Compliance Calendar for July 2018

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Expedited Funds Availability (Check Collection and Return Provisions)

Effective: July 1, 2018
Industry: Consumer Lending
Source: Other   Regulation CC →
Tag: Banking
  • All returned checks, both paper and electronic, must be returned by 2:00 p.m. on the second business day
  • Depositary bank must have arrangements to accept returned checks electronically
  • Creates new indemnities for losses caused by unauthorized or duplicate electronically-created items and returned deposits using a remote capture service (app)

Imminent Default Evaluation for a Conventional Mortgage Loan Modification

Effective: July 1, 2018
Industry: Mortgage Servicing
Source: Fannie Mae   LL-2017-08 →
Tags: Delinquent Loans, Loss Mitigation
  • We are introducing a new imminent default evaluation that will simplify the evaluation process and result in a better user experience for both servicers and borrowers.
  • The new evaluation was jointly developed with Freddie Mac at the direction of the Federal Housing Finance Agency, to determine if a borrower’s mortgage payment is in imminent default for purposes of determining eligibility for a conventional mortgage loan modification.
  • As of the effective date provided below, this imminent default evaluation replaces Freddie Mac’s Imminent Default Indicator™ (IDI™) as described in Servicing Guide D2-1-02, Using Freddie Mac’s Imminent Default Indicator and Evaluating the Borrower Using Imminent Default Indicator in F-1-14, Preparing to Implement a Workout Option.
  • Servicers are encouraged to implement these policy changes as early as February 1, 2018; however, servicers must begin evaluating borrowers for imminent default for a conventional mortgage loan modification no later than July 1, 2018.
  • The Servicer will ultimately be delegated to make the imminent default determination.

Lender Internal Audit Requirements

Effective: July 1, 2018
Industry: Mortgage Lending
Source: Fannie Mae   SEL-2017-10 →
Tag: Internal Audit

Currently, the Selling Guide contains a high-level requirement for lender internal audit and management control systems. With this update, we added additional details about our requirements for sellers/servicers. All sellers/servicers must have internal audit and management controls to evaluate and monitor the overall quality of their loan production and servicing.

  • The procedures must be independent of all key functions of the loan manufacturing process and the servicing processes that they review.
  • The seller/servicer’s lines of reporting must reflect the independence of the audit process at all levels.
  • The audit function must not share any reporting lines with the functional areas that it reviews.
  • The audit function must report directly to the seller/servicer’s senior management and/or board of directors.
  • Exceptions are permitted in situations in which the size of the seller/servicer’s organization is insufficient to support adequate resources to allow for separation of these functions.
  • The procedures must be consultative, so that they help the seller/servicer accomplish its objectives by bringing a systematic, disciplined approach to evaluating and improving the effectiveness of risk management, control, and governance processes.
  • As part of our efforts to not duplicate content in both Guides, Servicing Guide A1-1-01, Application and Approval of Seller/Servicer has been updated to provide a reference to the applicable content in the Selling Guide.

Imminent Default Evaluation for a Conventional Mortgage Loan Modification

Effective: July 1, 2018
Industry: Mortgage Servicing
Source: Freddie Mac   Bulletin 2017-22 →
Tags: Delinquent Loans, Loss Mitigation
  • In response to industry feedback, at the direction of the FHFA, under the Servicing Alignment Initiative and jointly with Fannie Mae, we are eliminating the Imminent Default Indicator® test and replacing it with a more transparent, rules-based approach.
  • Servicers may begin implementing the changes below once Workout Prospector® is updated to accommodate the intake of imminent default data (but not before then) and must implement the changes below no later than July 1, 2018.
  • The Servicer will ultimately be delegated to make the imminent default determination.

Electronic Status Reporting

Effective: July 1, 2018
Industry: Mortgage Servicing
Source: USDA   USDA LINC Training and Resource Library →
Tag: Investor Reporting

USDA Rural Development (RD) will adopt enhanced Electronic Status Reporting (ESR) on July 1, 2018.  At that time, all loan servicers are required to report for the period ending June 30, 2018 using the new Electronic Data Interchange (EDI) format or by using the web screens on USDALINC (https://usdalinc.sc.egov.usda.gov/RHShome.do).  Below are the new business reporting requirements:  

  1. Monthly default status reporting will be enhanced to add additional data fields and default status codes.  The current EDI Transaction Set 264 will continue to be used but will require many new data fields.  The new default reporting structure will be similar to that of the Federal Housing Administration (FHA).
  2. Quarterly status reporting will change in frequency from quarterly reporting to monthly reporting.  The EDI Transaction set 203 will continue to be used and will not change in structure.  However, the statuses of all loans will now be required on a monthly basis. 
  3. Loan servicers will now be required to perform corrections of their status reports, similar to what is required by FHA.

The new “ESR Implementation Guide for the July 1, 2018 Effective Date” and “ESR Implementation Guide Release Notes” are located on the USDA LINC Training and Resource Library.  Loan servicers will need to review the Implementation Guide and develop their EDI files in accordance with the requirements in the guide.

Bureau of Real Estate

Effective: July 1, 2018
Industry: Mortgage Lending
Source: California   Senate Bill 173 →
Tags: Compliance - Initial Disclosures, Compliance - Closing Disclosures, California
  • renames the CalBRE the DRE; and
  • removes the CalBRE from the Department of Consumer Affairs (DCA) to classify it as an independent department under the Business, Consumer Services and Housing Agency (BCSH)

Potential impacts to documents that must now reference Department of Real Estate:

  • CA Fair Lending Notice
  • CA Mortgage Loan Disclosure Statement 

Compliance Policies and Procedures

Effective: July 1, 2018
Industry: Mortgage Lending
Source: Connecticut   Connecticut Public Act No. 17-233 →
  • Requires non-depository licensees to maintain and enforce compliance policies and procedure

Notary Law Update

Effective: July 1, 2018
Industry: Mortgage Lending
Source: Texas   TX House Bill 1217 →
Tags: Texas, Notary
  • Allows Notaries to apply for an online Notary commission and perform electronic notarizations by means of audio-video communication.

Foreclosure with Deceased Owner

Effective: July 1, 2018
Industry: Mortgage Servicing
Source: Virginia   Virginia Amends Provisions Regarding Foreclosure →
Tags: Virginia, Foreclosure

Notice of Sale Requirements When the Owner is Deceased

  • If notification is received that the owner of the property to be sold is deceased, the notice required shall be given to: 
    • the last known address of such owner as such address appears in the records of the party secured; 
    • any personal representative of the deceased’s estate whose appointment is recorded among the records of the circuit court where the property is located, at the address of the personal representative that appears in such records; 
    • and any heirs of the deceased who are listed on the list of heirs recorded among the records of the circuit court where the property is located, at the addresses of the heirs that appear in such records.

Disposition of Surplus from Trustee's Sale When the Owner is Deceased

  • If notification is received that the owner of the property to be sold is deceased prior to the trustees sale, and the deed of trust contains no definite provision for the distribution of any surplus in the event of the death of the grantor or his successors, then 
    • any surplus of the proceeds of the sale remaining in the hands of the trustee shall be applied in order of their priority to the the remaining subsequent debts and obligations secured by the deed, and
    • any liens of record inferior to the deed of trust under which the sale is made, with lawful interest, shall be paid by the trustee to the personal representative of the decedent.
  • Any funds so coming into the hands of the personal representative shall constitute assets for the payment by him or her of any debts and demands against the decedent’s estate remaining unsatisfied after the personal estate has been exhausted.

