April Compliance Recap: Updated URLA Timeline, COVID-19 Updates, and More

Our compliance team is hard at work monitoring any developments at the federal and state level to provide you with the information and tools necessary to continue operations amid COVID-19. We are seeing updates at both the state and national level to accommodate difficulties in this time and are working continuously to ensure our guidance reflects the latest news.

Remember that you can receive compliance-related updates as we publish them by subscribing to our compliance blog. 

State and Investor Compliance News

FHLMC. FHLMC published Bulletin 2020-9, which announces FHLMC’s “eligibility, underwriting and delivery requirements for SOFR-indexed ARMs [and] the availability of new ARM Notes and riders specific to the SOFR ARM offering.” Lenders may immediately begin to underwrite borrowers for their SOFR programs and, beginning October 1, 2020, may submit them to Loan Product Advisor® (if certain conditions are met). Lenders will be able to “take out” 30-day Average SOFR contracts in Loan Selling Advisor® beginning November 16, 2020 (see Bulletin for further details). Learn more.

FNMA and FHLMC. FNMA and FHLMC have published a joint announcement and implementation timeline for the new Uniform Residential Loan Application (“URLA”) and associated MISMO® loan application submission files. The new URLA and the submission files must be used beginning March 1, 2021. The current URLA and submission files will no longer be accepted beginning March 1, 2022. Learn more.

NCUA. On April 21, 2020 the National Credit Union Administration published an interim final rule in the Federal Register to permit credit unions to defer, for up to 120 days from closing, the completion of an appraisal or written estimate of market value on “all residential and commercial real estate-secured transactions, excluding transactions for acquisition, development, and construction of real estate.” Learn more.

South Carolina. The South Carolina Department of Consumer Affairs has published their adjustments to the dollar amounts promulgated in various parts of South Carolina’s Consumer Protection Code. We are currently reviewing this change to determine any impact to our document library and/or systems and evaluating any necessary changes. Learn more.

Oklahoma. the Oklahoma Department of Consumer Credit has adjusted certain dollar amounts listed in Oklahoma’s version of the Uniform Consumer Credit Code, including the maximum amounts which can be charged for a late fee. These adjustments apply starting July 1, 2020. Learn more.

Document Changes

• Borrower’s Declaration (Cx23858): Due to the COVID-19 pandemic, the GSEs and Federal Agencies have implemented temporary changes to their rules regarding the verification (and re-verification) of a borrower’s income and employment. To support this, we will be providing a document for borrowers to confirm that their income and employment are stable and have not been adversely affected by COVID-19. Learn more
• Explanation of Loan Terms (POA) (Cx23852): FNMA and FHLMC have issued temporary amendments to their rules regarding the use of a power of attorney (“POA”) in certain transactions; in particular, they are allowing the attorney-in-fact to be an employee of a party to the transaction. Learn more
• Advanced Fee/Application Disclosure (Cx2783); Wisconsin Version: We have received feedback alleging that at least one auditor from the Wisconsin Department of Financial Institutions is taking issue with the use of the term “advanced fee” in Cx2783. To accommodate this, we have created a new version of the document. Learn more
• Borrower’s Income Verification COVID-19 Declaration (Cx23858): Cx23858 was created due to client and investor demands for a document in which the borrower declares, at the time of Closing, that certain facts regarding their ability to repay a loan are still true and have not been negatively impacted (particularly in regards to the COVID-19 pandemic). We have amended the language of the document based on feedback from investors and clients. Learn more
• Fixed Rate Note Alaska Second (Cx1032): Currently, our standard fixed, junior lien note for loans secured by real property located in Alaska discloses the borrower’s post office address, in addition to the property address. After a thorough review of Alaska’s laws, it has been determined that it is not necessary for the promissory note to list the mailing address of the borrower and, as a result, we will be removing that information. Learn more

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