2008

DocMagic Adds Connecticut Nonprime Home Loan Audit

Fri, 01 Aug 2008 15:02:03 -0700

Connecticut has created a new category of loan, the so-called "nonprime home loan." The new law is contained in Connecticut Public Act 08-176 (the "Act"). Below is a description of the audit DocMagic is implementing to identify such nonprime home loans.

FHA Risk-Based Premiums Policy Implemented into DocMagic

Thu, 31 Jul 2008 11:42:32 -0700

Preliminary Note: According to Section 2133 of the Housing and Economic Recovery Act of 2008, beginning on October 1, 2008, and for a period of 12 months thereafter, a moratorium on FHA's implementation of its risk-based premiums policy, as described in ML 2008-16, will become effective. Accordingly, the contents of the article below apply only until September 30, 2008.

DocMagic Adds FHA LIBOR ARM Loan Programs

Thu, 21 Aug 2008 12:43:54 -0700

DocMagic, Inc.'s Compliance Department has added the following FHA LIBOR Loan Programs under "Generic Plans" as the "Investor" pursuant to Mortgagee Letter 2007-13:

DocMagic Uses Deed of Trust for New Mexico Uniform Instrument

Wed, 20 Aug 2008 18:14:10 -0700

As of the middle of August, 2008, the DocMagic software returns a deed of trust in a closing loan package for all non-FHA loans when New Mexico is the state in which the secured property is located. Both Fannie Mae and Freddie Mac will mandate on September 1, 2008, that a New Mexico deed of trust be used instead of a mortgage. DocMagic, Inc.'s Compliance Department changed the New Mexico Uniform Instrument from a mortgage to a deed of trust, as Fannie Mae and Freddie Mac documents are considered Uniform Instruments under DocMagic's License and User Agreement.

California DRE Amends Regulations, Updates DRE Forms 882, 883 and 885

Thu, 21 Aug 2008 13:30:37 -0700

The California Department of Real Estate (DRE) has amended its regulations, effective August 15, 2008, pertaining to DRE Forms 882, 883 and 885. The most obvious change to each one of these DRE Forms is the addition of an Informational Sheet. Please click here to access the text of the DRE's adopted changes and the updated versions of DRE Forms 882, 883, and 885.

Regulation Z Amendments Create New “Higher-Priced Mortgage Loans” Category

Wed, 20 Aug 2008 18:54:29 -0700

On July 30, 2008, the Board of Governors of the Federal Reserve Board (the "Board") published a final rule amending Regulation Z. The final rule, the main provisions of which do not become mandatory until October 1, 2009, is available here. The stated goals of the final rule are: (1) to protect consumers from unfair, deceptive and abusive lending and servicing practices; (2) to improve mortgage advertising; and (3) to provide consumers with disclosures early.

DocMagic Changes Default Print and Header Rules for Certain Loan Documents

Thu, 21 Aug 2008 13:48:49 -0700

Periodically, DocMagic, Inc.'s Compliance Department reviews its form selection, print, signature and header default rules for its core loan documents (i.e., documents returning in all closing loan packages) to determine whether the rules need updating based on new legal requirements, customary practice, or for other reasons. After a recent periodic review, the Compliance Department modified the print and/or header (the top of page 1 of the form identifying the borrowers, lender, loan number, etc.) default rules for certain core loan documents, because it was determined that lenders seldom request the forms identified below for those borrower types that were excluded from the rules. Changes to these default rules will be implemented in the coming weeks.

FIS Flood Services Changes Name to LPS National Flood

Wed, 20 Aug 2008 18:25:08 -0700

Effective September 1, 2008, FIS Flood Services is changing its name to LPS National Flood. The name change is being made in connection with the spin-off of Lender Processing Services, Inc. from Fidelity National Information Services, Inc. that was completed on July 2, 2008. We have been assured that there will be no service interruptions, key personnel changes, customer service center location changes or database location changes as a result of either the spin-off or the name change. In other words, with the exception of the name change and some changes in marketing materials, we expect that customers will continue to receive the same level of excellent service from LPS National Flood to which they have grown accustomed. For additional information about Lender Processing Services, Inc., click here. For additional information about LPS National Flood, click here.

Maryland Prohibits Prepayment Penalties

Wed, 20 Aug 2008 18:08:50 -0700

The article regarding Maryland's prohibition of prepayment penalties, originally published in the June, 2008 issue of The Compliance Wizard and updated in the July, 2008 issue, has once again been updated. To view the updated article, please click here. We thank Maryland attorney Marjorie A. Corwin, Esq., of Gordon, Feinblatt, Rothman, Hoffberger & Hollander, LLC, for her valuable input on this topic.

Investor Updates

Thu, 14 Aug 2008 12:28:50 -0700

This month DSI posts updates to the loan programs of CitiMortgage, Inc. (Correspondent Division), GMAC Bank, and SunTrust 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 by visiting our Investor Updates page.