Handbook-1-3555 Chapter 18 Changes

Effective: July 1, 2018
Industry: Mortgage Servicing
Source: USDA   View Chapter 18 →
Tags: Delinquent Loans, Loss Mitigation

On July 1, 2018*, Chapter 18, HB-1-3555 will be updated to amend guidance around servicing of non-performing loans.  Details on these changes are provided in this advanced copy of Chapter 18 that will be published and effective July 1, 2018*.

*Our original communication stated May 1, 2018; however, based on feedback from servicers, we have extended the implementation date to July 1, 2018.

To assist in identifying the changes we are providing a HB-1-3555 Revision Guide, outlining revisions implemented with this publication.

Non-Judicial Foreclosure Fees

Effective: July 1, 2018
Industry: Mortgage Servicing
Source: Fannie Mae   Fannie Mae SVC-2018-02 Servicing Guide Updates →
Tags: Foreclosure, Alabama, Colorado, Georgia, Guam, Maryland, Michigan, Minnesota, Missouri, Montana, North Carolina, Rhode Island, Texas, Virginia
  • The Allowable Foreclosure Attorney Fees Exhibit has been updated to reflect a change to the maximum allowable foreclosure attorney fees for Fannie Mae mortgage loans secured by properties in Alabama, Colorado, Georgia, Guam, Maryland, Michigan, Minnesota, Missouri, Montana, North Carolina, Rhode Island, Texas, and Virginia. 
  • These new fees apply to all matters referred to counsel for initiation of foreclosure proceedings, regardless of referral date, as long as the matter is still active as of March 14, 2018. 
  • Servicers are encouraged to implement the new fees for the impacted files as soon as possible, but must do so no later than July 1, 2018. 
  • Servicers may exercise reasonable discretion in determining how to implement the fees, including working as needed with the law firm or an applicable invoicing technology provider.

Notary Law Update

Effective: July 1, 2018
Industry: Consumer Lending, Mortgage Lending, Mortgage Servicing
Source: Indiana   Senate Bill 372 →
Tags: Indiana, Notary

• Notary filing/registration requirements to register a mark, parts of a mark, or a composite of a mark

• Registration of a mark under this chapter is effective for a term of five (5) years from the date of registration 

• The registration may be renewed for an additional five (5) year term commencing at the end of the expiring five (5) year term

• A change in name of the registrant must be filed and registered

Electronic Powers of Attorney, Trusts, and Wills

Effective: July 1, 2018
Industry: Consumer Lending, Mortgage Lending, Mortgage Servicing
Source: Indiana   Indiana House Bill 1303 Electronic Powers of Attorney, Trusts, and Wills →
Tags: Indiana, Power of Attorney

Electronic Will  It allows a testator to execute an electronic will. It specifies requirements pertaining to the: (1) creation, (2) attestation, and (3) execution; of an electronic will. It allows video recordings of an electronic will’s execution to be used for demonstrating: (1) proper execution of a will, (2) testator intent, (3) the mental state of a testator, (4) the absence of undue influence or duress with respect to a testator, and (5) verification of the individual identities involved in the execution of an electronic will. It provides exemplar instructions and advisory language to testators with respect to electronic wills. It specifies how to revoke an electronic will. It allows certain electronic records to be used in place of an electronic will. It specifies how to transfer possession of an electronic will from the current custodian to a successor custodian. It specifies the responsibilities of an electronic will custodian. It specifies how to amend, destroy and revoke an electronic will. It creates a presumption of regularity for electronic wills. It allows electronic wills to be deposited with the clerk of a probate court in certain instances. It explains the probate process for electronic wills.

Electronic Trust – It allows a settlor to create and execute an electronic trust instrument. It specifies how to create and execute an electronic trust instrument. It specifies how to amend or revoke an electronic trust instrument. It specifies who may act as a custodian for an electronic trust instrument. It specifies how an electronic trust instrument may be delivered or transferred. It specifies how to destroy an electronic trust instrument. It creates a presumption of regularity with respect to electronic trust instruments.

Electronic Power of Attorney  It allows a person to create and execute an electronic power of attorney. It specifies how to execute a valid electronic power of attorney. It specifies how to amend or revoke an electronic power of attorney. It specifies who may act as a custodian for an electronic power of attorney. It specifies how to destroy an electronic power of attorney. It creates a presumption of regularity with respect to electronic powers of attorney. It defines certain terms.

Indiana Permissible Fee and Payment Processing Updates

Effective: July 1, 2018
Industry: Consumer Lending, Mortgage Lending, Mortgage Servicing
Source: Indiana   Indiana House Bill 1397 →
Tags: Indiana, Fees, Cash Management

Permissible Fees 

  • A charge not to exceed twenty-five dollars ($25) for each
    returned payment, including an electronic funds transfer
  • A charge not to exceed twenty-five dollars ($25) for a
    skip-a-payment service
  • A charge not to exceed ten dollars ($10) for an optional
    expedited payment service
  •  A charge for a GAP agreement, where a GAP agreement or GAP coverage may not be required by the seller, and that fact must be disclosed in writing to the consumer and the term must be disclosed in writing.

Consumer credit sales, including revolving charge accounts

  • A creditor shall credit a payment to a consumer's account as of the date of receipt, except when a delay in crediting does not result in a finance charge or other charge, including a delinquency charge. A delay in posting does not violate this section so long as the payment is credited as of the date of receipt.
  • If a creditor specifies in writing requirements for the consumer to follow in making payments, but accepts a payment that does not conform to the requirements,the creditor shall credit the payment within five (5) days of receipt of the payment.
  •  If a creditor fails to credit a payment as required by this section in time to avoid the imposition of a finance or other charge, including a delinquency charge, the creditor shall adjust the consumer's account so that the charges imposed are credited to the consumer's account during the next payment period.

Notice to Tenant Foreclosure Notice Revisions

Effective: July 1, 2018
Industry: Mortgage Servicing
Source: Virginia   Bankers Advisory Alert →
Tags: Virginia, Foreclosure

The Commonwealth of Virginia amended its provisions regarding notice to tenant in the event of a foreclosure. These provisions are effective on July 1, 2018. Revisions include new required disclosure language for the following:

Notice to Tenant or Lessee by Landord of Commercial or Other Nonresidential Premises

  • Failure to pay certain rents after five days’ notice forfeits right of possession
  • Tenant to maintain dwelling unit
  • Wrongful failure to supply heat, water, hot water, or essential services
  • Landlord’s noncompliance as defense to action for possession for nonpayment of rent
  • Security deposits
  • Landlord may obtain certain insurance for tenant
  • Confidentiality of tenant records
  • Failure to deliver possession

Notice to Tenant by Landlord of a Dwelling Unit Used a Single-Family Residence

  • Notice to the tenant that the landlord has received a notice of a mortgage default, mortgage acceleration, or foreclosure sale within five business days after written notice from the lender is received by the landlord
  • If the landlord fails to provide the notice required by this section, the tenant shall have the right to terminate the rental agreement upon written notice to the landlord at least five business days prior to the effective date of termination

Other Amendments

  • Defines prohibited provisions in rental agreements 
  • Provides for the early termination of a rental agreement by military personnel

Indiana Electronic Wills, Trusts, and Powers of Attorney

Effective: July 1, 2018
Industry: Consumer Lending, Mortgage Lending, Mortgage Servicing
Source: Indiana   Bankers Advisory Alert →
Tag: Indiana
  • New provisions create a presumption of regularity for electronic wills, trust instruments, and powers of attorney in Indiana.
  • If an electronic will is properly signed, witnessed, and maintained in compliance with this chapter, all the normal presumptions that apply to a valid traditional paper will apply to that electronic will.
  • Enacts new rules related to the lawful execution, amendment, and revocation of inter vivos trusts signed electronically. 
  • Enacts new rules related to the lawful execution, amendment, and revocation of powers of attorney signed electronically.

