In a time when things are tough in our industry and economy and things are so hectic in our day-to-day lives, it is with special pride that a main concern of Mortgage Banking Systems (MBS) is the community and to assist others. We care about kids and soldiers and our communities. Just as lenders care about helping people purchase a new home, we too care about helping people enrich their lives. iPads for Soldiers in particular, holds a special place in Christine Kirby's (our president and CEO) heart. In fact, Christine has been one of the deliverers of iPads to injured soldiers, who have given so much to our country, allowing them to stay in touch with loved ones while recovering.

MBS is a proud supporter of health and fitness and recently sponsored a girl's baseball team, SYA 12U Xplosion, and the Lion's Roar 5k/1K Fun Run in Bethesda, MD. In the past, MBS has even sponsored our own employees walking the Susan G. Komen 3-Day, to erase breast cancer. We are sponsoring the upcoming 1-mile Kids Fun Run held August 25th in Orange, VA, a race focused on making exercise fun for kids. Our employees share in this compassion to help, regularly attending charity events, walking for animals, and giving up their time to coach a sport or hold a position on a charity planning committee. It is a priority at MBS to give back to others and to the community. We will happily continue this tradition for years to come.

Fannie Mae updates Illinois Security Instrument Instructions

Fannie Mae updated their instructions for the Illinois Mortgage (Form 3014). If the loan is a fixed rate mortgage loan, Lenders MAY add the interest rate. MBS-ProClose added the language ". . . at the rate of ____%" to print at the end of the second sentence of the definition (D) "Note" on Page 1 of our IL Mortgage (IL1CM1). The language will print at the end of definition (E) "Note" on the MERS version of our IL Mortgage (ILCMM1). The new change has no required effective date but can be used immediately.

Mississippi Recorded documents Updated

MERS and Fannie Mae authorized the addition of the MERS street address on the MERS version of the Mississippi Deed of Trust (MSCMM1). This helps meet the requirements of MS HB600 effective July 1, 2012, which amended MS Code § 89-5-24. Under MS HB600, the name, physical business mailing address and business or employment telephone number of the individual who prepared the document AND of every grantor, grantee, borrower, beneficiary, trustee or other party to the instrument must be on the first page of all recorded documents under the 3 inch top margin. This information has been added to our MS recorded documents. More space was added to the borrower section of all of our MS Deeds of Trust to print employment information for each borrower as appropriate.

New Virginia Recording Requirements

• 30-year fully amortizing fixed rate MyCommunityMortgage®
• Purchase or refinance by eligible borrowers (no first-time homebuyer requirement)
• Loan amount may not exceed current Fannie Mae standard loan limits; high cost areas do not apply
• Home must be primary residence
• Non-occupying co-borrowers not allowed
• Income limit is same as Keystone Home Loan Program
• Available in conjunction with the Keystone Advantage Assistance Loan program and/or Access Modification program
• Fannie Mae approved Community Seconds© also permitted
• Maximum 105% CLTV
• Homebuyer education class or counseling session required prior to closing
• Borrower must sign the Borrower's Authorization for Post Purchase Counseling (Form 68) prior to or at closing

Investors continued to make announcements about the FHA MIP changes (see previous ProClose March-April newsletter) and policies about FHA Streamlines. Several Investors are no longer purchasing FHA Streamline Refinance mortgages they are not currently servicing. Investors also released their own procedures to follow regarding adverse action notices. Please see individual investor notices for more information.

Franklin American

A new FHA 5/1 ARM (1/1/5 caps) program is now available under the Franklin American loan programs as of locks on or after May 3, 1012. This includes purchase, rate/term refinance, streamline, cash-out refinance and energy efficient mortgage loans. A new Franklin American FHA 5/1 ARM Disclosure (MBS form ID AAFEF1) is currently being added to our forms library.

GMAC Bank

GMAC Bank recently announced a major scaling back of its government (FHA, VA and USDA) loan production. As of close of business on April 16th all government loans had to be locked or assigned, with no relocks available, and only a 30-day maximum extension on existing locks. This move affected both correspondent lenders and wholesale brokers, though the bank is continuing to offer these products through its direct retail channel.

In a move related to the notification of adverse action required per Regulation B, GMAC is now issuing Adverse Action Notices directly to the applicant(s) for all loans (correspondent and wholesale) submitted for underwriting and subsequently denied. This policy became effective for all new loans submitted for underwriting on or after June 1st. GMAC advised that brokers and correspondents should not issue Adverse Action Notices, though their name and phone number will appear as the main contact for the applicant in the Notices sent by GMAC.

SunTrust Mortgage, Inc.

Bulletin COR12-061 announced SunTrust Mortgage eliminated the Freddie Mac Alt 97 program effective on new loan applications, locks and relocks May 14, 2012. Their Buyer's Bonus program was also discontinued as of May 11, 2012. The Buyer's Bonus Mortgage Program Agreement (Form COR 0012) is being removed.

Wells Fargo Funding

In Newsflash C12-030, Wells Fargo Funding announced all loans must include a completed Loan Submission Summary (LSS) Form 1 in every closed loan package. The current LSS form has been split into two separate forms, making page 2 a new form on its own titled The Document Checklist Form 2. Both forms are being updated in our forms library for release later this month. The new LSS will be posted by the effective July 16, 2012 date. Loans without the new LSS form will be suspended on and after the effective date.

Why is my LTV of .78 not cutting off until 120 months instead of after the 106th payment?

Answer
The LTV cutoff was entered as ".78" instead of "78"; remove the decimal from the data entered.