| In this Issue |
Letter from the President - What's In It For Me
CyberDocs Updated for Trusts, Power of Attorney Loans and Waiver of Homestead
CyberDocs Changes & Updates
Compliance Updates & Industry News
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| Upcoming Events |
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ICBA National Convention & Techworld
March 18th-22nd, 2009
Phoenix Convention Center
Phoenix, AZ
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| LOS Interfaces and Partners |
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WHAT'S IN IT FOR ME
Letter from the President
Now that all the hoopla connected with the election and inauguration of Barack Obama has now settled down, what kind of changes should we expect from this administration? Granted, it is common knowledge that the economy is in its worse shape since maybe the 1940's and because of that, many of the President's plans and programs will not have as immediate an impact on the economy as they ordinarily might. Nonetheless, many of the nation's financial woes were hotly debated in the presidential campaign and the outcome of the election hinged heavily upon how those issues were addressed. In case you forgot, below are highlights of some of the economic and lending related promises that might affect you:
1. In an effort to further stimulate the economy on a personal level, Obama plans on providing tax relief to working families and the middle class. He has also promised to provide a "Making Work Pay" tax credit of up to $500 per person/$1,000 per family.
2. Obama would propose to eliminate all capital gains taxes on startup small businesses to encourage innovation and job creation.
3. Enact a windfall profits tax on oil company profits to provide a $1,000 emergency energy rebate to families to help offset rising energy costs and bills.
4. Eliminate income taxes and the need to file tax returns for senior citizens who are earning less than $50,000 per year. If adopted, this will eliminate income taxes for 7 million seniors and provide them with an annual savings of up to $1,400.
5. In an attempt to protect what remaining jobs there are in the U.S., the President would end tax breaks to companies that send jobs overseas. Obama believes that companies should not be entitled to tax breaks and tax deductions for moving their operations out of the country.
6. Protect home ownership and further crackdown on mortgage fraud. Obama's "Stop Fraud Act" provides the first federal definition of mortgage fraud and increases state and federal law enforcement funding for programs. It also creates new criminal penalties for mortgage professionals found guilty of fraud and requires industry insiders to report suspicious activities.
7. Provide a simplified and accurate loan disclosure program through a Homeowner Obligation Made Explicit (HOME) score, which will provide potential borrowers with a simplified, standardized borrower APR for home loans, thus allowing borrowers to more easily compare various mortgage products and understand the costs associated with the loan.
8. Obama would work to eliminate the provisions that prevent a bankruptcy court from modifying a borrower's loan payments. He believes that the subprime mortgage industry is unscrupulous, has engaged in dangerous business practices and should not be protected by "outdated" federal laws.
The President must be applauded for his efforts in trying to rectify the current mess that he has inherited. However, in spite of the above, the economy will never recover unless the President can get banks and lending institutions to lend money again. Recent reports have indicated that payrolls have been slashed by about 2.6 million, the unemployment rate has climbed to 7.2 and is still rising, and it is estimated that the economy will shrink by another 1.5% this year. His biggest task will be to figure out a way to keep the banks liquid, get their balance sheets in order and get them to start lending money again. We'll have to wait to see how it all plays out.
Paul Fosco, President |
CyberDocs Updated for Trusts, Power of Attorney Loans and Waiver of Homestead
We are excited to announce the modification to the way we produce Living and Land Trust documents, the addition of Power of Attorney fields in CyberDocs and the lengthening of the Title Vested In/Homestead fields to accommodate waiver of homestead language on the signature lines.
We have revamped the way we process trust loans and this will provide a number of benefits for our clients. We have added 'Borrower is a Trustee' checkboxes next to each borrower's name on the Borrower 1 screen in CyberDocs. If you are ordering a living trust package, please put a checkmark in any box that corresponds to a borrower who is also a trustee. This person's name will then carry over to the Borrower 2 screen in the Trust section which eliminates the need for rekeying of data.