Indiana UCCC Dollar Amounts for High Cost Loans

Effective: July 1, 2018
Industry: Mortgage Lending, Mortgage Servicing
Source: Indiana   Indiana Emergency Rule →
Tag: Indiana

Indiana approved an Emergency Rule to amend 750 IAC 1-1-1(a) to change the dollar amounts in the Uniform Consumer Credit Code. Amends 750 IAC 1-1-1(b) to change the dollar amount for high cost loans under IC 24-9-2-8. Effective July 1, 2018.

Sec. 1. (a) The dollar amounts in IC 24-4.5 which are required to be adjusted by IC 24-4.5-1-106, as amended, shall, on July 1, 2018, be as set forth in each of the following Indiana Uniform Consumer Credit Code sections.

Amended Dollar Amounts Provisions Relating To 
IC 24-4.5-2-201(7) 2,000/4,000 Graduated rate (sales) 
IC 24-4.5-2-201(8) 51 Minimum credit service charge 
IC 24-4.5-2-203.5(5) 19 Delinquency charge (sales) 
IC 24-4.5-2-407(4) 1,140/4,000 Security interest (sales or leases) 
IC 24-4.5-3-201(7) 51 Minimum loan finance charge 
IC 24-4.5-3-203.5(5) 19 Delinquency charge (loans) 
IC 24-4.5-3-508(6) 2,000/4,000 Graduated rate (supervised loans) 
IC 24-4.5-3-508(7) 51 Minimum loan finance charge 
IC 24-4.5-3-510(2) 4,000 Land as security (loans) 
IC 24-4.5-3-511(2) 1,140/4,000 Maximum loan term 
IC 24-4.5-4-301(4) 1,140 Property insurance 
IC 24-4.5-5-103(7) 4,000 Deficiency judgment 
IC 24-4.5-7-104(2) 605 Principal loan amount 
IC 24-4.5-7-201(4) 605 Graduated rate scale 
IC 24-4.5-7-404(3) 605 Combined loan amounts  

(b) The dollar amount change which is required to be adjusted by IC 24-9-2-8, as amended, shall be on July 1, 2018, as follows:

Amended Dollar Amounts Provisions Relating To 
IC 24-9-2-8 48,000 High cost home loan  

(c) The dollar amount changes set forth in IC 34-55-10-2, as amended, which are required to be adjusted by IC 34-55-10-2.5, as amended, shall be as follows:

Amended Dollar Amounts Provisions Relating To 
IC 34-55-10-2(c)(1) 19,300 Real estate family residence 
IC 34-55-10-2(c)(2) 10,250 Other real estate or tangible property 
IC 34-55-10-2(c)(3) 400 Intangible personal property 

Indiana Recording Requirements

Effective: July 1, 2018
Industry: Mortgage Lending, Mortgage Servicing
Source: Indiana   Indiana HRA 1320 →
Tags: Indiana, Closing, Payoffs-Reconveyances
  • Amends the definition of "substantial property interest of public record" for purposes of the tax sale statutes to specify that: (1) the term means title to or interest in a tract that is within the tract's chain of record title and either recorded or properly indexed in the county in which the tract is located; and (2) chain of record title includes instruments executed by the owner and recorded within the five day period before the date the owner acquires title to the tract. 
  • Eliminates the requirement that a person that redeems property sold in a tax sale must pay an amount equal to the amount deposited in the tax surplus fund at the time of the tax sale. Continues current law requiring the redeeming party to pay 5% interest on that money. 
  • Requires that a conveyance recorded after June 30, 2007, must include a statement specifying the mailing address for tax statement purposes and the mailing address of the grantee. Requires that the mailing address of the grantee be a street address or a rural route address.

Florida Mortgage Brokering

Effective: July 1, 2018
Industry: Mortgage Lending
Source: Florida   Florida House Bill 193 →
Tag: Florida

Effective July 1, 2018. 

  • Provides exemption from regulation under parts I & II of ch. 494, F.S., for certain securities dealers, investment advisors, & associated persons; 
  • Provides requirements for certain solicitations & referrals.

Iowa Mortgage Releases

Effective: July 1, 2018
Industry: Mortgage Servicing
Source: Iowa   House File 2232 →
Tags: Iowa, Payoffs-Reconveyances
  • Closed-end credit: Within 30 days of payment in full, shall execute and record an instrument of satisfaction
  • Open-end credit: If the mortgage secures a revolving line of credit, future advances, or other future obligations, the mortgagee is not required to file a satisfaction upon payment in full unless the mortgagor makes a written request. Mortgagor must file the release within 30 days after payment in full or such written request is made, whichever occurs later.
  • Failure to timely release the lien may result in all actual damages and a penalty of $500, plus reasonable attorney fees incurred by the aggrieved party.

Fannie Mae Servicing Guide Announcement SVC-2018-03 Changes to Servicer Requirements Regarding Escrow Shortages

Effective: July 1, 2018
Industry: Mortgage Servicing
Source: Fannie Mae   Announcement SVC-2018-03 →
Tag: Escrow-Impounds

In response to servicer feedback and in alignment with Freddie Mac, we are updating B-1-01, Administering an Escrow Account and Paying Expenses, to allow servicers more flexibility when collecting an escrow shortage associated with a mortgage loan modification. With this change, we have eliminated the requirement to spread the escrow shortage over a period of 60 months. When the servicer identifies an escrow shortage during either the initial analysis at the time of the modification or the next annual escrow analysis, the servicer is authorized to collect the shortage amount over a term of up to 60 months, unless the borrower decides to pay the shortage up-front.

Effective Date
Servicers may implement this policy change immediately; however it must be implemented for any escrow analysis
performed on or after July 1, 2018 that is associated with a mortgage loan modification, including a Fannie Mae Extend
Modification for Disaster Relief, which was introduced as temporary guidance in Lender Letter LL-2017-09.


Freddie Mac Bulletin 2018-6 Mortgage Modifications

Effective: July 1, 2018
Industry: Mortgage Servicing
Source: Freddie Mac   Bulletin 2018-6 →
Tag: Escrow-Impounds

Escrow repayment
Effective July 1, 2018; however, Servicers may implement earlier if they are able to do so

We are updating the mortgage modification requirements for the repayment of Escrow shortages and Escrow advances.

Escrow shortage repayment
We are updating the requirements for the repayment of Escrow shortages (i.e., the amount needed to establish the Escrow account or to bring it current that, together with the monthly Escrow payment included in the monthly Mortgage payment, will be sufficient to pay the next twelve months of property taxes and insurance premiums when they are due).

Previously, if a Borrower was unable to pay an Escrow shortage as a lump sum, the Servicer was required to spread the shortage over 60 months as part of the monthly payment (“Projected Monthly Escrow Shortage Payment”) on the modified Mortgage.

As a result of Servicer feedback and to provide greater flexibility, we are updating our requirements to permit the Servicer to spread the Escrow shortage amount equally over a period of at least 12 months, not to exceed 60 months.

If a future Escrow analysis identifies a subsequent Escrow shortage, the Servicer must combine the remaining amount due from the initial Escrow shortage with the amount due as a result of the new Escrow analysis. The Servicer must then follow the same steps described in the previous paragraph, using the new combined balance. The resulting term may be extended to a period of up to 60 months. 

Guide impact: Section 9206.15 

Escrow advance repayment for Extend Modification for Disaster Relief
With most mortgage modifications, any Escrow advances are capitalized and added to the UPB. However, this is not possible with the Extend Modification for Disaster Relief because it does not allow for the capitalization of arrearages. Therefore, in cases where funds were advanced by the Servicer or are to be advanced and paid to a third party prior to the date the Borrower executes the mortgage modification agreement, the Servicer must recoup from the Borrower all Escrow payments it advanced either via a lump sum payment, or spread them equally over a period of at least 12 months, not to exceed 60 months.

