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| NEW PROCLOSE WEB SITE |
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Visit our fresh new ProClose web site and see the latest on Platinum and Industry News and Events!
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- SaaS
- MBS-Attending NEMBC
- Investor Updates
- Compliance
- Question of the Month
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 | | ProClose Platinum - Software as a Service (SaaS) |
|  | In the new world of Web 2.0, where interaction with LIVE data is key, Software as a Service (SaaS) is becoming the prominent software model. The 100% internet-based software permits access to software products (as applications) over the Internet, allowing users to connect from any location. Really, SaaS is a web-connect, connecting data to data, business to business, even people to people.
With the current economy, SaaS becomes extremely attractive. Applying new applications is lower in risk than ever before, with lower initial costs and support time. These savings apply both to the business and its clients. With a SaaS platform, the need to install additional software on a client's own computer can be eliminated. Clients have less internal software maintenance, less need of tech support of their own and receive real-time immediate updates. (In ProClose Platinum this includes compliance, form and software changes!)
The successful SaaS software is not complex or extremely customized (unlike our very customizable Classic software), but SaaS allows many options for growth. That's why we designed ProClose Platinum with a Service-Oriented Architecture (SOA) having lender-business functionality in a SaaS model. It's not a single closing system, but created as a web-based collaborative closing software, which will provide web-apps to other web-based software to meet our clients' business needs. Already, ComplianceEase is being added as an available application to ProClose Platinum. It is a strictly web-based relationship with data dynamically interacting and communicating with one another. There is absolutely NO installation of anything needed on the client's side and it's available from anywhere!
In an e-mortgage future, it makes sense to use a Software as a Service model closing software like ProClose Platinum. Make a smart choice for the future of your business - use ProClose Platinum.
Talk to us about this article and what applications you would like to see with your closing software at sales@proclose.com. |
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| | |  | Lori Mills, SVP of Secondary Marketing and Compliance and Debby Ballard, Investor Program Analyst and Client Representative will both be attending the New England Mortgage Banking Conference. Held in Newport, RI on September 23-25, 2008, the NEMBC promises to be a great event for networking and keeping up with industry changes. Sessions will focus on RESPA, Detecting Mortgage Fraud, a State Regulators Panel, workshops and HUD/FHA, among many other topics. The list of speakers and exhibitors is distinguished, including Franklin American, Flagstar, CitiMortgage, Taylor Bean & Whitaker, Continuity Programs, Inc., HUD, FNMA/FHLMC and Thornburg. Call MBS at 800-783-2283 and ask for Debby Ballard or Lori Mills to schedule a meeting during the conference. Learn more now! |
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| | |  | BB&T
Effective July 21, 2008, BB&T introduced their new FHA 3-Year ARM (217) and FHA 5-Year ARM (218) products. MBS-ProClose has added these products to our library and created their corresponding new ARM disclosures.
The margin for all FHA and VA ARM products offered by BB&T Correspondent Lending will be reduced from 2.75% to 2.00%. Loans already in the pipeline that are locked prior to August 1, 2008 will need to retain the 2.75% margin.
CitiMortgage
In response to the 2008 Economic Stimulus package, CitiMortgage is introducing new Jumbo ARM programs, including a 7/1and 10/1 Full Amortization ARM along with a 10-year Interest-Only option for each. CitiMortgage already incorporated the new loan limits for high cost areas to their Fixed Rate, Fixed Rate Interest-Only, 5/1 LIBOR ARM and 5/1 10-year Interest-Only LIBOR ARM Stimulus programs.
Effective August 23, 2008, CitiMortgage is discontinuing all Interest-Only programs where the Interest-Only term is the same as the fixed period term. Loans for discontinued products must be registered by August 22 and purchased by October 31, 2008. Interest-Only programs with a 10-year Interest-Only term will remain in the CitiMortgage product library.
Countrywide
Countrywide has revised several forms in the last 2 months. Forms changed include three Mortgage Insurance Disclosures, some of their Texas Home Equity forms, a Delaware Inter Vivos Trust document, and their Loan Purchase Voucher. All have been updated by the MBS forms department. Just announced August 18, 2008 are updates to their Name & Signature Affidavit, Michigan Consumer Caution and Home Ownership Counseling Notice and the AK version of their Fixed Interest-Only Note. Those are currently being worked on and will be released early September.
A 15-year loan term has been added to Countrywide's Agency Jumbo Fixed program; the 40-year term for this program was eliminated. A 5/1 Interest-Only fixed period ARM was also added to Countrywide's Agency Jumbo offerings.
Flagstar Bank
Effectively immediately, the 75/25 Program (5323) is suspended. Correspondent loans must be delivered and purchased by Friday, August 15, 2008.