At Your Service: Washington State Disclosure Updated Once Again; Two Disclosures Created

Thu, 21 Aug 2008 11:25:42 -0700

In our June, 2008 issue, we published an article about a new model disclosure prescribed by WAC 208-600-200, which was adopted, in draft form, pursuant to new Section 3(1) in Substitute House Bill 2770. Section 3(1) requires a separate, residential mortgage loan disclosure summary of all material terms to be provided to the borrower and, pursuant to Section 3(2), mandates that the Washington Department of Financial Institutions (DFI) adopt, by rule, a model mortgage loan summary disclosure meeting the requirements of Section 3(2).

New/Revised Documents - August 2008

Thu, 14 Aug 2008 11:54:23 -0700

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 2008.

U.S. Treasury Yields - August 2008

Thu, 14 Aug 2008 11:21:43 -0700

The U.S. Treasury security yield values for August 2008 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 2008.

Industry-Related Announcements/Newsletters – August 2008

Sun, 17 Aug 2008 12:43:34 -0700

To view this month's list of announcements or newsletters related to our mortgage industry, please click here.

High Cost Details Now Available

Fri, 11 Jul 2008 14:55:57 -0700

At DocMagic, we take great pride in the ability of our Section 32 and state-specific high cost tests to help keep our customers from making unsalable high cost loans. That being said, these high cost tests can be extremely complicated, and it is often difficult to figure out the impact a particular fee has on a specific high cost test. While we believe that the Section 32 and state-specific high cost memos we have posted online here, provide useful information and general guidance as to how our high cost tests are calculated, we also recognize that it would be highly beneficial if we could provide greater detail to our high cost test determinations. Accordingly, we are pleased to announce the addition of that greater level of detail to our high cost test display screens in DocMagic Online.

New Disclosures Required Under Ohio Second Mortgage Loan Act Regulations

Tue, 01 Jul 2008 12:28:26 -0700

Effective July 1, 2008, a couple of disclosures will be required as a result of amendments to the Ohio Administrative Code governing the Second Mortgage Loan Act.

Impact of Non-Borrower Paid Mortgage Broker Compensation on High Cost Loan Tests

Wed, 02 Jul 2008 19:10:11 -0700

In March 2008, we wrote an article here about the impact of mortgage insurance premiums on some state high cost loan tests. In May 2008, we wrote an article here about the treatment of discount points under various state high cost loan tests. In this article, we explore the impact of non-borrower paid compensation to a mortgage broker, including but not limited to yield spread premiums (YSPs) paid by a lender to a mortgage broker, on various state high cost loan tests.

Connecticut Prohibits Prepayment Penalties on High Cost Home Loans

Thu, 24 Jul 2008 12:22:14 -0700

Since July 1, 2008, the following audit has been appearing in all Connecticut high cost home loans if the DocMagic user enters any prepayment penalty information in DocMagic:

Wyoming Mortgage Broker Agreement Updated

Wed, 23 Jul 2008 13:58:31 -0700

Based on Senate File No. 44, which became effective on July 1, 2008, and amended W.S. Section 40-23-114, among other provisions of the Wyoming Residential Mortgage Practices Act, DocMagic, Inc.'s Compliance Department has updated the Wyoming Mortgage Broker Agreement (WYMBA.MSC), by adding the following to the Agreement:

eDisclosure Results in Cost Savings

Thu, 24 Jul 2008 14:07:38 -0700

In today's business climate when many in the mortgage industry are searching for more cost-cutting measures, DocMagic, Inc.'s eDisclosure product may offer one solution. Initial disclosures that need to be provided within 72 hours of a borrower submitting a completed application can be delivered electronically through eDisclosure, saving lenders and brokers significant preparation time and postage costs. For more information about eDisclosure, please visit here.

Maryland Prohibits Prepayment Penalties

Thu, 24 Jul 2008 14:09:44 -0700

Please note that last month's article regarding Maryland's prohibition of prepayment penalties has been updated. To view the updated article, please click here.

FHA Risk-Based Premiums

Fri, 11 Jul 2008 18:43:26 -0700

Updated: July 31, 2008 (Revisions are highlighted in yellow)

Please note that in response to FHA's risk-based upfront mortgage insurance premiums policy regarding one- to four-unit single family mortgages, DocMagic has made the necessary software programming enhancements. We will publish additional information regarding these enhancements shortly. Meanwhile, for more information, please refer to ML 2008-16. You may also find additional information, policy guidance, and FAQs on FHA's risk-based premiums policy here. Additional information regarding these enhancements may now be viewed here.

Indiana Closing Documents Notice and Disclosure Requirements Fail to Make Final Cut

Tue, 22 Jul 2008 11:15:09 -0700

We've received a number of inquiries regarding Indiana Senate Bill 62 (SB 62), which became effective on July 1, 2008. An early (not final) version of SB 62 included a requirement that a lender provide, together with the good faith estimates required under RESPA, a notice to the applicant stating that the applicant had the right (which could be waived) to receive the closing documents with respect to the loan at least 48 hours prior to closing. If the loan terms presented at closing differed from the loan terms presented in the earlier provided documents, then the prospective borrower was entitled to delay or reschedule the closing without penalty and without forfeiting the right to enter into the loan. Civil penalties of $25 per incident could also be assessed. Please note that the final, enrolled version of SB 62 deleted in their entirety these closing documents notice and disclosure provisions; in its final form, SB 62 deals strictly with Indiana's foreclosure sale requirements. To view a copy of the entire legislative history of SB 62, please visit here.

