2007 has barely started and already the MBS Investor Relations team has been busy adding support for a variety of new loan plans, many of which have the popular Option ARM features.  January/February new program additions include the new Aurora Loan Saving's Choice Advantage 5/6 and 5/1 Hybrid LIBOR ARMs, Impac Funding Corporation's new 40/30 Balloon Features on Traditional Option ARM loans, as well as AHM's 5+5 MTA Option ARM.

Of the Non-Option ARM variety, ProClose also recently added 2 new CitiMortgage Fixed Rate Interest-Only Home Equity Loans (FRIOL). One, the 5/20, is interest only for 5 years; while, the 10/20 is interest only for 10 years.  Both loans then have fully amortizing principal & interest payments over the remaining 20-year term.  We're also finalizing documents for New Century's new 50/30 Balloon plans, which will be available for fixed loans, and 2/6 and 3/6 LIBOR ARMs.

As always, Client Services is on hand to add any new programs to your individual ProClose set-up.  We look forward to hearing from you as you enhance your program options for the New Year! For more information on new programs, please talk to a Client Service Representative at 1800 783 2283.

INVESTOR NOTE:

Program Trend:  Option ARMs continue to be the program on everyone's list today.  Who offers them, what documents do they require and what complications might they bring?  Some are so intricate they require changes to the way doc prep companies do their calculations, and extensive testing of the amortization schedule and TIL.  MBS-ProClose is addressing this on a case-by-case basis. 

ProClose already offers basic Option ARM programs for investors such as Countrywide, Flagstar, IndyMac and RFC.  EMC has a more complex program that MBS released last year and we add more and more AHM programs all the time. As we go forward deciding to pursue other programs, we consider some of the following issues: Is the program still in a trial period?  Are the Investors approving doc prep companies or are they waiting to see if a program takes off?  What development changes need to be made to calculations and system files?  Is this a program that will really be used by clients?  Some clients may shy away from these due to the risk of Option ARM programs attracting high-risk borrowers.  NovaStar describes their MTA program as best for the savvy borrower.

As you consider adding Option Arms to your list of programs, let us know.  We appreciate your input and feedback as we explore adding more challenging Indymac, RFC and Countrywide PayOption ARMS, among others. For more information, please contact investorrelations@ProClose.com.

MBS-ProClose Forms Production department achieved a remarkable increase in the number of forms produced in 2006 with the supervision of Dorothy Woolfolk. Let's hear from Mrs. Woolfolk herself, talking about how she and her department achieved this milestone:

ProClose Marketing: Mrs, Woolfolk, what can you say you did differently in 2006 that helped you achieve this remarkable increase? 

Mrs. Dorothy Woolfolk: I'm going to say "Team work and the right people." I work with wonderful people who are dedicated to bringing our clients the latest form sets. Working closely with the Investor Relations department enables us to act very rapidly when it comes to producing new form sets.

In 2007, we will continue to go through a series of trainings that will allow us to have the current documentation in sync with the most recent technology. All the word-processing manuals will be updated with the most accurate (X3) information so that the word processors' can simply and rapidly maneuver around the new software.  

ProClose Marketing: What are some of your departmental goals moving forward? How will forms department contribute to the overall success of MBS-ProClose?

Mrs. Dorothy Woolfolk:  Forms Creation department plays a very important role in the overall success of MBS-ProClose. Our ambitious target for 2007 is to increase the yearly document count by 10% while using the X3 technology to the fullest to help achieve target numbers successfully. 

ProClose Marketing: What can you tell us about biggest form projects tackled in 2006?

Mrs. Dorothy Woolfolk:  2006 was a great year for the document creation team.  We have continuously increased our forms library while maintaining the integrity of our documents.  From processing forms (over 300) to FHA MERS updates (51 total), new Fannie Mae and Freddie Mac Notes and Riders (over 150), 2006 was a very productive year for forms production.

ProClose Marketing: What kind of changes, etc should our clients expect from you in 2007? How do you see Forms Dep. play a role in MBS-ProClose Client satisfaction? 

Mrs. Dorothy Woolfolk: 2007 is looking to be an exciting year as well.  With new software (X3) we will be able to process documents faster than ever before.  Converting documents from PDF not only saves time and keystrokes but it allows all text to be transferred over virtually eliminating the need to re-type the document only leaving formatting to be done.  This will allow for increased productivity and speed and allows for the continuous increase to our forms library.

In January 2007, the Rhode Island Home Loan Protection Act and the Tennessee Home Loan Protection Act were enacted to prevent lenders from engaging in predatory lending practices.  Rhode Island and Tennessee join over thirty other states with current legislation addressing predatory lending.

The Rhode Island Home Loan Protection Act and the Tennessee Home Loan Protection Act intend to:  eliminate incentives for lenders to make predatory loans; encourage a fair and competitive market that provides credit to all consumers; develop a rate and fee threshold for "high cost home loans" with loans above the threshold receiving additional protections against predatory lending practices; protect borrowers against mortgage "flipping"; provide easy access to counseling and education for borrowers of these "high cost home loans"; and provide notice to a borrower that they are obtaining a high-cost mortgage loan. 

It is only a matter of time before every state adopts some type of anti-predatory lending legislation which resembles the Rhode Island Home Loan Protection Act and Tennessee Home Loan Protection Act.  Lenders must be aware of anti-predatory lending laws because they will provide additional limits on loan rates and fees and require additional disclosures of APR and loan information.  As long as lenders maintain their awareness of anti-predatory legislation, they will be able to satisfy the new loan requirements and disclosures. 

In response to the Rhode Island and Tennessee anti-predatory lending laws, the MBS-ProClose Compliance Department researched and identified all necessary forms changes.  Once the forms changes were identified, MBS-ProClose released the updated Rhode Island and Tennessee forms to ProClose users.  These updated forms are currently available to ProClose users.  For more information, please contact compliance@ProClose.com.