Effective Monday, July 7, 2008, LPMI was discontinued for MyCommunityMortgage ( 5325) and Home Possible (5335) products. All correspondent loans must be locked prior to July 7, 2008, and be closed and delivered by August 7, 2008. Further LPMI suspensions were announced on July 24, 2008. Fannie Mae HomeStyle Renovation (5719) and Fannie Mae Cooperative Property (5917) loans with LPMI must have been locked no later than July 29, 2008. All correspondent loans with LPMI on programs 5719 and 5917 must be closed and delivered by August 29, 2008.
Flagstar released an announcement to help prevent errors and omissions regarding the signing date of documents. They ask their correspondents to please remember the following guidelines: FHA/VA closing documents must be signed and/or notarized on or before the date of the documents. If the docs are signed and/or notarized after the date of the documents, it will result in an errors & omissions fee on the loan. Closing documents for conventional loans must be signed on or after the date of the documents. If the docs are signed and/or notarized before the date of the documents, it will result in an errors & omissions fee on the loan.
GMAC Bank
GMAC Bank has updated its Fair Lending policy on "high cost" loans. For all loans closed on or after August 1, 2008, GMAC Bank will not originate, purchase or table fund loans that exceed either the APR of fee thresholds or have certain other features that make them "high cost" under the federal HOEPA or similar state laws. Included in this change, (even though not included under HOEPA), are open end lines of credit secured by a dwelling and all purchase money loans, including loans secured by second homes or investment property.
Effective August 1, 2008, GMAC Bank has discontinued all of their Home Equity Closed End and Line of Credit Products. Discontinued programs codes include TY33, T510, WLTB, WL25 and WL30.
Indymac Bank
Indymac officially announced in July that they were exiting most facets of the Mortgage Business. This includes ceasing the production of new mortgages, and exiting the third-party lending business altogether. On July 11, 2008, it was announced that the Fed would be taking over Indymac Bank; however, Indymac's reverse mortgage lending division Financial Freedom is still funding loans.
SunTrust
On July 30, 2008, SunTrust announced that effective immediately Table Funding has been eliminated for loans secured by Second Home and Investment Properties. SunTrust will continue to allow table funding by approved Correspondent lenders for loans secured by primary residence properties only.
SunTrust made the decision that they would no longer offer home equity products through the wholesale line of business. Like most other lenders in this current climate they have "determined that going forward, equity lending through this channel does not meet strategic objectives. Therefore, effective July 25, 2008, the Flex Equity Line loan program, as well as any other equity product offered by the Broker business line (including the Wholesale Lending Center), will no longer be eligible through the Wholesale Line of Business at SunTrust Mortgage. All applications (i.e., SunTrust credit packages received) on or before July 24, 2008 will be honored; however, must be closed and funded on or before August 29, 2008."
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| | |  | New Pennsylvania Property Insurance Bill
Pennsylvania Governor Edward Rendell signed H.B. 2428 on July 4th. H.B. 2428 is a property insurance bill, and is effective immediately. The bill states that lenders cannot require borrowers to obtain property insurance coverage exceeding the replacement value of the buildings on the land securing a loan as a requirement of giving that loan. Also, the bill does not allow lenders to require that borrowers insure the value of their property's land.
New York Bill in Response to Foreclosures
On August 5 th, New York Governor David A. Paterson signed Bill 8413-A, a measure designed to help assist people facing foreclosure, and help prevent any future housing crisis. The primary focus of the bill is helping homeowners who are facing foreclosure. It requires lenders to issue a pre-foreclosure notice to borrowers at least 90 days before foreclosure, which includes a list of government-approved housing counselors in the borrower's area. It also establishes a mandatory settlement conference for foreclosures on certain subprime loans; the court may appoint an attorney to homeowners who cannot afford one, with certain conditions. In the past, there have been some questionable foreclosure practices in cases where ownership of the mortgage and the note is uncertain. To prevent this, the bill requires any plaintiffs in an action against a homeowner to make an affirmative allegation that they have standing authority to bring the foreclosure action, and that they have complied with applicable laws. Finally, the bill addresses foreclosure rescue scams; it prohibits upfront fees and requires written contracts from any distressed property consultants.
To prevent a future mortgage crisis, the bill establishes strong consumer protections for subprime loans and minimum underwriting standards. It establishes a standard for determining the borrower's ability to pay, requiring lenders to take into consideration the principal, interest, taxes, insurance, assessments, points and fees. The bill also requires brokers to present the most appropriate loans for the borrower to the borrower. It requires mortgage servicers servicing loans on residential property in New York to register with the Banking Department. Finally, it states that mortgage fraud would be classified as a crime under Penal Law; this makes it easier for prosecutors to pursue cases.
ComplianceEase has made the necessary changes in response to this law, which will be included as part of their August 17th, 2008 Production release; the update will cover all of the review needed in order to be in compliance with this law. This update is applicable for appropriate adjustable rate mortgages closed on or after September 1st.
