Compliance Calendar

• Limits interest rates finance lenders may charge on loans of $2,500 to $10,000 to 36 percent plus the Federal Funds Rate
• Requires finance lenders making loans subject to these provisions to report each borrower’s payment performance to at least one consumer reporting agency that compiles and maintains files on consumers on a nationwide basis and to offer, at no cost to borrowers, a credit education program or seminar that has been reviewed and approved by the DBO Commissioner, in accordance with specific requirements
• Licensees may contract for and receive an administrative fee
• Under the California Financing Law (CFL), certain principles apply in determining whether a loan is of a bona fide principal amount under specified provisions and whether the regulatory ceiling provision is used for purposes of evading the CFL
• The new law applies these principles to loans of bona fide principal amounts of $2,500 or more but less than $10,000 and to any fees paid to a licensee for the privilege of participating in an open-end credit program
• The new law has several other provisions that CFL-licensed lenders should review

Transfers of custody and Subsequent Transfers of Servicing

To facilitate Transfers of Servicing, we are updating Section 7101.9 to delete this requirement. In addition, we are adding the following requirements for all transfers of custody (which may result from Subsequent Transfers of Servicing):

• Transferee Servicers must notify Transferee Document Custodians in advance of the Effective Date of Transfer that the transfer of custody is going to occur
• Transferee Document Custodians must notify the Transferor Document Custodian that the shipment of Notes is complete within 35 days of the Effective Date of Transfer or custody transfer date

Charge Offs

We are updating Section 9210.5 to reduce potential delays associated with settling charge-offs via Workout Prospector. When submitting all required data for settling a charge-off via Workout Prospector, the Servicer must submit it within 30 days of receiving Freddie Mac’s approval letter.

Freddie Mac Access to Mortgage Records

We are revising Section 8101.7 to state that the section authorizes Freddie Mac to execute, acknowledge and deliver such instruments and documents on the Servicer’s behalf and take other actions on behalf of the Servicer to effectuate the purposes of the section.

HELOC Threshold Extension

• For open-end lines of credit, the rule extends for another two years, until January 1, 2022, the current temporary coverage threshold of 500 open-end lines of credit. 
• For data collection years 2020 and 2021, financial institutions that originated fewer than 500 open-end lines of credit in either of the two preceding calendar years will not need to collect and report data with respect to open-end lines of credit.

Partial exemptions under the EGRRCPA

• Incorporates into Regulation C the clarifications from the Bureau’s August 2018 interpretive and procedural rule. 
• Further effectuates the burden relief for smaller lenders provided by the EGRRCPA by addressing certain issues relating to the partial exemptions that the August 2018 rule did not address.

• § 34.81 Definitions: minor revisions 
• § 34.82 Holding Period: specifies how long a national bank or a Federal saving association may hold OREO, provides the starting date for that holding period, and addresses additional related provisions affecting the holding period
• § 34.83 Disposition of OREO: specifies methods for national banks and Federal savings associations to dispose of OREO
• § 34.85 Appraisal Requirements: specifies the appraisal requirements applicable to OREO
• § 34.86 OREO Expenditures and Notification: contains provisions related to permissible expenditures on OREO
• Rescinds existing 12 CFR 34.87, which requires national banks to account for OREO consistent with the instructions for the Call Report, because it is now redundant to statutory requirements
• Removes Appendices A and B to 12 CFR part 3 (risk-based capital guidelines for national banks) and 12 CFR part 167 (capital requirements for Federal savings associations)
• Makes conforming technical edits to other parts of the rule that include OREO provisions and/or refer to the rescinded or removed content

All Defect Taxonomy changes will be effective for loan reviews as of January 1, 2020.  Defect taxonomy is defined for the following:

Underwriting Loan Review

• Borrower Income (BI) 
• Borrower Credit (BC)
• Loan to Value & Maximum Mortgage Amount (LM)
• Borrower Assets (BA) 
• Property Eligibility (PE) 
• Property Appraisal (PA) 
• Borrower Eligibility (BE)
• Mortgage Eligibility (ME)
• Lender Operations (LO) 

• Amended to increase the exemption threshold from $26,700 to $27,200, effective January 1, 2020

• Amended to increase the exemption threshold from $57,200 to $58,300 effective January 1, 2020

• Amended to increase the exemption threshold for consumer credit transactions from $57,200 to $58,300 effective January 1, 2020

• Effective January 1, 2020, the declared rate is 5.5% for determining whether a loan is a high-rate/high-point loan under Vermont law

• The Department of Banking and Securities published a new base figure under the Loan Interest and Protection Law of $260,404 effective January 1, 2020, for the calendar year 2020.