Process for Escrow repayment plans
Below is the process for spreading an Escrow shortage and/or advance over a period of 60 months as well as over a period of less than 60 months:

Process for Escrow shortage and/or advance repayment

If the Servicer spreads the Escrow shortage and/or advance over a period of….

Then the Servicer must…

60 months

Adhere to existing guidelines and processes as described in the Guide and the Workout Prospector Users’ Guide

Less than 60 months

Bypass the existing guidelines and processes in the Guide and the Workout Prospector Users’ Guide and instead: · Calculate the monthly Escrow shortage and/or advance repayment amount separately; and · Populate the “Ancillary Monthly Fees” field on the “Modeling Attributes screen” in Workout Prospector® with the monthly amount owed under the Escrow repayment plan

Home Affordable Modification Program

We are updating the Guide to remove requirements regarding the eligibility and evaluation of a Borrower and processing of a modification for a Mortgage modification under the Home Affordable Modification Program (HAMP) since all HAMP modifications were required to have a Modification Effective Date on or before December 1, 2017. This includes deleting Sections 9205.2, 9205.4 and 9205.6 through 9205.10, 9205.15 and 9205.19. We are retaining requirements in the Guide regarding HAMP reporting and incentives as well as any other related requirements that remain relevant for Servicing Mortgages modified under HAMP.

Guide impacts: Sections 2406.4, 3302.2, 3403.1, 7101.4, 8102.2, 9102.5, 9102.7, 9202.1, 9202.2, 9202.16, 9202.17, 9205.1 through 9205.16, 9205.18 through 9205.20, 9206.13, 9211.1, 9401.8, Guide Exhibits 4, 5, 7, 82 and 96, Form 981 and Glossary J-Q 

Iowa Power of Attorney Act

Effective: July 1, 2018
Industry: Consumer Lending, Mortgage Lending, Mortgage Servicing
Source: Iowa   Bankers Advisory Alert →
Tags: Iowa, Power of Attorney
  • An agent’s powers can now be terminated if the agent is named as the abuser in an abuse report regarding the principal’s financial resources, or if the agent is convicted of dependent adult abuse related to the principal’s financial resources.
  • Allows any person who becomes aware of pending criminal charges of dependent adult abuse against a principal to petition the court to construe a power of attorney or to review an agent’s conduct.
  • The court, upon receiving such a petition, may suspend the agent’s power of attorney and may appoint a guardian ad litem to represent the principal. Under this bill, the guardian ad litem must be a practicing attorney.

Oklahoma Annual Adjustment to Dollar Amounts in the Consumer Credit Code

Effective: July 1, 2018
Industry: Mortgage Lending, Mortgage Servicing
Source: Oklahoma   Bankers Advisory →
Tag: Oklahoma

In the state of Oklahoma, various dollar amounts set forth in the Uniform Consumer Credit Code change effective July 1 of each “qualifying year.” A qualifying year is any year in which the percentage of change (calculated according to the nearest whole percentage point) between the Index at the end of the preceding year and the Reference Base Index is ten percent (10%) or more. The calculations for dollar amount changes use figures from the Consumer Price Index Indicators, Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), issued each December by the Bureau of Labor Statistics.

https://www.ok.gov/okdocc/docu...

New Comptroller's Handbook Booklet: Recovery Planning

Effective: July 1, 2018
Industry: Consumer Lending
Source: Other   Comptroller's Handbook M-RP Recovery Planning →
Tag: Banking

This new handbook establishes recovery plan guidelines, setting forth the standards for the design and execution of a covered bank's recovery plan, and the standards for management’s and the board’s (or appropriate board committee’s) responsibilities in connection with the recovery planning process and the recovery plan.

The guidelines have a phased-in compliance period: 

  • covered banks with at least $750 billion in average total consolidated assets as of January 1, 2017, are required to comply by July 1, 2017; 
  • covered banks with at least $100 billion and less than $750 billion are required to comply by January 1, 2018; and 
  • covered banks with at least $50 billion and less than $100 billion are required to comply by July 1, 2018.

Minnesota Consumer Credit Code Dollar Adjustments

Effective: July 1, 2018
Industry: Consumer Lending, Mortgage Lending, Mortgage Servicing
Source: Minnesota   MN Consumer Credit Code Adjustments →
Tags: Minnesota, Fees

Dollar amounts indexed in the Regulated Loan Act, Minnesota Statutes, Chapter 56, and the Minnesota Consumer Credit Code, Minnesota Statutes, Section 47.59, will increase effective July 1, 2018.

Please refer to the source link for the most recent adjustment table.

Georgia Power of Attorney Act and Trusts

Effective: July 1, 2018
Industry: Consumer Lending, Mortgage Lending, Mortgage Servicing
Source: Georgia  
Tags: Georgia, Power of Attorney, Trusts

The Power of Attorney Act is amended to:

  • revise the short title; 
  • provide for definitions; 
  • change provisions relating to the application of Chapter 6 of this title; 
  • update cross-references to federal law; 
  • provide for related matters; 
  • repeal conflicting laws; and 
  • for other purposes.

Chapter 12 of Title 53 of the Official Code of Georgia Annotated, relating to trusts, is amended to:

  • change provisions relating to minor or unborn beneficiaries; 
  • change provisions relating to nonjudicial settlement agreements, the modification and termination of noncharitable trusts, and distribution to another trust; 
  • change provisions relating to modification or termination of uneconomic trusts; 
  • provide for related matters; 
  • provide for an effective date; 
  • to repeal conflicting laws; and 
  • for other purposes.

Texas Modifies Provisions Regarding Notaries

Effective: July 1, 2018
Industry: Consumer Lending, Mortgage Lending, Mortgage Servicing
Source: Texas   Texas House Bill 1217 →
Tag: Notary

The state of Texas modified its provisions relating to notaries. These provisions are effective on July 1, 2018. This alert was originally published on 06/02/2017 and is being re-sent as a reminder regarding legislation to become effective within the next two weeks.

Summary

Relating to appointment of and performance of notarial acts by an online notary public and online acknowledgment and proof of written instruments; authorizing a fee and creating a criminal offense.

Washington Notarial Acts

Effective: July 1, 2018
Industry: Consumer Lending, Mortgage Lending, Mortgage Servicing
Source: Washington   Bankers Advisory Alert →
Tags: Washington, Notary

The Washington Department of Licensing (the “Department”) adopted provisions relating to notaries that include replacing all existing sections as well as adding new sections to Chapter 308-30 of the Washington Administrative Code in order to implement the provisions of the Revised Uniform Law on Notarial Acts. Changes include:

  • Application process for notary public commission
  • Approval or denial of application
  • Term of a commission
  • Application fees
  • Acquiring official seal or stamp
  • Replacement of lost or stolen official seal or stamp
  • Notary signature
  • Requirements for notarial acts
  • Authorized electronic notarial acts
  • Completion of electronic notarial certificate
  • Certification of electronic notarial acts
  • Electronic notarial signature
  • Electronic Notarial stamp
  • Journal of notarial acts
  • Fees for Notarial acts
  • Testimonials
  • Forms
  • Change of name or address
  • Termination or suspension of commission or endorsement

North Carolina Notice of Foreclosure Sale Cancellations

Effective: July 1, 2018
Industry: Mortgage Servicing
Source: North Carolina   North Carolina Senate Bill 168 →
Tags: North Carolina, Foreclosure
  • Must deliver a written notice of cancellation of the sale to the Clerk of Superior Court, including the information required.  
  • In the event the notice of cancellation is not received by the Clerk prior to the scheduled time of the sale, the person excising the power of sale, or his or her agent or attorney, must publicly announce the cancellation of the sale, attach to or enter on the original notice of sale posted at the courthouse door, a notice of cancellation, give written or oral notice of cancellation to each party entitled to receive the notice of sale, and hand-deliver written notice of cancellation to the Clerk's office.
  • If a scheduled sale has been withdrawn, the notice of cancellation shall remain in the location at the county courthouse for no less than 30 days. If the sale has been postponed, that notice shall remain in that location until it is replaced by a notice of a rescheduled sale or of a withdrawn sale.