Document Systems, Inc. Named Top 50 Service Provider

Wed, 25 Jun 2008 17:07:13 -0700

Document Systems, Inc. (DSI) is proud to announce that Mortgage Technology Magazine has recognized it as one of the Top 50 Service Providers in 2008 in the mortgage lending industry. This marks the seventh (7th) consecutive year in a row that DSI has been named in the publication's annual listing of top service providers since the award's inception in 2002. To be eligible for this list, DSI had to demonstrate that it met the four (4) key criteria of (1) customer satisfaction; (2) functionality; (3) market share, and (4) a viable revenue model. More emphasis was placed on DSI's ability to provide a strong degree of functional value to mortgage lenders in the industry. The list of Top 50 Service Providers for 2008 may be viewed here.

Investor Updates

Thu, 24 Jul 2008 10:57:59 -0700

This month DSI posts updates to the loan programs of Everbank Mortgage Company and U.S. Bank, N.A. 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 by visiting our Investor Updates page.

At Your Service: Iowa Audit Removed from DocMagic

Mon, 07 Jul 2008 13:48:06 -0700

NOTE: DocMagic, Inc.'s Compliance Department has removed the below audit from the DocMagic software based on a conversation with Craig Christensen, Senior Examiner at the Iowa Division of Banking, regarding the interpretation of the phrase "A borrower may be charged by a lender ... a loan origination or processing fee, a broker fee, or both,..." Mr. Christensen clarified that although awkwardly written, the Division of Banking interprets the foregoing provision as permitting all three types of fees - an origination, processing fee and broker fee - as long as the sum total of these fees does not exceed two percent of the loan principal amount, or one percent of the unpaid balance of the loan if that loan is being assumed or refinanced.

New/Revised Documents - July 2008

Wed, 23 Jul 2008 09:34:23 -0700

Industry-Related Announcements/Newsletters – July 2008

Thu, 24 Jul 2008 13:49:38 -0700

Beginning with our July 2008 issue, we will be posting on our Compliance page various industry-related announcements and newsletters that we think may be of interest to you. To view this month's list of announcements or newsletters, please click here.

U.S. Treasury Yields - July 2008

Thu, 24 Jul 2008 11:03:03 -0700

The U.S. Treasury security yield values for July 2008 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 August 2008.

New Washington State Disclosure: Basic Facts About Your Mortgage Loan

Wed, 18 Jun 2008 12:14:43 -0700

Pursuant to new Section 3(1) in Substitute House Bill 2770, DocMagic, Inc.'s Compliance Department has laid out a residential mortgage loan disclosure summary that has been prescribed by the Washington Department of Financial Institutions (DFI) as a model form. This model form, dated May 22, 2008, is entitled "Basic Facts About Your Mortgage Loan." DocMagic's file name for this disclosure is WABFAYML.MSC.

New Illinois Law Prompts New Disclosures; Changes Prepayment Penalty and Predatory Lending Database Program

Fri, 06 Jun 2008 17:40:05 -0700

With the passage of Senate Bill 1167, enrolled as Public Act 095-0691, the Predatory Lending Database Program ("Program), which originally started as a pilot program and covered only certain areas of Cook County, Illinois, has been modified in certain respects. In addition, SB 1167 adds restrictions and prohibitions with respect to how lenders and brokers may originate and broker loans in Illinois. As SB 1167 makes sweeping changes, this article addresses only those portions of the Bill that affect new disclosure requirements which became effective June 1, 2008, and DocMagic, Inc.'s audit regarding the Program.

Illinois Predatory Lending Database Program Operational July 1, 2008

Wed, 18 Jun 2008 10:08:34 -0700

Some three years after initially adopted, the oft-delayed and subsequently amended Predatory Lending Database Program established within Cook County, Illinois becomes operational on July 1, 2008. As the name suggests, within ten (10) days after taking a mortgage application brokers and originators must input certain required borrower and loan-related information into a database. Within seven (7) days after receipt of that information, the Illinois Department of Financial and Professional Regulation (IDFPR) must determine whether to recommend housing counseling by a HUD-approved counselor. Counseling is required if the borrowers are all first-time homebuyers. In addition, counseling is required if the borrower is refinancing a primary residence and the loan includes one or more of the following features: (a) interest only payments; (b) negative amortization; (c) total points and fees paid by the borrower exceed 5%; (d) the loan includes a prepayment penalty; or (e) the loan is an ARM. The borrower may not waive required counseling. Additional procedures and timeframes are included to accommodate changes in loan or commitment terms. The borrower then has ten (10) days within which to complete counseling, and the counselor has seven (7) days to input that information into the database. Reasonable and customary costs of counseling up to $300 must be paid by the broker or originator. Within ten (10) days after closing a loan, the title company or closing agent must submit required information to the database. Finally, the title company or closing agent must attach either a certificate of compliance or a certificate of exemption to the mortgage in order to record the mortgage on or after July 1, 2008.

