DX is Named One of Mortgage Technology Magazine's Top 50 Service Providers
 

Interthinx PredProtect® Enhancements 

 We would like to inform our DX HCA Clients of the following enhancements made to Interthinx' PredProtect® software to comply with new rules, regulations and state laws:

HOEPA Changes
- New HOEPA rate tests, now based on the Freddie Mac "Average Prime Offered Rate";

- New, tougher HOEPA fee tests that include, for the first time, YSPs;

- Prohibition of YSPs based on interest rate (effectively killing off YSPs for good);

- A new class of "Qualified Mortgages" that carry with them a presumption of ability to repay, thus favorable treatment.

State Law Changes

- New Mexico revised high-cost standards went into effect on July 31, 2010.

- North Carolina high cost revisions went into effect on September 1, 2010.  Most notably, it lowers the fees threshold from 5% to 4%.  Also, the definition of points and fees was amended to exclude certain upfront government-guarantee fees or qualified private mortgage insurance fees that exceed 1.25% of the total loan amount.  Fees collected and paid to the Federal Housing Administration, the Veterans' Administration, or the U.S. Department of Agriculture to insure or guarantee a loan would be subject to the partial exclusion.  Up-front private mortgage insurance premiums would also be subject to the partial exclusion if:

· the PMI premium, charge or fee is required to be refundable on a pro-rated basis;

· the refund is automatically issued upon notification of satisfaction of the underlying mortgage; and

· the borrower has the right to request or receive a prorated refund in accordance with state or federal law.

- Illinois Predatory Lending Database Test - The Illinois Database Test is an analysis that is separate from the state's existing high cost loan law, yet nonetheless important in your predatory lending analysis.The Predatory Lending Database was established to ensure Illinois borrowers were well informed before closing loans that could potentially cause harm. The test therefore is used to determine the need for borrower credit counseling and can be used to assist you in timing the closing of home loans within the database counties (Cook, Kane, Peoria and Will counties).  A borrower will be recommended for counseling if, after reviewing the information in the database, the Banking Department finds the borrower is a first-time homebuyer, or is refinancing a primary residence, and the loan is a mortgage that includes one or more of the following:

· A provision that permits interest-only payments;

· A provision that may result in negative amortization;

· The total fees payable by the borrower at or before closing exceeds 5%;

· A prepayment penalty; or

· An adjustable-rate (ARM) product type.

[765 Ill. Comp. Stat. Ann. 77/73]

Remember: you should always refer to the Illinois Threshold Test to determine if fees need to be reduced in order to avoid making a high cost loan.

Beginning January 1, 2011, risk-based pricing disclosures must be given by Lenders who use credit reports to evaluate extensions of credit and base the terms of the credit on a consumer's credit history.

There are three options that Lenders can use to meet the disclosure requirements, and the final rules contain model forms for each scenario. The first option is to provide the risk-based pricing disclosure to borrowers whose credit scores are in the bottom 60 percent of a Lender's consumer database. Under this method, the H-1 Model would be used. Alternatively, the requirements can be met by providing a disclosure to all borrowers, regardless of credit scores or credit ranking. In this case, the H-3 Model would be utilized. Finally, for consumers who do not have credit scores, the H-5 Model would be used.  Document Express has installed all three disclosure versions in our document library and are working on determining how these disclosures will be made available to our clients.  We will have this new system in place by the mandatory usage date.

****************************************************************************************************

On November 17, 2009, eight regulatory agencies jointly released a new model privacy form for compliance with the privacy requirements of the Gramm-Leach-Bliley and Fair Credit Reporting Acts. The new form was effective December 31, 2009 and will be required to be used by January 1, 2012.

The new Model Privacy Form was developed under the Financial Services Regulatory Relief Act of 2006, to replace existing privacy disclosures. Congress assigned the task of creating the new model form to a group of eight regulators: the Federal Reserve, OCC, OTS, FDIC, and NCUA, as well as the Federal Trade Commission, Commodity Futures Trading Commission, and Securities and Exchange Commission.

The new form will cover all of the financial institutions that now give privacy disclosures-banking, securities, commodities trading, etc. The rules on delivery and timing have not changed. So the new form will still be given to consumers at account opening, and then annually throughout the relationship.

Use of the enhanced Privacy Notice is not required but Document Express has added this new form to its forms library should clients wish to replace the old notice with this new one. Please contact DX Customer Support at 800-476-3627 or support@documentexpressinc.com to add this form to your packages.