USDA Updates to Handbook 1-3555

Effective: July 2, 2018
Industry: Mortgage Lending, Mortgage Servicing
Source: USDA   USDA PN 514 →
Tags: Loss Mitigation, Foreclosure, Closing

Form RD 3550-25 ‘‘Loan Closing Instructions and Loan Closing Statement’’ was released on SPECIAL PN dated June 21, 2018.

The Form and FMI was partially revised to have the Loan Approval Official identify the lien position for the Agency loan and any leveraged loan(s) and to establish a time frame for the Loan Approval Official to complete their certification on the loan closing statement. Other revisions include: instructions for the Closing Agent/Attorney to confirm that funds have been received prior to the schedule closing; a new field to identify seller contributions; updated overnight mail instructions; eliminating the requirement for the Closing Agent/Attorney to send signed copies to the designated Rural Development (RD) office and faxed copies to the Customer Service Center (now only the original will be returned to the designated RD office who will then be responsible for submitting the necessary copies to the Customer Service Center); and clarification of time frames in which final/recorded documents must be returned to RD after closing.

RD Handbook Changes HB-1-3555

Chapter 18:

  • Various formatting and language changes for readability and clarity;
  • Paragraph 18.7, modified to better clarify the foreclosure process and timelines;
  • Section 4, language added to allow for additional loss mitigation options in presidentially declared disaster areas;
  • Attachment 18-A, Section 5 is re-written to allow for new loss mitigation waterfall. Re-designed Traditional Modification and combined both Traditional and Special Loan servicing into one section; and
  • Attachment 18-A, Section 6 is removed and added to Section 5.

Kentucky Amends Provisions Regarding Contract Obligations and Interest Rates

Effective: July 12, 2018
Industry: Consumer Lending, Mortgage Lending, Mortgage Servicing
Source: —   Kentucky Amends Provisions Regarding Contract Obligations and Interest Rates →
Tag: Kentucky

The Commonwealth of Kentucky amended its provisions relating to contracts; when parties are bound to the interest rate in a contract and the interest rate parties are entitled to receive after default. These provisions are effective on July 12, 2018 (or 90 days following adjournment of the current legislative session).

Any party to a contract governed by Kentucky Revised Statutes 360.010(1) is bound to the interest rate as it is expressed in the agreement (K.R.S. 360.010(2)).  The party entitled to be compensated interest after default at the rate of interest as is expressed in the contract or obligation prior to the default. If the interest rate expressed in the agreement is a variable rate, then the rate from default to judgment is calculated and adjusted according to the terms of the agreement (K.R.S. 360.010(3)).  If the agreement does not contain a rate of interest, then the party entitled to be paid will receive interest, from default to judgment, at the legal rate of interest (K.R.S. 360.010(4)).

A new section of Kentucky Revised Statutes Chapter 371 is created as part of these amendments. This new section states that the obligation of an obligor to pay a debt is not extinguished by any action taken by an obligee; an obligee has the right to maintain its own records and may consider the obligation as not collectible, but this will not remove the obligation from the obligor’s responsibilities (K.R.S. 371(1)). The obligor maintains the right to prove that it has fully or partially paid the obligation in accordance with the terms of the agreement (K.R.S. 371(2)).

The full text of these amendments can be found here: http://www.lrc.ky.gov/recorddocuments/bill/18RS/HB369/orig_bill.pdf

Kentucky Uniform Power of Attorney Act

Effective: July 13, 2018
Industry: Consumer Lending, Mortgage Lending, Mortgage Servicing
Source: Kentucky   KY House Bill 11 →
Tags: Kentucky, Power of Attorney
  • Adopts portions of the Uniform Power of Attorney Act of 2006
  • Applies to all powers of attorney except for certain exceptions
  • Provides that powers of attorney are durable and for their execution
  • Provides a choice-of-law rule for determining the law that governs the meaning and effect of the power of attorney
  • Outlines when a power of attorney becomes effective
  • Details when a power of attorney terminates

Many more provisions. Please read the entire rule.

Freddie Mac Bulletin 2018-10 Property Eligibility and Appraisal Requirements

Effective: July 16, 2018
Industry: Mortgage Lending
Source: Freddie Mac   Property Eligibility and Appraisal Requirements →
Tags: Underwriting, Property - Appraisal

Automated collateral evaluation

Effective for new submissions and resubmissions to Loan Product Advisor® on and after July 16, 2018

As part of our continued focus on leveraging big data and advanced analytics to bring greater efficiencies to the loan origination process, we are expanding eligibility for automated collateral evaluation (ACE) appraisal waivers to include Mortgages secured by Condominium Units. As a result, Mortgages secured by Condominium Units that qualify for ACE may receive relief from representation and warranties related to the property’s value, condition and marketability, providing Sellers with greater purchase certainty.

Additionally, we are updating the Guide to specifically state that to qualify for an ACE appraisal waiver, the Mortgage must receive a Loan Product Advisor® Risk Classification of Accept. 

Guide impact: Guide Section 5601.9

Comparable sales selection

We are updating our comparable sales selection requirements for properties located in new subdivisions, units in new Planned Unit Developments (PUDs) or units in recently converted or New Condominium Projects to provide flexibility when the new subdivision or project has no contract sales. The appraiser may now develop an appraisal report with all comparable sales from outside the new subdivision or project.

However, the appraiser must comment on the marketability of the new development or project and justify and support the use of the comparable sales from outside the new subdivision or project.

We are also clarifying that the appraiser may use comparable sales that are older than 12 months as long as the appraiser can justify and support such use in the appraisal report.

Guide impact: Section 5601.12

Consumer Protection Provisions

Effective: July 17, 2018
Industry: Consumer Lending, Mortgage Lending, Mortgage Servicing
Source: Nebraska   Alert →
Tags: Nebraska, Information Security/Data Breach

Nebraska modified its provisions relating to consumer protection under its Financial Data Protection and Consumer Notification of Data Security Breach Act of 2006 (“FDP”). The amendments 

  • prohibits consumer reporting agencies from charging a fee for "placing, temporarily lifting, or removing a security freeze" under the Credit Report Protection Act; 
  • expands the definition of “Substantially similar type of security product”; 
  • requires additional reasonable security procedures and practices regarding personal information; and
  • provides applicability for certain provisions; harmonizes provisions; and repeals the original sections.

Nebraska Release of Lien Amendments

Effective: July 17, 2018
Industry: Mortgage Servicing
Source: Nebraska   Nebraska LB750 →
Tags: Nebraska, Payoffs-Reconveyances
  • Within 60 days after receipt of full payment or performance under the secured obligation and after receipt of a written request by a trustor, mortgagor, or grantor, record or cause to be recorded a release of mortgage, or in the case of a trust deed, record or cause to be recorded a reconveyance.
  • Failure to comply is subject to the greater of five thousand dollars or actual damages caused by the failure, plus reasonable attorney's fees and costs. 