Massachusetts Mortgages and Assignments Updated Once Again; License Disclosure Also Updated

Wed, 18 Jun 2008 22:40:42 -0700

Mortgages and Assignments

In our February, 2008 issue, we reported that DocMagic, Inc.'s Compliance Department had updated Fannie Mae's/Freddie Mac's Massachusetts mortgage as well as its other mortgages and assignments to comply with Section 3 of Chapter 206 of the Acts of 2007. Although the mortgages and assignments were updated to reflect the required mortgage broker's name, post office address, and license number, the name, post office address and license number of the mortgage loan originator were not added to these documents, because the law governing mortgage loan originators does not become effective until July 1, 2008.

Illustrations of Consumer Information For Hybrid Adjustable Rate Mortgage Products

Wed, 18 Jun 2008 16:45:57 -0700

DocMagic, Inc.'s Compliance Department has caused the Illustrations of Consumer Information for Hybrid Adjustable Rate Mortgage Products (ICIHARM.MSC) ("Illustrations") to be laid out for customers' use upon their request. The federal financial regulatory agencies -- Office of the Comptroller of the Currency, Treasury (OCC); Board of Governors of the Federal Reserve System (Board); Federal Deposit Insurance Corporation (FDIC); Office of Thrift Supervision, Treasury (OTS); and National Credit Union Administration (NCUA) (collectively, the Agencies) --issued the final drafts of the Illustrations on May 22, 2008.

Updated Late Fee Dollar Amounts; Effective July 1, 2008

Tue, 17 Jun 2008 13:33:27 -0700

The DocMagic System will be updated to reflect the July 1, 2008, 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 $17.00, changed to $17.50; (ii) Minnesota late fee dollar amount was $6.76, changed to $7.28; (iii) Oklahoma late fee dollar amount was $21.00, changed to $22.00; and (iv) South Carolina maximum late fee dollar amount was $15.50, changed to $16.50, and minimum late fee dollar amount was $6.20, changed to $6.60.

New Compliance Tool: In-State Office Requirements

Tue, 17 Jun 2008 14:34:26 -0700

Depending on where you are licensed, many states require lenders and/or brokers to maintain a physical presence in the state in order for them to conduct business in that state. The following matrix outlines on a per-state basis whether there is an in-state office requirement (also known as a "brick-and-mortar" requirement) or whether no such requirement exists. If a physical presence is not required, but certain restriction(s) apply to lenders and/or brokers who wish to conduct business in that state, a description of the restriction(s) is noted in the matrix.

Here is the matrix: In-State Office Requirements Matrix.

Investor Updates

Thu, 19 Jun 2008 11:38:57 -0700

This month DSI posts the loan programs of California Housing Finance Authority, Liberty Mortgage Corporation and PHH Mortgage Corporation and updates the loan programs of CitiMortgage, Inc. (Broker Division), CitiMortgage, Inc. (Correspondent Division), Countrywide Home Loans, Inc. (Correspondent), GMAC Bank, and U.S. Bank, N.A. 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 by visiting our Investor Updates page.

At Your Service: Maryland Prohibits Prepayment Penalties

Thu, 19 Jun 2008 00:10:48 -0700

Updated: August 8, 2008 (Revisions are highlighted in yellow)

With enactment of Maryland HB 363, which became effective on June 1, 2008 (except for Section 7 of the Bill which becomes effective on January 1, 2009), Maryland law now prohibits prepayment penalties on closed - or open - end loans regardless of loan purpose or lien priority, secured by property in Maryland that is:

U.S. Treasury Yields - June 2008

Thu, 19 Jun 2008 11:12:45 -0700

The U.S. Treasury security yield values for June 2008 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 July 2008.

New/Revised Documents - June 2008

Wed, 18 Jun 2008 10:31:01 -0700

Kentucky HB 552 Affects Prepayment Penalties, High Cost Test; Limits Compensation

Wed, 21 May 2008 11:17:22 -0700

The Governor of Kentucky signed House Bill 552 on April 24, 2008, as sweeping emergency legislation affecting the mortgage industry in the State. Among numerous changes, HB 552 amends several provisions of the Mortgage Loan Company and Mortgage Loan Broker Act (MLCMLBA) affecting licensing and other matters; establishes broker standards with regard to the origination of loans; creates the Kentucky Residential Mortgage Fraud Act, which makes residential mortgage fraud a felony; amends Kentucky's high cost loan law; and amends the law on prepayment penalties that may be assessed to the borrower. This article summarizes the portions of HB 552 affecting the DocMagic software:

Maryland Security Instruments Modified to Indicate Principal Residence

Tue, 29 Apr 2008 14:01:02 -0700

If you originate loans in Maryland, you may have noticed that we have modified our Maryland security instruments to indicate, when applicable, that the property securing repayment of the promissory note is the borrower's principal dwelling. By way of background, recording fees in the applicable Circuit Courts in Maryland are based in part on number of pages. Generally speaking, for documents of nine (9) pages or less, the recording fee is $20; for documents of 10 pages or more, the recording fee is $75. There is an additional $20 surcharge for most instruments recorded in the land records, such as security instruments. Thus, the aggregate recording fee is $40 for a security instrument of nine (9) pages or less, and $95 for a security instrument of 10 pages or more. As you can see, the difference in recording fees is significant. If, however, the document presented for recordation involves solely a principal residence, then the recording fee is $40 without regard to the number of pages recorded.

