Compliance Updates: August 2024 In Review

Our team of experts at Docutech continually review requirements for document changes and publish real-time updates. To help keep you in the know, the monthly Docutech Compliance Recap brings you the most recent compliance updates. 

Here’s our latest recap: 

Document Updates

• Fannie Mae recently announced revisions to Definitions (B) & (C) and the paragraph for “Transfer of Rights in the Property” in the Model Form for the Kentucky Security Instrument (Form 3018). As such, the following documents have been updated: Cx25296 (3018 KY Mortgage 2021); Cx26133 (FHA KY Mortgage 2021); Cx484 (KY Mortgage Second). Read more.
• As a result of a routine audit of our prepayment language, the Colorado and Montana versions of Cx12387 Enhanced Prepayment Penalty Addendum, Cx12388 Enhanced Prepayment Penalty Rider and Cx12389 Enhanced Prepayment Penalty Disclosure have been updated. Read more.
• Currently, our Inter Vivos Revocable Trust Rider (Cx21131) prints with signature options that are coded in the document. After some research involving the various possible signature formats and options available, we are replacing the coded signatures with our standard software generated signatures that print all parties who typically sign Riders. This will allow the Inter Vivos Revocable Trust Rider to have signature feature parity with other Riders in our document library. Our New York CEMA GAP Inter Vivos Revocable Trust Rider copy, Cx16253, is also being modified in the same way. Read more.
• In accordance with NYCRR & Regs. tit. 3, § 80.10(b), an updated disclosure should be provided for revolving credit line secured by a junior mortgage. We have updated our New York Junior Lien Disclosure (Cx5283) to include this statement when Field 28859 “HELOC” is set to ‘Yes.’ Read more.
• We are enhancing our document capabilities for guarantor documents that will be signed by an attorney in fact using power of attorney. This is an ongoing project that will continue going forward as we identify documents that need code changes to allow for this functionality. Read more.
• In November of 2023, the Idaho Department of Finance issued a notice of rulemaking that would no longer require lenders to disclose to the borrower the services that will be provided to the borrower. If the rulemaking became effective, the rule (IDAPA 12.01.10.050(1)) would be completely removed. However, the rulemaking would only become effective upon the adjournment of the Second Regular Session of the Sixty -seventh Idaho Legislature after approval. The Legislature approved the rulemaking and adjourned on August 1, 2024. Accordingly, as there is no longer a requirement for Cx2688 (ID Mortgage Banker Application) we will be retiring this document from our generic offerings. Read more.
• A lender may not include a prepayment penalty in a covered loan unless the lender offers the customer the option of choosing a loan product without a prepayment penalty. The terms of the offer shall be in writing and initialed by the customer. The offer shall be in a clear and conspicuous format and include a disclosure. While the statute makes it clear that the disclosure must be on an offer, out of an abundance of caution we have added the disclosure to our prepayment disclosure documents for Wisconsin. Read more.

Compliance News

• After industry feedback, on August 6, 2024, Fannie Mae, Freddie Mac, and FHA released announcements regarding the extension of the implementation of ROV policy requirements to October 31, 2024. The original timeline was set for August 29, 2024 for Fannie Mae and Freddie Mac, and September 2, 2024 for FHA.
  
  Docutech previously announced the creation a new generic document entitled “Notice of Right to Request a Reconsideration of Value (ROV)” (Cx27674). This is a customizable document, but Docutech has included generic default language in compliance with Fannie Mae Single Family Selling Guide B4-1.3-12, Freddie Mac Single Family Seller Servicer Guide 5604.4, and FHA Single Family Housing Policy Handbook 4000.1 II.A.3.a.ix.A & II.B.4.a.ii.H.1. Read more.

For full details related to document and mortgage compliance updates, sign up for real-time Compliance updates at info.docutech.com/subscribe-compliance.

The above information is for informational purposes only and is not and may not be construed as legal advice. No third-party entity may rely upon anything contained herein when making legal and/or other determinations regarding its practices, and such third party should consult with an attorney prior to embarking upon any specific course of action.