We have also added a 'Trust Name 2' field on the Borrower 2 screen in the Trust section. This field is to be used when there are two living trusts for the loan. An example of this would be John Doe is trustee of the John Doe Trust and Mary Doe is trustee of the Mary Doe Trust. If there is only one trust, you can leave this field blank.
You will also notice when the documents are returned to you that we no longer are including our Trust Signature Addendums and Riders for living trust loans. The entire trust verbiage will now print beneath the signature lines on any Security Instrument, Riders, Notes and Addendums. We have also coded the system to accommodate any investors that have special trust verbiage requirements such as Countrywide and GMAC Bank.
We are also excited about the addition of our 'POA' fields located next to each borrower's name on the Borrower 1 screen. These fields are to be used for loans closing with a Power of Attorney. Users would enter in the 'POA' field the language which is to print after that borrower's name. Example: John Doe by Mary Doe, his attorney-in-fact.
When the POA package is returned to you, you will receive a cover sheet in the beginning of the package that explains the loan is closing with a Power of Attorney and how the documents need to be signed. We will be printing the POA verbiage on the following documents: Security Instruments, Riders, Notes, Addendums, Truth-in-Lending, Itemization of Amount Financed, RESPA Servicing Disclosure and Rights of Rescission. All other miscellaneous documents will not print the POA verbiage. It has been determined by our legal counsel that it is not necessary to print the POA verbiage on all signature lines. We have included the verbiage on the main documents and the cover sheet will explain how all other documents are to be signed.
One final upgrade is the lengthening of the 'Title Vested In/Homestead' fields on the Borrower 2 screen. This will allow users to type additional information after the names to accommodate printing Homestead verbiage on the signature lines. Example: John Doe signing solely to waive homestead rights. Clients will no longer need to enter this information in the 'Notes to Document Express' field. Simply type the information in the 'Title Vested In/Homestead' fields and the verbiage will print on the signature lines of all applicable documents.
All of these processes have been automated which means a quicker turn-around time for your documents. These packages can be ordered 24-hours per day/7-days per week and will be returned through our automated system.
We thank you for your patience during this time of transition and we hope these changes will help make your business run more smoothly. Please contact Erika Klein at erika@documentexpressinc.com or 800-476-3627 with any questions. |
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CyberDocs Changes and Updates
Originating Broker Field Added to CyberDocs: November, 2008: We have added a new field labeled Originating Broker on the Loan Set-Up Screen in CyberDocs. The addition of this field will allow you to pay fees to the Originating Broker without having to pick Other and then enter the Originating Broker's name. You will notice on the Loan Fees Screen and the Additional Fees Screen that Originating Broker has been added as a choice to the Paid to Whom dropdown list available for each fee. This field should be used for Third Party Originators. This field is not a required field in CyberDocs, therefore if the field is not applicable to your loan, it may be left blank.
FHA Arm Adjustment Date Check Added to CyberDocs: November, 2008: CyberDocs will now run a check on the First Adjustment Date entered for FHA Arm loans based on the number of months entered in the Months at First Rate field and the First Payment Date. If the First Adjustment Date does not add up to the number of months from the First Payment Date, CyberDocs will give the user a warning notifying them that the date is incorrect and should be changed.
Sender's Email Address Hardcoded for Email Docs Feature: January, 2009: In response to a customer request, we have hardcoded the sender's email address in the Your Email Address field located on the Email Docs screen in CyberDocs.
Breakdown of Funds Checkboxes Renamed: January, 2009: We have renamed the Include in Breakdown of Funds checkboxes located on the fee screens to read Include in Funding Request. These checkboxes should be used for any fee that should be included in the funding request, if one is required in your package.
USDA Screen Added to CyberDocs: January, 2009: We have added a USDA screen to CyberDocs that allows you to enter the USDA/Rural Housing Fee amount financed and paid in cash for any rural housing program. Clients no longer need to enter this fee as an additional fee in CyberDocs.