Assumption Fee Provision in Nevada, Oklahoma Security Instruments Updated

Thu, 15 May 2008 11:07:35 -0700

DocMagic, Inc.'s Compliance Department recently updated the "assumption fee" provision in the Fannie Mae first-lien, conventional second-lien, Veterans Administration ("VA") and FHA Nevada and Oklahoma security instruments to track the maximum assumption fee that a lender is permitted to charge under Fannie Mae, VA and FHA guidelines.

Effect of Discount Points on Various High Cost Tests

Tue, 13 May 2008 10:00:55 -0700

In March 2008, we wrote an article here about the impact of mortgage insurance premiums on some state high cost loan tests. In this article, we explore how discount points are treated under the various state high cost tests.

New Licensing Requirements for Washington State Lenders

Thu, 24 Apr 2008 14:34:02 -0700

For those DocMagic customers making loans in the State of Washington, you may wish to review a letter written by Deb Bortner, Director of Consumer Services, and posted on the Washington State Department of Financial Institutions' (DFI) website concerning new licensing requirements arising from recently enacted legislation. To view the letter, click here. Watch the DFI website for upcoming interpretive documents on some of the ramifications of the recent legislation. The DFI will begin rulemaking to implement the new legislation in a few weeks.

RSS Feed Added to DocMagic Compliance Website

Tue, 13 May 2008 10:27:45 -0700

For the past several months, the DocMagic Compliance Department has begun posting more and more information to the DocMagic Compliance Website between Compliance Wizard publication dates. To ensure that you receive newly-posted information as soon as it is available, the DocMagic Compliance Department is pleased to announce the addition of an RSS feed to the DocMagic Compliance Website. To subscribe to the DocMagic Compliance Website RSS fee, copy the following link into your favorite RSS reader: http://www.docmagic.com/compliance/feed. Your RSS reader will check the feed regularly for new content and will download any updates that it finds automatically.

Investor Updates

Wed, 21 May 2008 12:37:39 -0700

This month DSI posts updates to the loan programs of AmTrust Bank, CitiMortgage, Inc.(Correspondent Division) , GMAC Bank, and U.S. Bank, N.A. 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 by visiting our Investor Updates page.

At Your Service: High Cost Test Roadmap

Mon, 19 May 2008 16:53:42 -0700

We receive customer questions on a daily basis regarding DocMagic's Section 32, state-specific high cost, and Fannie Mae/Freddie Mac points and fees tests. The questions vary greatly but often they are reducible to the following: which test applies, when does it apply and what are the differences between them. This article contains a brief roadmap for our customers of our high cost analysis process.

U.S. Treasury Yields – May 2008

Wed, 21 May 2008 12:01:07 -0700

The U.S. Treasury security yield values for May 2008 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 June 2008.

New/Revised Documents - May 2008

Wed, 21 May 2008 10:24:46 -0700

Maryland Governor Signs Emergency Bills

Tue, 08 Apr 2008 14:29:53 -0700

Effective April 4, 2008, Governor Martin O'Malley signed into law HB 365 / SB 216 as emergency measures. Among other things, these emergency measures enact a new law (codified as MD Real Property Code Section 3-104.1) requiring every security instrument securing "residential property" to contain the name and license number of the mortgage originator and mortgage lender in order to record the security instrument. "Residential Property" is defined under Section 3-104.1(A) as "real property improved by four or fewer single family dwelling units." In addition, the new law provides that if the originator is exempt under the Mortgage Originators Act, or if the lender is exempt under the Maryland Mortgage Lender Law, an affidavit to the security instrument stating this fact is required.

Massachusetts Mortgages Updated Again

Tue, 22 Apr 2008 10:47:21 -0700

In our February, 2008 issue, DocMagic, Inc.'s Compliance Department advised that it had updated Fannie Mae's/Freddie Mac's Massachusetts mortgage as well as its other mortgages and assignments to comply with Section 3 of Chapter 206 of the Acts of 2007. Click here for the February, 2008 article.

New Compliance Tool: Veterans Administration Disclosures

Tue, 22 Apr 2008 10:43:23 -0700

The Veterans Administration (VA) Disclosure matrix lists the disclosures that return by default in the initial and/or closing packages of DocMagic's VA loan programs. This matrix identifies the VA disclosure, the loan package in which the disclosure will appear (Initial and/or Closing), whether or not the lender -- and/or broker - origination type has to be selected in order to obtain the disclosure in the applicable package, the citation to the governing legal authority giving rise to the disclosure obligation, if any, any additional rules that would apply to the selection of the disclosure, and DocMagic's file name. To access the matrix, click here.

FIS Flood Services Spring 2008 Newsletter

Tue, 08 Apr 2008 13:18:03 -0700

FIS Flood Services, a partner with DocMagic to offer flood zone determinations to DocMagic software users, has recently published its quarterly newsletter for Spring 2008 here. Topics covered in the newsletter include, among other things, 2008 map revisions, special flood hazard area form update, advancements in automation, and the evolution of services for the insurance industry. For more information on FIS, please visit their website here.

