June 2018 Loan Document Compliance Recap

If you were out enjoying the sun, the beach and the summer in June, it might have been easy to miss some compliance changes and document updates. To help you catch back up, in this month’s compliance recap, we spotlight key lending-related compliance issues and document changes that occurred in June. For more details on any of these important changes, follow the links below to visit our compliance blog.

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One of the most significant upcoming compliance changes is still in the development phase. The U.S. Department of Agriculture published a proposed rule affecting single-closing, construction-to-permanent loans. Among the changes proposed include permitting creditors to charge a higher rate of interest during the construction phase than the note rate (subject to caps imposed by RD), as well as permitting creditors to escrow 12 months’ worth of fully amortized PITI payments during such phase “in order to achieve a 30 year amortization of PITI payments.” Comments are to be submitted on these proposed rules no later than August 20, 2018. More.

Also, there were a few TRID-related items that surfaced in June. The first resulted in Docutech making changes in three areas: (1) prepaid interest, (2) payoffs and payments, and (3) the monthly escrow payment. Details about all of these changes can be found here.

In addition, TRID 2.0 amended Regulation Z to require the total of post-consummation draw, inspection, and handling fees to be disclosed in addenda to the Loan Estimate (“LE”) and Closing Disclosure (“CD”). Our compliance team provided an analysis of this change here. In addition, we created a new series of fields identified by the prefix “Post-Closing Construction Fee.” You can read more about that here. 

State and Investor Compliance News

A number of states published changes in June that may impact our clients. Here’s a look at the changes we made on behalf of our clients.

To begin with, we made a number of systemwide changes in June. This included the revision of our ConformX late fee standard defaults to reflect the way various states revised the dollar amounts promulgated under their versions of the Uniform Consumer Credit Code. More.

In addition, we revised our VA Disclosure Matrix, reflecting recently enacted changes made due to the “Economic Growth, Regulatory Relief, and Consumer Protection Act”. A copy of the Matrix can be downloaded here.

Alaska and Hawaii: We have made changes to the “State Funding Type” status fields for these states based on new research. More.

Florida, Indiana, Minnesota, Oklahoma, and South Carolina: These states have all recently modified either some of their laws regarding late fees or the dollar amounts associated with their restrictions on late fees and prepayment penalties. We have published new versions of our Late Fee Matrix, Late Fee ConformX Matrix, and Prepayment Penalty Matrix which reflect these changes. Our Matrices can be downloaded from: https://compliance.docutech.com/matrices/. More.

North Carolina: A new law in this state amends various parts of North Carolina’s statutes concerning real property. We are currently reviewing this change to determine any impact to our document library and/or systems and evaluating any necessary changes. More.

Georgia: The state’s Department of Banking and Finance has finalized new regulations affecting a wide range of financial institution activities. We are currently reviewing this change to determine any impact to our document library and/or systems and evaluating any necessary changes. More.

Michigan. A new law here has changed a few of the state’s recording requirements. These changes took effect immediately. We have already reviewed these amendments and have determined that no changes are necessary to our documents and systems. More.

Document Changes

We also saw a number of documents undergo changes in June. The following list provides a brief overview of edits followed by respective links to learn more about each update:

  •  GA Notice of Transfer of Servicing (Cx17905) has been updated. More.
  • CT Agreement Concerning Nonrefundability of Advance Fees (Cx3751) has been modified. More.
  • Several pre-2015 FHA documents are being retired. More.
  • Contact information in Credit Score Disclosure (Cx15312 — B-3/H-3) has been updated. More.
  • More C Forms are being incorporated into the Statement of Credit Denial, Termination or Change (Cx15858). More.
  • NC Notice of Information (Cx1271) has been modified. More.
  • CA disclosures referencing the Department of Real Estate have been updated. More.
  • Cx18566 and Cx 18991 have been updated to always print fee line. More.
  • CA Per Diem Interest Disclosure (Cx878) has been updated. More.
  • VA IRRRL Loan Comparison (Cx14501) has been updated along with new Data Integrity Checks and System Default. More.
  • W-9 Taxpayer ID (Cx22) has been updated. More.
  • RI Tangible Net Benefit Disclosure (Cx11242) has been updated. More.
  • HUD/VA Addendum to Uniform Residential Loan Application (Cx20336) has been updated. More.
  • NY Consolidation, Extension and Modification Agreement (Cx1583) has been modified slightly. More.
  • CT Private Mortgage Insurance Disclosure (Cx1029) has been updated. More.
  • IL Security Assignment of Beneficial Interest in Land Trust (Cx4936) has been updated. More.
  • New document for VA IRRRL Net Tangible Benefit (Cx22343) has been created; Loan Comparison Form Cx14501 has been modified. More.

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