• Any file submitted via GUS that is issued Form RD 3555-18E, “Conditional Commitment for Single Family Housing Loan Guarantee,” on or after January 1, 2020, will require lenders to remit a one-time $25 Technology Fee with their loan closing package (i.e. the same time a lender currently remits the Upfront Guarantee Fee).

Freddie Mac is removing the requirement that the Servicer receive prior written approval for reimbursement of pre-foreclosure mediation attorney fees and additional hearings and court costs amounts for mediations where pre-foreclosure is required by State or local law and is adding expense limits for these fees and costs to Exhibit 57A, Approved Attorney Fees and Title Expenses.

Update also establishes maximum reimbursement limits for the following existing expense codes and removing the requirement that Servicers must submit the written request for pre-approval (RPA) in the Reimbursement System.

2019-09 See alert here for details of five amendments passed

• CA A.B. 25 (2019)
• CA A.B. 874 (2019)
• CA A.B. 1146 (2019)
• CA A.B. 1355 (2019)
• CA A.B. 1564 (2019)

2010-10 See alert here for details of the proposed attorney general regulations

Consumer Rights

The legislation provides for the following consumer rights:

• A consumer (defined as a California resident) has the right to request that a business (defined below) that collects a consumer's personal information (defined below) disclose to that consumer the categories and specific pieces of personal information that the business has collected.

• A business that collects a consumer's personal information shall, at or before the point of collection, inform consumers as to the categories of personal information to be collected and the purposes for which the categories of personal information shall be used. A business is forbidden from collecting additional categories of personal information or using personal information collected for additional purposes without providing notice to the consumer.

• A consumer has the right to request that a business delete any personal information about the consumer that the business has collected.

• A consumer has the right to request that a business that collects personal information about the consumer disclose: (a) the categories of personal information it has collected about that consumer, (b) the categories of sources from which the personal information is collected, (c) the business or commercial purpose for collecting or selling personal information, (d) the categories of third parties with whom the business shares personal information, and (e) the specific pieces of personal information it has collected about that consumer.

• A consumer has the right to request that a business that sells the consumer's personal information, or that discloses it for a business purpose, disclose: (a) the categories of personal information that the business collected about the consumer, (b) the categories of personal information that the business sold about the consumer and the categories of third parties to whom the personal information was sold, by category or categories of personal information for each third party to whom the personal information was sold, and (c) the categories of personal information that the business disclosed about the consumer for a business purpose.

• A consumer has the right, at any time, to direct a business that sells personal information about the consumer to third parties not to sell the consumer's personal information.

• A business cannot sell the personal information of consumers if the business has actual knowledge that the consumer is younger than 16 years old, unless the consumer—in the case of consumers who are between 13 and 16—or the consumer's parent or guardian, in the case of consumers who are younger than 13, has affirmatively authorized the sale of the consumer's personal information.

To comply with these requirements, businesses are required to make available two or more methods for submitting consumer verified requests and the information must be provided to the consumer within 45 days of the verified request.

Online Privacy Notice Requirements

The law requires entities to list specific information in their online privacy policies, including:

• a description of the consumers' rights as discussed above;

• a list of the categories of personal information that the business has collected about consumers in the preceding 12 months;

• a list of the categories of personal information it has sold about consumers in the preceding 12 months; and

• a list of the categories of personal information it has disclosed about consumers for a business purpose in the preceding 12 months.

If applicable, a business also must provide a clear and conspicuous link on the business' homepage titled “Do Not Sell My Personal Information,” which should lead to a web page enabling a consumer—or a person authorized by the consumer—to opt out of the sale of the consumer's personal information. That information also should be provided in the business' online privacy policy.