Investor Updates

Tue, 22 Apr 2008 10:33:31 -0700

This month DSI posts loan programs of Franklin Mortgage Company (Correspondent), Franklin Mortgage Company (Wholesale) and Nationwide Advantage Mortgage Company and updates to the loan programs of Countrywide Home Loans, Inc. (Correspondent), Freedom Mortgage Corporation, GMAC Bank, Homecomings Financial, LLC, and U.S. Bank N.A. 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 by visiting our Investor Updates page.

At Your Service: DocMagic, Inc., Modifies North Carolina Deeds of Trust; Adds Default Closing Instruction

Tue, 08 Apr 2008 09:33:04 -0700

North Carolina deeds of trust securing single-family dwellings of 1-4 units were recently modified in time for the April 1, 2008 effective date of House Bill 313. In addition, a default closing instruction was added to the Addendum to Specific Closing Instructions (ATCI.MSC) to comply with HB 313.

U.S. Treasury Yields – April 2008

Tue, 22 Apr 2008 10:44:10 -0700

The U.S. Treasury security yield values for April 2008 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 May 2008.

New/Revised Documents - April 2008

Tue, 22 Apr 2008 10:00:52 -0700

Increased Conforming Loan Limits Released

Wed, 19 Mar 2008 13:19:05 -0700

Updated: April 17, 2008 (Revisions are highlighted in yellow)

On March 6, 2008, the Department of Housing and Urban Development (HUD) released the maximum conforming loan limits as mandated by the Economic Stimulus Act of 2008 (the Act). The new "conforming jumbo" loan limits for certain high cost counties in certain states will apply through December 31, 2008. A complete list of the counties with new conforming jumbo loan limits is available here. Fannie Mae quickly implemented the new conforming loan limits and published additional detailed eligibility, underwriting, pricing and delivery information. For additional Fannie Mae information, click here. On April 17, 2008, Freddie Mac announced it was purchasing billions of dollars of conforming jumbo loans from Wells Fargo, Chase, CitiMortgage and WAMU. For a copy of this release, click here. ~~is still working through the details regarding their purchase of these new conforming jumbo mortgages.~~ For additional Freddie Mac information, click here.*

HUD Proposes RESPA Rule Changes

Wed, 19 Mar 2008 12:19:05 -0700

On March 14, 2008, HUD published a proposed rule designed to "simply and improve" RESPA-required disclosures "to protect consumers from unnecessarily high settlement costs." Comments to the proposed rule are due by May 13, 2008. A copy of the proposed rule is available here. Expect the proposed rule to generate a boatload of comments in the upcoming weeks.

Nevada Unfair Lending Practices Act Amendments

Wed, 19 Mar 2008 11:19:05 -0700

Late last year, the State of Nevada amended its predatory lending law (commonly referred to as the "Unfair Lending Practices Act" (ULPA)). The ULPA is set forth in NRS 598D.010 through 598D.150, inclusive, and is available here. A copy of AB 440, which amended the ULPA, is available here. The 2007 amendments to the ULPA, among other things, expand greatly the scope of loans covered by the ULPA's unfair lending restrictions and penalties, so much so as to render DocMagic's Nevada high cost loan test unnecessary for the reasons stated in this article.

High Cost Updates

Wed, 19 Mar 2008 10:19:05 -0700

This month we added detailed high cost information for the state of Vermont and updated our high cost memo on Connecticut to our Predatory Lending page.

Effect of MIP on Various State High Cost Tests

Wed, 19 Mar 2008 09:19:05 -0700

Updated: July 3, 2008 (Revisions are highlighted in yellow)

With the recent increased interest in FHA loans, we have received many questions regarding the impact of high cost tests on certain fees and charges, including upfront mortgage insurance premiums (MIP) paid by borrowers in connection with FHA loans. For purposes of the federal Section 32 and most state-specific high cost tests, the fact that the loan is HUD-insured has no impact on the respective high cost tests: finance charges (including MIP) paid to HUD are points and fees and, consequently, are included in the high cost tests. However, some state-specific high cost tests apply different rules.

Pennsylvania Increases Permissible Fees for Returned Checks

Wed, 19 Mar 2008 08:19:05 -0700

The state of Pennsylvania adopted HB 296, which became effective on February 16, 2008. This Bill increases the returned check fee permitted under 18 Pa. Stat. § 4105(e)(3) from $20 to $50. Loans that are affected by this change include "secondary mortgage loans" that are greater than $5,000, but less than or equal to $50,000. For the definition of "secondary lien loans," click here.

FIS Flood Services Responds to OCC

Wed, 19 Mar 2008 07:19:05 -0700

On February 25, 2008, the Office of the Comptroller of the Currency (OCC) issued OCC Bulletin 2008-4 to inform national banks of certain flood hazard determination practices that potentially expose national banks to compliance and operational risks. On February 26, 2008, FIS Flood Services published its response. This prompt and thorough response to its customers is just one example of the high degree of professionalism exhibited by FIS Flood Services in the conduct of its business, and only the most recent confirmation that DocMagic made the correct decision in making FIS Flood Services the primary flood hazard determination provider for DocMagic software customers. For more information about the flood hazard determination services available through DocMagic, click here.