Georgia Department of Banking and Finance

Effective: July 17, 2018
Industry: Mortgage Lending, Mortgage Servicing
Source: —   Bankers Advisory Alert →
Tags: Georgia, BSA/AML, Loss Mitigation, Foreclosure, Servicing Transfers
  • Chapter 80-11-1-.06 requires that any person subject to the licensing requirements of the Georgia Residential Mortgage Act that meets the definition of a “loan or finance company” under the Currency and Foreign Transaction Reporting Act of 1970 must develop a written anti-money laundering program and comply with all filing, record keeping, currency transaction, and suspicious activity reporting as required by the Bank Secrecy Act.
  • Chapter 80-11-6 updates mortgage servicer standards relating to loss mitigation activity after a foreclosure process has commenced. Under the new rules a mortgage servicer shall not conduct a foreclosure sale before evaluating a borrower’s complete loss mitigation application if the application is received after a foreclosure process has been started and more than 37 days prior to the foreclosure sale. Additionally, if a servicer is not required to evaluate the loss mitigation application, then the servicer must notify the borrower that the application was not timely received. The updated rule also makes exempt the requirement for a loss mitigation appeal process if the loss mitigation application was received less than 90 days prior to a foreclosure sale.
  • Chapter 80-11-6 also updates provisions relating to notices of service transfers. Under the new rules the notice of service transfer requirement does not apply if, at the time of settlement, the servicer provides to the borrower written initial disclosures of the transferee that comply with the provisions of this chapter.

Arizona Breach of Security and Licensing Fees

Effective: July 20, 2018
Industry: Mortgage Lending
Source: Arizona   Bankers Advisory →
Tags: Arizona, Licensing, Information Security/Data Breach

Data Security Breaches

  • Iif a person becomes aware of a security incident involving computerized personal information he or she maintains he or she must conduct an investigation to determine if there was unauthorized access that materially compromises the data.  
  • If the investigation determines there was indeed a breach, then the person who owns the data must, within 45 days, notify those affected and if the breach affects more than one thousand individuals also notify the nationwide consumer reporting agencies and the Attorney General.  
  • Those who maintain the computerized personal information must notify the owners or licensee when they become aware of a breach.

Licensing Fees

Application forAmended feePrevious Fee
Banking Permit

 

$1,000$5,000
Organize and establish any other financial institutions for which an application or investigation fee is not otherwise provided by law

 

$1,000$2,500
Trust Company License

 

$1,000$5,000
Commercial mortgage banker, mortgage banker, escrow agent or consumer lender license

 

$1,000$1,500
Mortgage broker, commercial mortgage broker, sales finance company or debt management company license

 

$500$800
Approval to convert from a national bank or federal savings and loan charter to a state chartered institution

 

$1,000$5,000
Approval to convert from a federal credit union to a state chartered credit union

 

$500$1,000

Freddie Mac Bulletin 2018-6 Subsequent Transfers of Servicing

Effective: July 23, 2018
Industry: Mortgage Servicing
Source: Freddie Mac   Bulletin 2018-6 →
Tag: Servicing Transfers

In our continuing effort to create operational efficiencies, we are streamlining the processing of Subsequent Transfer of Servicing (STOS) requests by automating the STOS request and approval process and introducing an electronic Agreement for Subsequent Transfer of Servicing of Single-Family Mortgages (“STOS Agreement”). All other STOS requirements outlined in Guide Chapter 7101 remain unchanged.

On July 23, 2018, Freddie Mac will retire Guide Form 981 and Servicers will be required to initiate STOS requests electronically through the Service Loans application. Freddie Mac will process and approve eligible STOS transactions and the Transferor Servicer, Transferee Servicer and Freddie Mac will electronically sign the STOS Agreement through the Service Loans application.

Initiating an STOS request
To initiate an STOS request on and after July 23, 2018, the Transferor Servicer must log into the Service Loans application, choose the “Manage Portfolio” tab and select “Create a New STOS Request.” New requests must be submitted at least 45 and no more than 60 days prior to the Effective Date of Transfer.

When submitting a new STOS request, the Transferor Servicer must:

  •  Complete all fields and answer all questions designated to be completed by the Transferor Servicer
  •  Input the name of the Transferee Servicer and its e-mail contact information; and
  • Upload the proposed list of Mortgages related to the Transfer of Servicing (“Proposed Mortgage List”)

Once the Transferor Servicer successfully submits the STOS request, Freddie Mac will notify the Transferee Servicer of the pending STOS request by e-mail and provide a unique identifier for the request.

The Transferee Servicer must then log into the Service Loans application, choose the “Manage Portfolio” tab and select the STOS request with the applicable identifier. The Transferee Servicer must then complete all the fields designated to be completed by the Transferee Servicer.

Freddie Mac will provide the Transferor Servicer and the Transferee Servicer with certain reports reflecting additional data related to each Mortgage on the Proposed Mortgage List and will populate responses to certain questions from data in Freddie Mac systems. The questions answered by the Transferor Servicer and completed by Freddie Mac are substantially similar to the questions currently set forth in Part A of Form 981. Freddie Mac’s responses will be based on data previously reported by the Transferor Servicer or a prior Seller/Servicer.

Prior to executing the STOS Agreement electronically, the Transferor Servicer must validate the accuracy and completeness of:

  •  All data (regardless of who provided the data)
  •  Responses to all questions (regardless of who answered the questions), and
  •  The Proposed Mortgage List

As part of its due diligence and prior to electronically executing the STOS Agreement, the Transferee Servicer must review:

  •  All data
  •  Responses to all questions, and
  •  The content of the Proposed Mortgage List

The Transferor Servicer and Transferee Servicer must also comply with all other STOS requirements set forth in Chapter 7101.

Review and electronic execution of the STOS Agreement

As part of its submission of the new STOS request, the Transferor Servicer and Transferee Servicer must review a draft STOS Agreement that Freddie Mac will make available electronically for their signature. The Transferor Servicer and Transferee Servicer must electronically sign an STOS Agreement at least 45 days prior to the Effective Date of Transfer based on the Proposed Mortgage List in order to commence Freddie Mac’s review. Thereafter, the Transferor Servicer will have the capability to add or remove Mortgages from the Proposed Mortgage List up to eight days prior to the Effective Date of Transfer and, if changes are made, the Transferor Servicer must revalidate the responses to various questions to reflect the added/removed Mortgages. As part of its review, Freddie Mac also may require the Transferor Servicer to remove Mortgages from the Proposed Mortgage List.

If there are changes to the Proposed Mortgage List, the Transferor Servicer and Transferee Servicer must agree on the final list of Mortgages related to the STOS (“Final Mortgage List”) at least eight days prior to the Effective Date of Transfer and electronically execute a new STOS Agreement. The STOS Agreement replaces Form 981.

If there are no changes to the Proposed Mortgage List, such list becomes the Final Mortgage List and there is no need to electronically sign another STOS Agreement.

Freddie Mac’s approval of the STOS will be provided by letter, and the status of the request in the Service Loans application will be updated to reflect Freddie Mac’s approval of the STOS. No later than the first of the month following the Effective Date of Transfer, Freddie Mac will sign the STOS Agreement electronically acknowledging its approval of the STOS.

Servicers will be able to download from the Service Loans application a completed and fully executed electronic copy of the STOS Agreement in portable document format (PDF) and the Final Mortgage List in Microsoft Excel® format for storage in the Servicer’s records.

Moratorium on Subsequent Transfers of Servicing from July 9, 2018 through July 20, 2018

To facilitate the transition to this new process, we will implement a temporary moratorium on Subsequent Transfers of Servicing from July 9, 2018 through July 20, 2018. During this period, Servicers will not be able to submit new STOS requests or make modifications to existing requests. All STOS requests submitted prior to July 9, 2018 will be reviewed and, if applicable, approved no later than 2:00 p.m. Eastern time on July 20, 2018. Any Freddie Mac approved STOS requests with an Effective Date of Transfer of July 16, 2018 are
not impacted by this temporary moratorium. On and after July 23, 2018, subject to obtaining Freddie Mac’s prior written approval, Servicers must submit all new STOS requests and make modifications to existing requests electronically through the “Manage Portfolio” tab in the Service Loans application.

