users when entering brokers, alternate lenders, service providers, loan reps, etc., into the systems database and can be otherwise avoided if DocMagic is installed instead on a shared network drive.

New/Revised Documents - February 2006

Thu, 20 Jul 2006 16:09:52 -0700

Don't Reprocess Worksheets; DocMagic's IRS Form 1098 Reporting Capabilities

Thu, 20 Jul 2006 12:01:19 -0700

We have been noticing that many of our customers have been re-processing worksheets that were previously processed in 2005 in order to obtain the necessary information to prepare IRS Form 1098. Save yourself the additional processing fee and instead use the reporting capabilities offered by DocMagic Online (DMO) or DocMagic for Windows (DMW). Obtaining a 1098 report via DMO and DMW is free.

FHA-Insured Condominium and Rehabilitation Loans Subject to Up-Front MIP

Thu, 20 Jul 2006 12:09:57 -0700

HUD issued its final rule on June 27, 2005, requiring up-front mortgage insurance premiums (UFMIP) on rehabilitation (Section 203(k)) and condominium mortgages (Section 203(c)) closed on or after January 1, 2006. Prior to January 1, an up-front premium was not required on these types of FHA-insured loans. Implementation of this rule is designed to keep FHA's rehabilitation and condominium loan programs in line with its single family housing (203(b)) program.

Investor Updates

Thu, 20 Jul 2006 12:13:35 -0700

Beginning with this month's issue, DSI will post on a monthly basis its largest investors' loan programs on its Compliance page and update them as program changes are made. Find out the description of each investor's loan program, which promissory notes, prepayment riders and addenda are used, and what the rate caps are for variable rate loans. This month, we post information about Countrywide, IndyMac Bank, and Washington Mutual Bank's loan programs. Visit our Compliance page next month to see other investors' loan programs.

Fannie Mae 2006 Maximum Loan Limit Increase Impacts High Cost Calculations

Thu, 20 Jul 2006 13:08:06 -0700

As you all are aware by now, Fannie Mae has increased their 2006 maximum loan limits. For a copy of Fannie Mae's announcement, click here. The increased Fannie Mae loan limits for 2006 are: $417,000 for a single unit dwelling, $533,850 for a 2-unit dwelling, $645,300 for a 3-unit dwelling, and $801,950 for a 4-unit dwelling. Many state high cost loan laws and regulations reference the Fannie Mae loan limits, usually in the form of a ceiling above which the state specific high cost loan provisions do not apply. Here is a quick and brief recap of the impact of Fannie Mae's maximum loan limit increases on state specific high cost calculations:

High Cost Updates: Illinois, Minnesota, and New Mexico

Thu, 20 Jul 2006 13:11:08 -0700

This month, we added additional high cost information for the states of Minnesota and New Mexico and update the high cost information for Illinois to incorporate information concerning the high cost ordinances in Cook County and Chicago. Please visit our High Cost/Predatory Lending Page to review these and the other high-cost memos that have already been posted on the Compliance page of our website.

We Need Your Feedback

Thu, 20 Jul 2006 13:16:46 -0700

The recently updated Uniform Residential Loan Application (Fannie Mae Form 1003) now has a section at the top of the form that enables the borrower and co-borrower to indicate their intention to apply for joint credit. This added section renders the use of Document Systems, Inc.'s Evidence of Joint Application (EOJA.MSC) form unnecessary or obsolete in those cases where the 1003 application form is used. However, because the 1003 application may not be used as the application for some types of loans (for home equity lines of credit, for example), we want to hear from you whether or not, and under what circumstances, our stand-alone form EOJA.MSC should be removed from loan packages.

2006 Conventions, Conferences, Trade Shows and Expos - Oh My!

Thu, 20 Jul 2006 13:19:45 -0700

Find the mortgage lending convention, conference, trade show and expo schedules in one location on DocMagic's website. Bookmark this page and check back often. We'll be updating this list throughout the year. Also, in future issues of The Compliance Wizard, we'll let you know which events we'll be attending so that you can stop by and say hello!

Terms, Notices and Conditions of Use

Thu, 20 Jul 2006 13:23:09 -0700

Document Systems, Inc. has posted its Terms, Notices and Conditions of Use of its website. Click Here to read them.

At Your Service: Texas Cash-Out Audit

Thu, 20 Jul 2006 14:38:31 -0700

Some customers have inquired into the meaning of the following audit:

[&TX_FEE_TEST]_________ FEES EXCEED 3% OF PRINCIPAL LOAN AMOUNT

The above audit pertains to Texas, cash-out, non-purchase money loans secured by owner-occupied properties and was implemented in response to customer requests.

Tech Tip of the Month: DocMaster's Features and Latest Enhancements

Thu, 20 Jul 2006 14:52:32 -0700

A new version of DocMaster has recently been released to all DocMagic users. This new version contains a number of enhancements to increase your productivity and make viewing, editing and printing your documents that are generated by DocMagic as easy as possible. Below is a brief list of these new features:

New/Revised Documents - January 2006

Thu, 20 Jul 2006 14:55:48 -0700