ECOA Notice Revised

Wed, 19 Mar 2008 06:19:05 -0700

Under Regulation B (Equal Credit Opportunity Act), the ECOA notice that needs to be given to the borrower must have the name and address of the federal agency that administers compliance with this law. The list of federal agencies with names and addresses may be found under Appendix A of the Act. For those creditors that fall under the regulation of the Federal Trade Commission agency, the address that needs to be included in the notice is:

Investor Updates

Wed, 19 Mar 2008 05:19:05 -0700

This month DSI posts updates to the loan programs of Chase - Wholesale Division and U.S. Bank, N.A. 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 by visiting our Investor Updates page.

At Your Service: “Signature Selection” Column Added to Disclosure Matrices

Wed, 19 Mar 2008 04:19:05 -0700

A new column entitled "Signature Selection" has been added to all of the disclosure matrices posted online to the Compliance website. This list includes our multistate, state, pipeline, and FHA disclosure matrices. In this column, you will find what the default signature selection is for a particular form. If a form has no borrower type present in the signature block, then the signature selection column will have N/A. The disclosure matrices may be found here. Please note that some investors, lenders, and title companies may have different signature selection requirements than those set forth in the matrices.

New/Revised Documents - March 2008

Wed, 19 Mar 2008 03:19:05 -0700

Impact of Economic Stimulus Act of 2008 on High Cost Tests

Thu, 21 Feb 2008 10:22:18 -0800

On February 13, 2008, President Bush signed the Economic Stimulus Act of 2008 (the "Act") into law. The Act provides for, among other things, an increase in the Fannie Mae/Freddie Mac conforming loan limits to the higher of either (a) the 2008 conforming loan limit for a residence of the applicable size ($417,000 for a single family dwelling), or (b) 125% of the area median price for a residence of the applicable size but not to exceed 175% of the 2008 conforming loan limit ($729,750 for a single family dwelling). HUD must publish the applicable house prices and mortgage principal obligation limits as soon as practicable but not more 30 days after enactment of the Act. The Act applies to loans originated on July 1, 2007 through December 31, 2008.

Massachusetts Mortgages and Assignments Updated

Thu, 21 Feb 2008 10:21:21 -0800

DocMagic, Inc.'s Compliance Department has updated Fannie Mae's/Freddie Mac's Massachusetts mortgage as well as its other mortgages and assignments to comply with Section 3 of Chapter 206 of the Acts of 2007. Section 3 adds a new Section 6D to Massachusetts General Laws, Chapter 183, which requires mortgage broker information, including the name, post office address, and license number, to be included on the mortgage and assignment when recorded. If applicable, the name, post office address and license number of the mortgage loan originator must be included as well. This endorsement, or notation that no mortgage broker or mortgage loan originator was involved in the mortgage, if known, shall be recorded as part of the mortgage or assignment of mortgage. Despite the foregoing requirements, failure to comply with this section shall not affect the validity of any mortgage or the recording of any mortgage or assignment of mortgage.

District of Columbia Passes Mortgage Disclosure Amendment Act of 2007

Thu, 21 Feb 2008 10:20:18 -0800

Beginning February 29, 2008, new disclosure requirements pursuant to the "Mortgage Disclosure Amendment Act of 2007" (the "Act") will go into effect. The Act amends the Mortgage Lender and Broker Act of 1996. Within 3 business days of an application for a "non-conventional mortgage loan," the mortgage lender must provide the borrower with written disclosures required under new subsection (a-1) under D.C. Official Code Section 26-1113.

Updated HELOC Important Terms Disclosure

Thu, 21 Feb 2008 10:19:18 -0800

DocMagic recently updated its generic HELOC Important Terms Disclosures for both interest - only and $100 - minimum payment disclosures. Changes have been made to conform to the 2008 index values and are reflected in the Disclosures, in both the minimum payment and historical examples. For more information on HELOCs, click here.

2008 Conventions, Conferences, Tradeshows and Expos

Thu, 21 Feb 2008 10:18:18 -0800

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, look for DocMagic at the events marked with an * so that you may stop by and say hello!

Investor Updates

Thu, 21 Feb 2008 10:08:18 -0800

This month DSI posts updates to the loan programs of Chase - Wholesale Division, CitiMortgage, Inc. (Correspondent Division), Freedom Mortgage Corporation, GMAC Bank, JPMorgan Chase Bank, N.A. (Correspondent), and U.S. Bank, N.A. 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 by visiting our Investor Updates page.

At Your Service: Colorado Division of Real Estate Adopts Emergency Rule on Mortgage Broker Disclosures

Thu, 21 Feb 2008 09:58:18 -0800

On January 25, 2008, the Colorado Division of Real Estate adopted an emergency rule, entitled "Mortgage Broker Disclosures," to clarify the disclosure requirements under § 12-61-914 of the Colorado Revised Statutes. Section 12-61-914 requires mortgage brokers, within three (3) business days after receipt of a loan application or any moneys from a borrower, to disclose specific details of a loan transaction to the borrower. Some of these details include, but are not limited to: the annual percentage rate; finance charge; amount financed; total amount of all payments; third party costs; terms of a lock-in agreement; transfer of documents; and that moneys paid by the borrower are held in a trust account. The emergency rule was adopted based on findings that uncertainty exists in the mortgage industry regarding how and when to provide these details.