No changes to Concurrent Transfers of Servicing
Concurrent Transfers of Servicing are not affected by these changes. Servicers must continue to submit Form 960 to mail at Freddie Mac via e-TOS@freddiemac.com.

Glossary updates
In conjunction with the automation of the STOS request and approval process, we are adding the following defined terms to the Glossary:

  • Servicing Contract: The Servicing Contract is the unitary, indivisible master servicing contract comprising all the rights, duties, obligations, representations, warranties, covenants and agreements between a Servicer and Freddie Mac as set forth in the Purchase Documents
  • Servicing Contract Right: The Servicing Contract Right is the indivisible, conditional, non-delegable right and obligation of the Servicer to perform Servicing of the Mortgages for Freddie Mac in accordance with, subject to, and under the Servicing Contract

Additionally, we are modifying the definitions of the following Glossary terms: “Effective Date of Transfer,” “Subsequent Transfer of Servicing,” “Transfer of Servicing,” “Transferee Servicer” and “Transferor Servicer.”

STOS Agreement terms and conditions
Effective immediately

Based on Servicer feedback, we are updating terms and conditions on Form 981. The current terms could be inadvertently interpreted to require a Transferee Servicer to examine all Transfer Portfolio records. “Transfer Portfolio” is defined in Form 981.

We intended to convey that the Transferee Servicer will have been given the opportunity to examine all such Transfer Portfolio records no later than the Effective Date of Transfer and as of such date, the Transferee Servicer assumes full responsibility and liability for the correctness of such records.

The Transferee Servicer must conduct sufficient due diligence on the related Mortgage files and data being transferred to ensure that:

  •  The Servicer can service the loans correctly (in accordance with applicable law)
  •  The Servicer’s systems are accurate with respect to:

       - The related Borrowers (e.g., reflecting the payment history, the terms of the note and any modification or other alternative to                 foreclosure), and

       -  Its related investor reporting and remitting obligations under the Purchase Documents 

These updated terms and conditions also will be reflected in the electronic STOS Agreement in the Service Loans application on July 23, 2018.

Guide and Service Loans User Guide updates

Guide Sections 7101.1 through 7101.4, 7101.6, 7101.8 through 7101.11, 7101.13, 7101.15 and 8601.12, 9205.11, Forms 902, 902SA, 981 and 1034T, Directory 3 and Glossaries A-I and R-Z will be updated to reflect these changes related to the STOS process and revised STOS Agreement terms and conditions.

Additionally, the Service Loans User Guide will be updated by July 23, 2018 to reflect these changes.

Michigan Property Recording

Effective: July 25, 2018
Industry: Mortgage Lending, Mortgage Servicing
Source: Michigan   Michigan Senate Bill 737 →
Tags: Michigan, Loan Documents, Closing, Loss Mitigation, Foreclosure

Michigan Senate Bills 737 prescribes certain conditions relative to the execution of instruments entitled to be recorded in the office of the register of deeds.  Instruments presented for recording must comply with each of the following requirements:

(a) The name of each person purporting to execute the instrument is legibly printed, typewritten, or stamped beneath the original signature or mark of the person, and the signature or mark is in black or dark blue ink.

(b) A discrepancy does not exist between the name of each person as printed, typewritten, or stamped beneath his or her signature and the name as recited in the acknowledgment or jurat on the instrument.

(c) The name of any notary public whose signature appears on the instrument is legibly printed, typewritten, or stamped on the instrument and appears on the same page near the signature of the notary public.

(d) The address of each of the grantees in each deed of conveyance or assignment of real estate, including the street number address if located within territory where street number addresses are in common use, or, if not, the post office address, is legibly printed, typewritten, or stamped on the instrument.

(e) If the instrument is executed before April 1, 1997, each sheet of the instrument is all of the following:

(i) Typewritten or printed in type not smaller than 8-point size.

(ii) Not more than 8-1/2 by 14 inches.

(iii) Legible.

(iv) On paper of not less than 13 (17x22—500) pound weight.

(f) If the instrument is executed after April 1, 1997, each sheet of the instrument complies with all of the following requirements:

(i) Has a margin of unprinted space that is at least 2-1/2 inches at the top of the first page and at least 1/2 inch on all remaining sides of each page.

(ii) Subject to subsection (3), displays on the first line of print on the first page of the instrument a single statement identifying the recordable event that the instrument evidences.

(iii) Is electronically, mechanically, or hand printed in 10-point type or the equivalent of 10-point type.

(iv) Is legibly printed in black ink on white paper that is not less than 20-pound weight.

(v) Is not less than 8-1/2 inches wide and 11 inches long or more than 8-1/2 inches wide and 14 inches long.

(vi) Contains no attachment that is less than 8-1/2 inches wide and 11 inches long or more than 8-1/2 inches wide and 14 inches long.

(g) Unless state or federal law, rule, regulation, or court order or rule requires that all or more than 4 sequential digits of the social security number appear in the instrument, beginning on 1 of the following dates the first 5 digits of any social security number appearing in or on the instrument are obscured or removed:

(i) Except as provided in subparagraph (ii), September 12, 2007.

(ii) For an instrument presented to the register of deeds by the department of treasury, April 1, 2008.

(h) If the instrument or any part of it is in a language other than English, a written English translation is attached to the instrument.

(i) If the instrument is executed after January 1, 1964, the instrument contains the name and business address of the person who drafted the instrument.

(2) Subsection (1)(e) and (f) does not apply to instruments executed outside this state or to the filing or recording of a plat or other instrument, the size of which is regulated by law.

(3) A register of deeds shall not record an instrument executed after April 1, 1997, other than an instrument described in subsection (2), if the statement required under subsection (1)(f)(ii) purports to evidence more than 1 recordable event.

(4) Any instrument received and recorded by a register of deeds, including any instrument considered duly recorded under subsection (6), is conclusively presumed to comply with this act. The requirements contained in this act are cumulative to the requirements imposed by any other act relating to the recording of instruments.

(5) A register of deeds shall not reject an instrument for recording because of the content of the instrument if the instrument complies with the provisions of this act and any other act relating to the recording of instruments.

(6) If a mortgage meets all requirements for recording under this act and a copy of the mortgage is affixed to an affidavit that is recordable under section 1a(g) of 1915 PA 123, MCL 565.451a, the register of deeds shall receive the affidavit with the accompanying copy of the mortgage for record, and the mortgage is duly recorded under this act and under section 29 of 1846 RS 65, MCL 565.29, as of the date of recording of the affidavit. To the extent that the mortgage validly creates a lien, the lien is perfected as of the date of recording of the affidavit. The amendments to this section enacted by 2014 PA 347 apply retroactively to all copies of mortgages verified by affidavit regardless of whether they are recorded on, before, or after October 17, 2014, the effective date of 2014 PA 347. However, a register of deeds shall not receive an affidavit and mortgage for record under this subsection after October 16, 2014 if more than 1 mortgage is attached to the affidavit.

Enacting section 1. Section 1a of 1937 PA 103, MCL 565.201a, is repealed.

Enacting section 2. This amendatory act takes effect 90 days after the date it is enacted into law.

This act is ordered to take immediate effect.