Enforcement

The law creates a complicated enforcement mechanism for private litigants and the California Attorney General's office.

[See alert for complete details]

The effective date for the final rule is January 1, 2020, and the compliance date is January 1, 2021.

The final rule amends the definition of trading account, adopts new exclusions from the definition of proprietary trading, streamlines existing exclusions and exemptions, and tailors compliance program obligations for banking entities. Specifically, the final rule

• revises the definition of “trading account” by (a) eliminating the presumption that the purchase (or sale) of a financial instrument held for 60 days or fewer is within the short-term intent prong of the trading account, (b) establishing a presumption that the purchase (or sale) of a financial instrument held for 60 days or more is not within the short-term intent prong of the trading account, (c) providing that firms that are subject to the market risk rule prong are not subject to the short-term intent prong, and (d) allowing firms to opt into the market risk rule prong.
• revises the definition of “trading desk” by adopting a multi-factor definition based on the same criteria typically used to establish trading desks for other operational, management, and compliance purposes.
• revises the exclusion from the definition of proprietary trading for liquidity management and adopts new exclusions for (a) error trades and error-correcting trades, (b) customer-driven matched swap transactions, (c) mortgage servicing assets and mortgage servicing rights hedging activities, and (d) purchasing or selling financial instruments that would not be accounted for as trading assets or liabilities on applicable reporting forms.
• streamlines the proprietary trading and covered fund exemptions for underwriting and market-making related activities, risk-mitigating hedging activities, and activities conducted solely outside the United States.
• tailors compliance program obligations based on trading assets and liabilities and generally streamlines the compliance program obligations. The final rule eliminates the 2013 rule’s CEO attestation requirement for all banking entities except for banking entities with significant trading assets and liabilities. Banking entities without significant trading assets and liabilities will no longer be required to submit annual CEO attestations as of January 1, 2020.
• revises the metrics reporting obligation requirements to (a) apply only to banking entities that have significant trading assets and liabilities and (b) require metrics reporting on a quarterly schedule. The metrics amendments eliminate the following metrics: Inventory Aging, Stress Value-at-Risk, and Risk Factor Sensitivities. The amendments replace the Customer-Facing Trade Ratio metric with the new Transaction Volumes metric and replace the Inventory Turnover metric with the new Positions metric. In addition, the amendments require that metrics be reported in an XML format.

Provisions of section 6 of the Act and policies announced in this Circular, will apply to all loans closed on or after January 1, 2020, regardless of when the loan is disbursed or when the Loan Guaranty Certificate (LGC) is issued. 

Provides updated guidance to assist lenders in implementing Section 6 of the Blue Water Navy Vietnam Veterans Act of 2019, including:

• Adjustment of Maximum Entitlement Amounts
  • Full entitlement
  • Partial entitlement
• Adjustment of Maximum Guaranty Amounts
  • Full entitlement
    
  • Partial entitlement
• Married Veterans
• Joint Loans
• Loan Fees
  • Adjustment of Loan (Funding) Fees
  • Waiver of Fees for Purple Heart Recipients
    • Eligibility
    • Evidence
    • Certificate of Eligibility (COE)

The Act applies with respect to an appraisal report prepared under section 3731(b)(3), on or after January 1, 2020. Consistent with the Act, VA will not begin accepting an appraisal, as described below, until on or after January 1, 2020. 

Provides updated guidance to assist lenders in implementing Section 7 of the Blue Water Navy Vietnam Veterans Act of 2019, including:

• AAPP Process
  • Definitions
  • Appraisal Order
  • VA Fee Panel Appraiser Requirements
  • Prior Approval
  • Tidewater Value Cases and Reconsideration of Value Cases

• See also 2019 Instructions for Form 1098
• To acquire a principal residence to the extent the points are allocable to an amount of principal in excess of the amount treated as acquisition indebtedness. Generally, the amount treated as acquisition indebtedness cannot exceed $750,000, but it may be up to $1 million if the borrower entered into a written binding contract before December 15, 2017, to close on the purchase before January 1, 2018, and purchased the residence before April 1, 2018 (the "written binding contract exception"). If you know that the written binding contract exception applies, report points that are allocable to an amount of principal up to $1 million.