CyberDocs Changes and Updates

New Jersey Disclosure of Fees Added to Initial Packages: August 2010:  On August 2, 2010, the New Jersey Commissioner of the Department of Banking and Insurance issued Bulletin 10-17. In that Bulletin, the Commissioner stated that because of changes to the federal RESPA forms, one could no longer comply with the New Jersey good-faith estimate regulation [N.J.A.C. 3:1-16.3(d)] by completing the federal RESPA good-faith estimate.  A NJ Disclosure of Fees document was created and has been added to all New Jersey DX Initial Disclosure packages.

Veteran's Affairs Origination Statement Revised: August 2010:  Per Veterans Affairs (V.A.) Circular 26-10-08 dated June 23, 2010 (and clarified by Circular 26-10-9 dated August 6, 2010), V.A. originators are now required to itemize title services and lender's title insurance charges (HUD Settlement Statement Line 1101) in addition to those included in "Our Origination Charge" (HUD Good Faith Estimate and Settlement Statement). Originators must also note any credits paid by other parties to ensure that veteran borrowers did not pay unallowable fees. All loan applications taken on or after October 1, 2010 must provide this information at closing.  Document Express has updated its VA Origination Statement and Itemization of Fees to accommodate the new credit regulations.

WHEDA Form Revisions for New Pricing Options:  August 2010:  The Wisconsin Housing and Economic Development Authority (WHEDA) revised the following forms to accommodate their new Fannie Mae Advantage loan pricing options and Easy Close Advantage down payment assistance loan. The revisions include text and data field changes. There is no mandatory use date but the forms are effective for use with the new programs on September 1, 2010.

· WI Application Package Checklist WHEDA Form 6

· WI Closing Package Checklist WHEDA Form 12

· WI Funding Certificate WHEDA Form 7

· WI Request for Rate Lock WHEDA Form 1

Document Express has revised the above-mentioned WHEDA forms in their forms library.

Indiana Loan Broker Agreement Added to Initial Disclosure Packages:  August 2010:  710 Indiana Administrative Code 1-22-5 states that within three (3) business days of the time a loan application is made, a written loan broker agreement must be signed with the loan applicant. To comply with this requirement, Document Express has added an IN Loan Broker Agreement to its Indiana DX Initial Disclosure packages.

Compliance Updates and Industry News

New FHA Mortgage Insurance Premium Changes:  August 2010:  On August 10, 2010, Deputy Assistant Secretary Vicki Bott announced that FHA will be making the new mortgage insurance premium fee changes announced by FHA Commissioner David H. Stevens on all new case numbers effective October 4, 2010. The original deadline was September 7, 2010 but lenders expressed the need for additional time to implement and test systems. FHA's upfront mortgage insurance premium will be adjusted down to 100 basis points on all amortization terms and the annual mortgage insurance premium will increase to 85-90 basis points on amortization terms greater than 15 years. The Mortgagee Letter providing the guidance on these changes is expected to be published in the near future.  Note:  The upfront and annual premium changes do not apply to the following FHA Programs: Title I, HECM, HOPE for Homeowners (H4H), Section 247 (Hawaiian Homelands), Section 248 (Indian Reservations), Section 223 (e) (declining neighborhoods), Section 238(c) (Military Impact areas in Georgia and New York).

Freddie Mac Interest-Only Mortgages Discontinued:  September 2010:  Freddie Mac previously announced in their Bulletin 2010-7 dated March 11, 2010 that they will no longer purchase their Initial InterestSM Mortgages or any Mortgage with an interest only option with Settlement Dates on or after September 1, 2010. Freddie Mac will delete Guide Chapter J33, Initial Interest Mortgages, from their Seller Guide and revise other applicable Guide chapters to reflect this change.

HUD Issues New Guidance on Minimum Credit Scores:  September 2010:  On September 3, 2010, the Department of Housing and Urban Development (HUD) issued Mortgagee Letter 10-29, which introduced new guidance on minimum credit scores for Federal Housing Administration (FHA) mortgage loans.  Borrowers with credit scores of less than 500 will not be eligible for FHA-insured financing. Borrowers with credit scores between 500 and 579 will be limited to loans with a maximum loan-to-value of 90 percent. Borrowers with credit scores of at least 580 or Borrowers with an acceptable non-traditional credit history will be eligible for maximum financing. The new requirements are effective for cases assigned on or after October 4, 2010 and are applicable to all Single Family programs except Title 1, Home Equity Conversion Mortgages; HOPE for Homeowners; and Section 247, 248, 223(e); and 238 loan programs.

Recent DX Compliance Memos:

July 8, 2010 Compliance Memo

July 22, 2010 Compliance Memo

August 10, 2010 Compliance Memo

September 3, 2020 Compliance Memo

September 20, 2010 Compliance Memo

September 22, 2010 Compliance Memo