Exclude Escrow During Construction Period Field Added to CyberDocs: February, 2009: We have added a field to the Construction screen for Construction loans that allows users to choose Yes if escrow payments are not collected during the construction period or choose No if they are to be collected.
10 Additional Questions Added to Custom ?s Screen: February, 2009: We have added 10 additional questions for our clients to use on the Custom ?s screen in CyberDocs free of charge. Clients now have access to 20 custom questions which can be added to CyberDocs at no additional charge. |
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Compliance Updates and Industry News
FACT Act Red Flag Extension
The Federal Trade Commission delayed penalties until May 1, 2009 for organizations not in compliance with with the Fair and Accurate Credit Transactions Act's red flag rules.
The red flag rules of FACTA require financial institutions and creditors to implement a written identity theft prevention program. The purpose of this program is to detect identity theft, and if it is detected before damage occurs, to step in and prevent it. If identity theft is detected later, the requirement is to act quickly to mitigate the damage.
According to the FTC's recently published enforcement policy, this extension only applies to organizations that are not under the jurisdiction of any of the other FACT regulatory agencies other than the FTC. Financial institutions regulated by the OCC, FDIC, OTS or NCUA are not excused from enforcement of the Nov. 1 deadline.
Additionally, this delay in enforcement is limited to the identity theft red flag rules and does not extend to the rule regarding address discrepancies applicable to users of consumer reports, or to the rule regarding changes of address applicable to card issuers.
The FTC has stressed that this is not an extension of the deadline, but rather a delay of enforcement action for violation of the identity theft red flag rules until May 1, 2009.
Maryland Net Tangible Benefit Worksheet Added to Packages: On November 3, 2008, the Maryland Commissioner of Financial Regulations posted a Net Tangible Benefit Worksheet to their website. Under the Duty of Care sections of COMAR 09.03.06.20 and COMAR 09.03.09.04 which became effective November 3, 2008, the Commissioner was to prescribe a form which will insure that a mortgage lender or mortgage originator has conducted a reasonable inquiry of whether a refinance of a mortgage loan provides a net tangible benefit to the borrower. We have added form VMP-1086(MD) to our packages for MD to comply with this requirement.
New Mexico Security Instruments Updated: Fannie Mae has made revisions to the New Mexico Deed of Trust. Fannie Mae has revised Section 22 to describe the borrower notice requirements and Section 25 to include non-judicial sales in the redemption period. The Fannie Mae tagline date for this instrument is 1/01 Rev 9/08. Minor revisions were also made the NM 2nd Mortgage Security Instruments to include non-judicial sales in the redemption sections. Document Express has added these revised documents to its closing packages.
Kentucky High-Cost Loan Documents Added: As a result of Kentucky House Bill 552, VMP has amended the VMP-105N(KY) to conform with the prepayment limitations, as well as created a new Notice of Material Changes form for high cost loans, VMP-1070A(KY). Document Express has added these two forms to their KY high-cost loan packages.
RESPA Revises Transfer of Servicing Disclosure: The Final Rule amending the Real Estate Settlement Procedures Act (RESPA) was posted in the Federal Register on November 19, 2008. In addition to the change to the Good Faith Estimate and the HUD -1/HUD-1A Settlement Statement, the rule also, revises the Transfer of Servicing Disclosure. The revisions to the form create a concise, easy to understand disclosure. HUD did not allow the same one year implementation period for the new Transfer of Servicing disclosure as was allowed for the GFE and the HUD-1/1A. The new Transfer of Servicing Disclosure was mandatory on January 16, 2009. (The GFE and HUD-1/1A are mandatory on January 1, 2010.) Document Express is now including the new transfer of servicing disclosure, VMP-552R, in its packages.
