March Compliance Recap: RON Updates, Lender Letter 2020-03 and More

March was a tumultuous month for all of us, as everyone across industries and even continents attempted to establish a new normal amid the COVID-19 outbreak.

While there may be additional rules related to helping lenders address the economic challenges of the pandemic, for now, the updates published in March were primarily updates that had already been in the works. However,  FNMA released an updated version of Lender Letter 2020-03 to provide clarification and special rules for the handling of mortgage loans amid the pandemic. This update published March 31, and we are working to determine any impact to our document library. We will keep you updated as the situation progresses. 

Along those same lines, 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.

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

State and Investor Compliance News

GSEs: The GSEs announced that they will not purchase an ARM with an application date on or after October 1, 2020, which uses LIBOR as its index. To raise awareness of this fact, we have created a new, global data integrity check warning that will automatically trigger under certain conditions. Learn More.

FNMA. FNMA revised certain Fannie Mae-only notes and riders to reinsert the definition of “Maximum Rate” in Section 4(D). The revised documents are available to use now, but must be used starting June 1, 2020. Learn More.

We have completed incorporating the “fallback” language into our standard, conventional ARM notes and ARM riders. For a full list of documents, click here.

On March 31, 2020, FNMA released an updated version of Lender Letter 2020-03, providing clarification and special rules for the handling of certain mortgage loans due to the coronavirus pandemic. We are currently reviewing this letter to determine any impact to our document library and/or systems and evaluating any necessary changes and will report back. Learn More.

Wisconsin. WI AB 293 (2019) which practically repeals and replaces Chapter 137 of Wisconsin’s Statutes (as well as Wis. Stat. Ann. § 706.07) with a new Chapter 140, which promulgates the requirements for notarial certificates. These amendments take effect on May 1, 2020. We are reviewing this law to see how it may affect documents and will continue to provide updates. Learn More.

Idaho. On March 11, 2020 Gov. Brad Little (R) signed into law ID HB 401 (2020), which amends several sections of Idaho’s Code governing mortgage companies – most notably repealing Chapter 28, Title 26. We are currently reviewing these changes and will provide updates as needed. Learn More.

Document Changes

• 8821 Tax Information Authorization (Cx801)– a duplicate of IRS Form 8821 – will be updated to match the latest version of the official form. Learn More.
• For Your Protection Get a Home Inspection (Cx2283)will be overhauled to match the latest version from HUD. Learn More.
• Per the requirements of the Office of Recorder of Deeds for Greene County, Pennsylvania, we are increasing the font size to 12 point for the following Greene County, Pennsylvania recordable instruments. Learn More.
• As previously announced, final amendments to 7 Texas Administrative Code Pt. 80 & 81 were made this past November (with an effective date of May 1, 2020). Upon request, we provide duplicates of several relevant forms, which will be modified to match the latest versions created by these amendments. Learn More.
• Based on past informal guidance from the CFPB, we are leaving the “Escrow Waiver Fee” row blank when no waiver fee is charged. This change took effect on March 24, 2020. Learn More.
• The Nevada Division of Mortgage Lending publishes model/official forms, which can (or are required to) be used to comply with certain disclosure laws. These changes took effect on March 24, 2020. Learn More.
• The Federal Home Loan Mortgage Corporation (“FHLMC” or “Freddie Mac”) retired their convertible ARM loan documents quite some time ago. Consequently, we have discontinued support for several documents. Learn More.
• Although we have had Military Lending Act Disclosure documents available “upon request” for some time, we are now configuring them to be generic. Note that these documents will only be triggered in the appropriate packages when the print trigger “Print Military Lending Act Disclosure” (FI 106114) is set to “Yes.” Learn More.
• On March 20, 2020 the Massachusetts Department of Fire Services released a memorandum temporarily permitting the inspections of smoke detectors and carbon monoxide alarms to be deferred due to the pandemic. In order to provide a means to meet the conditions outlined above, we will now provide new Cx23809 as an “upon request” document. Learn More.

You can always find all of the details related to every compliance change and commentary from our industry-leading compliance team on our compliance blog. Subscribe today to stay up to date.