For 1098 Impacts:

• Box 2. Outstanding Mortgage Principal
  • Must the amount of outstanding principal on the mortgage as of January 1, 2019. If you originated the mortgage in 2019, enter the mortgage principal as of the date of origination. If you acquired the mortgage in 2019, enter the outstanding mortgage principal as of the date of acquisition.
• Box 11. Mortgage Acquisition Date
  • If you acquired the mortgage in 2019, enter the date of acquisition.

The FHFA has increased the maximum base and super conforming loan limits as per property type.

• Amends rule to clarify advertising requirements of mortgage loan originators and companies

• [Amended] The redemption period shall  expire  two  years  after  lien  date, except  that a tax district may increase the redemption period for residential or farm property  in  the  manner  provided  by  section  eleven hundred eleven of this article, or a tax district may reduce the redemption  period  for  residential vacant and abandoned property to one year provided the property has been placed on a vacant and abandoned roll, or registry or list prior to the date on which taxes become  delinquent  in the  local  municipality
• [NEW] Expedited foreclosure proceedings for vacant  and abandoned  residential  real  property
  • property  may be subject to a redemption period of one year, only if the enforcing officer or his or her agent makes an affidavit to that  effect and the property has been placed on a local municipal roll, registry or list of vacant and abandoned property maintained by the  taxing  municipality
  • The affidavit shall be served on the property  owner  or  owners within one week of having the enforcing officer's signature affixed to it
  • The affidavit and copies of all attached  pictures,  exhibits  and other supporting  documentation shall be filed with the clerk of the town, village, or city in which the real property is located within one  week  of  having the enforcing officer's or his or her agent's signature affixed to it.

• The maximum principal amount of a loan that may be considered a high cost home loan will be $506,059.40 $506,059.40 shall be effective for all completed applications on loans that may be subject to the Act received by the lender on or after January 1, 2020

• Revises the sums that the clerks are entitled to charge and collect for filing documents and instruments pertaining to real estate or personal property
• $25.00 filing an instrument pertaining to real estate and personal property including liens a lien on real estate and personal property, notice of lis pendens, cancellation of a lien
• For any instrument that includes a request for cancellation, satisfaction,
  release, or assignment of more than one instrument, the filing fee specified in this division shall be submitted and paid for each such instrument which is to be canceled, satisfied, released, or assigned

• No penalties on prepayment or refinancing of a residential mortgage loan may be assessed on loans of less than $92,566, effective January 1, 2020

This Act amends the following:

Expands the maximum guaranty amounts for purchase, construction, and cash-out refinance loans that exceed Freddie Mac's conforming loan limits in certain circumstances.

The maximum amount of guaranty for a loan above $144,000 is 25% of the loan amount, regardless of the Freddie Mac conforming loan limits. 

For Veterans who have previously used entitlement that has not been restored, the maximum amount of guaranty is the lesser of 25% of the loan amount OR the maximum amount of guaranty entitlement available.

VA IRRRLs will continue to be guaranteed at 25% of the loan amount without regards to the Veteran’s available entitlement and/or Freddie Mac conforming loan limits.

The Act amends 38 U.S.C. § 3729(b)(2) by replacing the loan fee/funding fee table, see table for details.

Adds a waiver of the VA funding fee for Service Members who are on active duty that have been awarded the Purple Heart.

Authorizes VA to establish policies that enable VA-designated appraisers to rely on third-parties for appraisal related information.

Oklahoma Senate Bill 915 establishes remote online notarial acts; establishing procedures for online notarizations.

• Specifies requirements for covered entities that own, license, maintain, store, manage, collect, process, acquire or otherwise possess personal information, and for vendors that provide services to covered entities, to notify consumers of breach of security. 
• Specifies exemptions for certain covered entities that are subject to other laws governing protections and disclosures.