Pennsylvania Establishes New Disclosure Requirements, Requires Borrower Repayment Ability Analysis and Imposes Additional Prohibited Acts: Pennsylvania adopted rules under the Mortgage Loan Industry Licensing and Consumer Protection Act requiring lenders and brokers to provide a new disclosure and conduct a borrower repayment ability analysis prior to making a mortgage loan. Under the new rules, a licensee who takes an application for a mortgage loan is required to disclose: whether the loan contains a variable interest rate or balloon payment feature; if the lender will escrow property taxes and hazard insurance; whether the loan contains a prepayment penalty; if the licensee has the ability to lock-in the interest rate; and whether the loan has a negative amortization feature. The new rules also prohibit a licensee from offering a loan to an applicant without having reasonably determined that the applicant will have the ability to repay the loan in accordance with the loan terms and conditions by final maturity at the fully indexed rate, assuming a fully amortized repayment schedule. In addition, the new rules: prohibit the offering of a covered loan without advising the applicant that the applicant qualifies for a non-covered loan; prohibit licensees from advising or implying that the applicant's income is not relevant to the loan transaction; and establish several other prohibited acts. The rules generally went into effect December 19, 2008; however, the disclosure requirements and borrower repayment ability requirements do not become effective until March 20, 2009. Document Express will be adding this disclosure to its packages once it has been created and released by VMP.
Colorado Dual Status Disclosure Added to Initial Disclosure Packages:
The Colorado Director of the Division of Real Estate adopted a new rule January 2009 for mortgage brokers acting as real estate brokers. Effective March 2, 2009, CO Rule 7-1-1 Dual Status Disclosure requires that mortgage brokers must complete and provide the DRE's Dual Status Disclosure form or an alternate form to the borrower within 3 business days after receipt of a loan application. Document Express has added this disclosure to its Colorado Initial Disclosure packages.
Ohio Revises Recording Requirements:
Effective July 1, 2009, Ohio Revised Code §317.114 establishes new rules for the recordation of documents in Ohio as follows:
(A) Except as otherwise provided in division (B) of this section, an instrument or document presented for recording to the county recorder shall have been prepared in accordance with all of the following requirements:
(1) Print size not smaller than a computer font size of ten;
(2) Minimum paper size of eight and one-half inches by eleven inches;
(3) Maximum paper size of eight and one-half inches by fourteen inches;
(4) Black or blue ink only;
(5) No use of highlighting;
(6) Margins of one-inch width on each side of each page of the instrument or document;
(7) A margin of one-inch width across the bottom of each page of the instrument or document;
(8) A three-inch margin of blank space across the top of the first page of each instrument or document to accommodate any certification or indorsement of the county engineer, county auditor, or county recorder, as may be required by law, with the right half of that margin being reserved for the indorsement of the county recorder required by section 317.12 of the Revised Code; and
(9) A one and one-half-inch margin across the top of each of the remaining pages of the instrument or document.
The county recorder shall accept for recording an instrument or document that does not conform to the foregoing requirements but shall charge and collect the following additional fees for each such instrument or document:
an additional base fee for the recorder's services of ten dollars and a housing trust fund fee of ten dollars, which shall be collected pursuant to section 317.36 of the Revised Code.
(B) This section does not apply to any of the following:
(1) Any document that originates with any court or taxing authority;
(2) Any document authorized to be recorded under section 317.24 of the Revised Code;
(3) Any plat, as defined in section 711.001 of the Revised Code, that is required or authorized by the Revised Code to be recorded;
(4) Any document authorized to be recorded that originates from any state or federal agency;
(5) Any document executed before the effective date of this section.
Document Express has already confirmed with VMP that the Ohio Security Instruments we provide are compliant with the above mentioned requirements.
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We sincerely hope you enjoyed this issue of our quarterly newsletter. As always, we welcome any suggestions, comments and criticisms to help better serve you. Feel free to contact us anytime at support@documentexpressinc.com or at 800-476-3627.
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