Freddie Mac Selling update 2018-7 Freddie Mac Announces HomeOne Mortgage

Effective: July 29, 2018
Industry: Mortgage Lending
Source: Freddie Mac   Freddie Mac Selling update 2018-7 →
Tag: Underwriting

In support of our continuing efforts to provide access to Mortgage credit, we are introducing the HomeOne Mortgage, our newest low down payment option that will serve the needs of more First-Time Homebuyers. HomeOne Mortgages have loan-to-value (LTV), total LTV (TLTV) and/or Home Equity Line of Credit (HELOC) TLTV (HTLTV) ratios above 95%. This offering complements our Home Possible offering by providing a low down payment financing option for Borrowers without specific income or geographic restrictions.

HomeOne Mortgage

The requirements for the HomeOne Mortgage are in new Guide Chapter 4605 and include, but are not limited to,
the following:

  • At least one Borrower must be a First-Time Homebuyer when the Mortgage is a purchase transaction Mortgage
  • When all Borrowers are First-Time Homebuyers, at least one Borrower must participate in homeownership education. This requirement may be fulfilled with our free, online CreditSmart® program or another acceptable homeownership education program.
    • The maximum LTV/TLTV/HTLTV ratios are:
    • Maximum LTV ratio: 97%
    • Maximum TLTV ratio for Mortgages with secondary financing that are not Affordable Seconds®: 97% 
    • Maximum TLTV ratio for Mortgages with Affordable Seconds: 105% 
    • Maximum HTLTV ratio: 97%
  • The Mortgage must be: 
    • A Loan Product Advisor Mortgage with a Risk Class of Accept (Manually Underwritten Mortgages are not permitted)
    • A purchase transaction or “no cash-out” refinance Mortgage. For a “no cash-out” refinance Mortgage, the Mortgage being refinanced must be owned or securitized by Freddie Mac unless it has secondary financing that is an Affordable Second. To identify if Freddie Mac owns the Mortgage, the Borrower can look up the loan in Freddie Mac’s Loan Look-Up Tool or authorize the Seller to obtain this information on the Borrower’s behalf.
    • Secured by a 1-unit Primary Residence. Eligible property types include Condominium Units and units in Planned Unit Developments. Manufactured Homes are not permitted.
    • A fixed-rate Mortgage
  • If the Mortgage has an LTV ratio greater than 95%, it must have standard mortgage insurance coverage of 35%. Custom mortgage insurance is allowed.

Guide Section 6302.16(b)(ii) is being updated to include special delivery requirements for HomeOne Mortgages that are “no cash-out” refinance Mortgages. Sellers must enter the valid value of “FRE” for ULDD Data Point Related Loan Investor Type (Sort ID 222). If available, Sellers should also provide the associated Freddie Mac loan number of the Mortgage being refinanced for ULDD Data Point Related Investor Loan Identifier (Sort ID 221).

Review Guide Exhibit 19 to determine Credit Fees in Price applicable to the HomeOne Mortgage, including Mortgages with secondary financing. 

Loan Product Advisor, Loan Quality Advisor® and Loan Selling Advisor will be updated on July 29, 2018 to support the HomeOne Mortgage. There will be new Loan Product Advisor feedback messages which will be communicated at a future date.


Guide impacts: Chapter 4605 and Sections 4203.4, 4302.2, 4303.2, 4402.4, 4501.3, 4601.1, 4602.11, 4603.3, 4701.2, 5103.6, 5703.3 and 6302.16 and Exhibits 19 and 25

Freddie Mac Selling update 2018-7 Revisions to Home Possible Mortgage Income Limit Requirements

Effective: July 29, 2018
Industry: Mortgage Lending
Source: Freddie Mac   Freddie Mac Selling update 2018-7 →
Tags: Income, Underwriting

Freddie Mac remains committed to our mission of providing sustainable homeownership. In order to better focus Home Possible Mortgages on serving low- and moderate-income Borrowers, we are also revising the income limit requirements for Home Possible and Home Possible Advantage Mortgages.

We are updating the income limits for Home Possible Mortgages, including Home Possible Advantage Mortgages, to better focus these offerings on serving low- and moderate-income Borrowers. For all Home Possible Mortgages, with the exception of those secured by Mortgaged Premises located in a low-income census tract, the Borrower’s income, converted to an annual basis, must not exceed 100% of the AMI. 

There will continue to be no income limit for Mortgaged Premises located in low-income census tracts where the median income is at or below 80% AMI. With these revisions to the Guide, the Glossary term “Underserved Area” is no longer used in the Guide and will be deleted. 

Freddie Mac will continue to purchase Mortgages secured by properties located in designated high-cost areas, census tracts designated as disaster areas and minority census tracts; however, these Mortgages will now be subject to the maximum 100% AMI requirement.
Guide impacts: Section 4501.7 and Glossary R-Z

Loan Product Advisor enhancements for income changes

We are enhancing Loan Product Advisor, on July 29, 2018, to assess eligible Home Possible Mortgages against the previous and/or current year income limits, applying the better of the two years’ limits. Sellers will no longer need to retain the original Feedback Certificate when the Mortgage receives an Accept-Ineligible based on the Home Possible income limits. We will update the 2018 AMI limits concurrently with the updated income limits announced in this Bulletin.

As provided for in the table below, the better of the income limits will be based on:

  • 2017 – refers to the income limits in effect prior to July 29, 2018:
    • Home Possible and Home Possible Advantage income eligibility requirements which provide for higher income limits in designated high-cost areas, properties located in census tracts designated as disaster areas and high minority census tracts
    • The 2017 AMI limits
  • 2018 – refers to the revised Home Possible and Home Possible Advantage income eligibility

requirements announced with this Bulletin in effect on and after July 29, 2018, which include 2018 AMI limits and 100% AMI limits except for properties located in low-income census tracts 

Loan Product Advisor Determination of Income Limits When the Mortgage is submitted as a Home Possible Mortgage on and after July 29, 2018, and…

Then the following income limits are applied…

The last submission before July 29, 2018 was also a Home Possible Mortgage, and income limits were met

The better of income limits for 2017 or 2018

· The Mortgage is submitted for the first time

· The Key Number cannot be identified, or

· The last submission before July 29, 2018 was not submitted as Home Possible and/or did not meet the income eligibility limits

2018

 

The revised Home Possible Mortgage income limits and 2018 AMI limits will also be implemented in the Home Possible® Income & Property Eligibility tool on July 29, 2018. For Manually Underwritten Home Possible Mortgages, Sellers must apply the new income limits for Mortgages with Application Received Dates on or after July 29, 2018.

Freddie Mac Selling update 2018-7 Integrated Construction Conversion Documentation for Manufactured Homes

Effective: July 29, 2018
Industry: Mortgage Lending
Source: Freddie Mac   Freddie Mac Selling update 2018-7 →
Tag: Underwriting

Freddie Mac's Duty to Serve plan describes our focus on supporting underserved markets by financing more rural and manufactured housing and preserving affordable housing for homebuyers nationwide. Freddie Mac is working with the mortgage industry, community nonprofits, all levels of government and other dedicated organizations to make a positive difference for very low-, low- and moderate-income households in these three historically underserved markets. As part of our Duty to Serve plan, we are making changes to our Manufactured Homes requirements.

Currently, for a Construction Conversion Mortgage secured by a Manufactured Home, Sellers must conduct two loan closings, one for the construction financing and one for the Permanent Financing, and must use separate documentation for each type of financing. To streamline the loan processing, underwriting and settlement processes for Sellers, we are expanding our Construction Conversion Mortgage offering for Manufactured Homes to include Mortgages that use Integrated Documentation and a single-close process where permitted under applicable law.

Sellers will still be able to originate Construction Conversion Mortgages secured by Manufactured Homes using two loan closings and separate documentation if they so choose. Sellers will need to evaluate the most efficient process for their business and consider their respective State or county titling requirements.

We are updating the special delivery requirements to include Manufactured Homes.
Guide impacts: Sections 4602.3 and 6302.28