• Requires purchasers of residential real property to provide notice to seller regarding relinquishment of interests in property and rights to surplus funds after foreclosure complaint has been filed and before end of redemption period. 
• Requires sheriff, before conducting execution sale of real property, to provide on website certain notice to debtor regarding offers to sell rights to surplus funds. 
• Requires complaint in suit to foreclose residential trust deed to include notice to lien debtor regarding sales of redemption rights. 
• Prohibits transferring right to redeem property to successor in interest by sale.

• Breach disclosures to affected persons shall be made without unreasonable delay and in each case not later than the 60th day after the date on which the person determines that the breach occurred
• Breach disclosure to the attorney general shall be made not later than the 60th day after the date on which the person determines that the breach occurred if the breach involves at least 250 residents of Texas. The notification under this subsection must include specific data as defined in the rule. 

Requires certain documentation be provided if the borrower is a veteran of the armed forces, assistance may be available from a county veterans’ service officer or community action agency.

• For open-end consumer credit plans under TILA, the threshold that triggers requirements to disclose minimum interest charges will remain unchanged at $1.00 in 2020. 
• For open-end consumer credit plans under the CARD Act amendments to TILA, the adjusted dollar amount in 2020 for the safe harbor for a first violation penalty fee will increase by $1 to $29 and the adjusted dollar amount for the safe harbor for a subsequent violation penalty fee will increase by $1 to $40. 
• For HOEPA loans, the adjusted total loan amount threshold for high-cost mortgages in 2020 will be $21,980. 
• The adjusted points-and-fees dollar trigger for high-cost mortgages in 2020 will be $1,099. 
• For qualified mortgages, which provide creditors with certain protections from liability under the Ability-to-Repay Rule, the maximum thresholds for total points and fees in 2020 will be 3 percent of the total loan amount for a loan greater than or equal to $109,898; $3,297 for a loan amount greater than or equal to $65,939 but less than $109,898; 5 percent of the total loan amount for a loan greater than or equal to $21,980 but less than $65,939; $1,099 for a loan amount greater than or equal to $13,737 but less than $21,980; and 8 percent of the total loan amount for a loan amount less than $13,737.

House Bill 1885 amends Section 33.011 of the Tax Code by amending subsection (d) and adding subsection (k) as follows:

• House Bill 1885 amends subsection (d) by adding new subsection (k) to the list of subsections under which a taxpayer may request a waiver of penalties and interest provided the request is made before the 181st day after the delinquency date.

• House Bill 1885 adds subsection (k) to permit a taxing unit to waive penalties and interest on a delinquent property tax if: (1) the property for which the tax was owed is subject to a mortgage that does not require the property owner to fund an escrow account for payment of property taxes; (2) the tax bill was mailed or delivered by electronic means to the mortgagee, but the mortgagee failed to mail a copy to the property owner as required by law; and (3) the taxpayer paid the tax not later than the 21st day after the date the taxpayer knew or should have known of the delinquency.

House Bill 1885 takes effective January 1, 2020, and applies only to penalties and interest on a property tax that becomes delinquent on or after that date.

• House Bill 1254 amends Section 23.42 of the Tax Code by amending subsection (a) to
  delete the reference to subsection (a-1) and by repealing subsection (a-1), which prohibits an individual from having land designated for agricultural use if that land secures a home equity loan permitted by Section 50(a)(6), Article XVI, of the Texas Constitution. This amendment to the Tax Code was necessary so that it harmonizes with the 2017 constitutional amendment (SJR 60) amending Section 50(a)(6) to allow home equity loans to be secured by homesteads designated for agricultural use.

• We added requirements to the QC vendor reporting timeframes and the statistical sampling methodology. 
• We added more specific guidance related to the independence of the QC function, the QC staff, and the reverification of income, employment, and assets. 
• Lastly, we provided new flexibilities related to reverifying Social Security retirement income and military income.

Effective Date 

While lenders may implement these changes immediately, requirements related to QC independence and statistical sampling must be incorporated into the lender’s QC plan and implemented by January 1, 2020.

• Provides that a data collector required to report breaches to more than 100 Illinois residents as a result of a single breach must also report to the Attorney General. 
• Provides that the Attorney General shall report to the General Assembly specified information concerning breaches of data security by February 1 of each year.