New/Revised Documents - February 2008

Thu, 21 Feb 2008 09:48:18 -0800

DocMagic Adds North Carolina Rate Spread Home Loan Audit

Thu, 24 Jan 2008 12:13:13 -0800

North Carolina has created a new category of predatory loan, the so-called "rate spread home loan." The new law is contained in North Carolina G.S. Section 24-1.1F (a copy of the bill enacting this new section is available here). Click here for a description of the new law along with a description of the audit DocMagic is implementing to identify such loans.

North Carolina Amends High-Cost Home Loan Law

Thu, 24 Jan 2008 11:10:13 -0800

North Carolina has amended the definition of "points and fees" in its High-Cost Home Loan Law effective for loans entered into on or after January 1, 2008. Under the current high-cost home loan law (North Carolina General Statutes Section 24-1.1E), only compensation paid directly by a borrower to a mortgage broker is included in the definition of "points and fees." Lender-paid compensation to a mortgage broker (e.g., yield spread premiums) is not a point and fee. However, for loans entered into on or after January 1, 2008, points and fees include "all compensation paid from any source to a mortgage broker," including compensation in a table-funded transaction. As a result of this change, yield spread premiums and other forms of lender-paid compensation are treated as a point and fee. To view a copy of our North Carolina predatory lending memorandum (which has been updated to reflect the above information and to make minor editorial changes), click here. Please contact the DocMagic Compliance Department if you have any questions or comments.

Maine Anti-Predatory Lending Law

Thu, 24 Jan 2008 11:09:13 -0800

DocMagic, Inc.'s Compliance Department recently posted its memo on Maine's Anti-Predatory Lending Law. To view Maine's high cost memo, click here.

New Compliance Tool: Tangible Net Benefit Matrix

Thu, 24 Jan 2008 11:08:13 -0800

In response to customer inquiries, DocMagic, Inc.'s Compliance Department has prepared a Tangible Net Benefit Matrix that shows for each state, plus the District of Columbia: (1) whether a creditor is required to determine a tangible net benefit to the borrower; (2) whether the creditor must provide the borrower with a tangible net benefit worksheet; (3) whether any applicable tangible net benefit law applies to the occupancy status of the borrower; (4) the applicable citations to the governing law; and (5) notes regarding the specific tangible net benefit law.

Here is the matrix: Tangible Net Benefit Matrix.

DocMagic Receives SAS 70 Certification

Thu, 24 Jan 2008 11:07:13 -0800

DocMagic recently received SAS 70 Type I certification. For your reference, we're providing a summary of the auditor's report. For current DocMagic customers who wish to receive a complete version of this report, you must complete and return the Non-Disclosure Agreement (NDA) to compliance@docmagic.com or fax: (800) 564-1362. Additionally, we are currently undergoing the Type II report and will make this available to our customers. We're anticipating having this report available in the 4^th quarter of 2008.

Fannie Mae Expands Eligibility for Inter Vivos Revocable Trusts

Thu, 24 Jan 2008 11:06:13 -0800

Currently, Fannie Mae accepts an inter vivos revocable trust as an eligible borrower for a conventional first mortgage as long as the secured property is a one-family principal residence, second home, or an investment property, and the trust complies with other eligibility requirements stated in Part IV, Section 501 and Part VII, Section 101.06 of its Selling Guide. Pursuant to Announcement 07-25, dated December 21, 2007, the eligibility of secured property in which a revocable trust is the borrower has been expanded to include one - to four - family principal residences, investment properties, and one-family second homes. Additionally, Fannie Mae clarifies in its Announcement that eligible properties include units in condominium projects, planned unit developments (PUDs), manufactured homes and cooperatives, provided that the lender has obtained approval to deliver cooperatives.

Investor Updates

Thu, 24 Jan 2008 11:05:13 -0800

This month DSI posts loan programs of AmTrust Bank and Thornburg Mortgage Home Loans, LLC and updates to the loan programs of Aurora Loan Services, LLC, Freedom Mortgage Corporation, GMAC Bank, and Homecomings Financial, LLC 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 by visiting our Investor Updates page.

At Your Service: Massachusetts Disclosures Repealed

Thu, 24 Jan 2008 11:04:13 -0800

DocMagic, Inc.'s Compliance Department has received customer inquiries about whether the Massachusetts Important Notice of Loan Terms (Broker - MAINLTB.MSC; Lender - MAINLTL.MSC) that were repealed in December, 2007 have been replaced by new disclosure forms. According to the Massachusetts Office of the Attorney General's Guidance With Respect to 940 CMR 8.00 et seq. (as amended), these repealed disclosures are not replaced with new disclosures. Brokers and lenders must simply comply with all other Federal and Massachusetts disclosure requirements.

New/Revised Documents - January 2008

Thu, 24 Jan 2008 11:00:13 -0800