Federal Reserve Does Not Change Interest Rate
On August 5th, the Federal Reserve left the short-term interest rate unchanged. This is their second consecutive time meeting without changing the rate, after a seven-month period of lowering it. In their statement, the Federal Reserve cited both the current slowing economy and potential inflation as their reasons for not changing the rate. Economists are predicting that the rate will stay the same until at least after the election; some are even saying that it might rise. Those economists say that the Federal Reserve is more concerned about preventing inflation than about boosting the economy with a change in rate. Stocks rallied after the announcement, with investors reassured by the comments in the Federal Reserve's statements.
Final Version of HOEPA Rules
The Board of Governors of the Federal Reserve adopted the final version of the HOEPA Rule on July 14th, 2008. This rule amends the Truth in Lending Rules of Regulation Z. It creates a new category of closed-end predatory lending loans called higher-priced loans, with special restrictions on these loans. For higher priced loans, creditors will be prohibited from extending a mortgage or loan without considering borrower's ability to repay, which includes verifying the borrower's income and/or assets using reasonable third party documentation. Prepayment penalties are restricted when the payments can change in the first four years, or if the loan is being refinanced, and no prepayment penalty can last for longer than the first two years. Finally, on higher-priced loans creditors must establish escrow accounts for taxes and insurance; borrowers will be given the option to opt out of escrows 12 months after the start of the loan. Creditors will be prohibited from restructuring closed-end loans as open-end lines of credit to evade these rules.
There are additional restrictions on closed-end loans secured by a consumer's principal dwelling. Creditors are not allowed to pay a mortgage broker more money than what had already been agreed to by the borrower. Creditors and mortgage brokers are prohibited from coercing an appraiser to provide an inaccurate appraisal in connection with a mortgage loan. Finally, it includes legislation to protect the borrower from unnecessary fees; servicers are prohibited from "pyramiding" late fees, failing to credit payments as of the date received where not crediting the payment would cause the borrower to incur a late fee. They are also prohibited from not providing loan payoff statements within a reasonable time or failing to deliver a fee schedule on request.
There are also proposed rules for mortgage advertising, largely dealing with the issue of misrepresentation of rates or terms. These rules promote advertisements including a clear and accurate disclosure of the information about the offered mortgage loan.
Finally, creditors will be required to provide transaction-specific mortgage loan disclosures for all home-secured closed-end loans no later than three days after they have been requested. The disclosure must also be provided before the consumer pays any fee, with the exception of a reasonable credit history review fee. The Board will also be reviewing these disclosures in order to update them so that they can better reflect the increased complexity of mortgage products.
These rules will be effective October 1st, 2009. The escrow requirements will be effective April 1st, 2010, except for the requirements for manufactured homes, which will be effective October 1st, 2010.
HERA Signed by President Bush
President Bush signed the Housing Economic Recovery Act into law on July 30th. This law is meant to be a sweeping reform in response to the current housing crisis. Although it initially faced opposition from the White House, after financial difficulties for Fannie Mae and Freddie Mac it was pushed through Congress and given complete support by the President. The bill creates a new regulator for Fannie Mae and Freddie Mac called the Federal Housing Finance Agency. This regulator replaces the Office of Federal Housing Enterprise Oversight, and will be managed by the OFHEO director James Lockhart. It includes provisions allowing the Treasury to assist Fannie Mae or Freddie Mac in times of need, allowing it to extend them credit and to buy stock in them. It provides $4 billion to local governments to purchase foreclosed homes and turn them into low and moderate income housing, and an extra $180 billion for foreclosure counseling. It sets new minimum standards for broker and retail bank loan officers. It includes reforms for FHA and VA loans, including raising their loan limits to match the permanent limits set for Fannie and Freddie, and a ban on seller-funded down payment assistance programs. It also provides tax credits for first-time homebuyers.
Finally, it provides $300 billion to FHA to allow it to refinance troubled mortgages where lenders are willing to write down the debt to ninety percent of its current appraised value. HUD has come out saying that they will be ready with the necessary underwriting criteria to support FHA's efforts by the October 1st effective date included in the law. House Financial Services Committee Chairman Barney Frank has called on servicers to place a voluntary moratorium on foreclosures until these provisions take effect, so that no borrower will be foreclosed on when they could have refinanced under these new terms. |
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| | |  | Why does FHA Monthly MIP not match Amount Calculated in the LOS?
Answer
Per HUD Mortgagee Letter ML 98-22, all lenders must calculate monthly mortgage insurance premiums based on HUD's calculations. ML discusses computation of the annual average outstanding balance to be used in these calcs. ProClose performs the calculation exactly as HUD specifies, which may result in a slightly lower monthly MIP than that calculated by the LOS (often calculated off the initial base loan amount, and not an average of the balance). User will need to consult with the LOS about any adjustments necessary to their calculation to match the HUD required calcs. |
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