To enable timely and accurate recertification of custodial documents, we have updated A2-7-03, Post-Delivery Servicing Transfers to require that when a post-delivery servicing transfer occurs, the transferor servicer must advise the transferor document custodian maintaining possession of the custodial documents within 30 days of the transfer effective date. 

Effective Date 

Servicers are encouraged to implement this change immediately, but must do so for post-delivery servicing transfers that occur on or after January 1, 2020. 

Final rule published by the Office of the Comptroller of the Currency, Treasury (OCC); Board of Governors of the Federal Reserve System (Board); and Federal Deposit Insurance Corporation (FDIC).  See the CFPB concurrence letter here. 

• The final rule increases the threshold level at or below which appraisals are not required for residential real estate transactions from $250,000 to $400,000
• Residential real estate transaction is defined as a real estate-related financial transaction that is secured by a single 1-to-4 family residential property that are not sold to or guaranteed — in whole or in part — by a government agency or government-sponsored enterprise.  Essentially, portfolio loans only.
• For  residential real estate transactions exempted from the appraisal requirement as a result of the revised threshold, regulated institutions must obtain an evaluation of the real property collateral that is consistent with safe and sound banking practices
• Rural Property Exemption: Where the property is located in a rural area; the transaction value is less than $400,000; the institution retains the loan in portfolio, subject to exceptions, and; not later than three days after the Closing Disclosure is given to the consumer, the mortgage originator or its agent has contacted not fewer than three state-licensed or state-certified appraisers, as applicable, and documented that no such appraiser, as applicable, was available within five business days beyond customary and reasonable fee and timeliness standards for comparable appraisal assignments, as documented by the mortgage originator or its agent.(effective on January 1, 2020)
• Amends the agencies’ appraisal regulations to require regulated institutions to
  subject appraisals for federally related transactions to appropriate review for compliance with the Uniform Standards of Professional Appraisal Practice (USPAP)

On April 3, the New Mexico governor signed HB 150, which amends the New Mexico Bank Installment Loan Act of 1959 and the New Mexico Small Loan Act of 1955 to, among other things, change provisions relating to financial institutions and 

(i) clarify that unfair or deceptive trade practices, or unconscionable trade practices, are considered violations of the Unfair Practices Act; 

(ii) expand annual lender reporting requirements, including identifying secured and unsecured loan products, fees and interests paid by the borrowers, loan terms, and default rates; 

(iii) clarify allowable loan insurance, including provisions related to licensing requirements for lenders; and 

(iv) expand state and federal disclosure requirements. 

The amendments also 

• limit interest and other charges (permitted finance charges cannot exceed the lesser of $200 or 10 percent of the principal with outlined exceptions); 
• grant rights of rescission within specified time frames to allow borrowers to return the full amount of funds advanced by the lender without being charged fees; 
• and provide for penalties for lenders who willfully violate any of the provisions. 

Specifically, the act applies to installment loans covered by the Installment Loan Act and the Small Loan Act, and does not apply to federally insured depository institutions. 

The act takes effect January 1, 2020, and is applicable to loans subject to the aforementioned acts that are executed on or after the effective date.

Utah Senate Bill 140 amends provisions related to real estate, including

• requires a background check for certain licenses to include ongoing monitoring through the Federal Bureau of Investigation's Next Generation Identification System's Rap Back Service; 
• requires the Division of Real Estate to establish a fee for background checks; and
• permits the Securities Commission to make rules, with the concurrence of the Division of Real Estate, in relation to background checks.

• creates new sections of KRS Chapter 423 to define various terms; 
• limits the applicability of the Act to notarial acts performed on or after January 1, 2020; 
• allows a notarial officer to perform a notarial act in Kentucky; 
• outlines requirements for certain notarial acts; 
• requires a personal or online appearance before a notarial officer; 
• specifies the requirements of identifying an individual before a notarial officer; 
• allows a notarial officer to refuse to perform a notarial act; 
• states who may perform a notarial act in Kentucky; 
• recognizes notarial acts performed in other states; 
• recognizes notarial acts performed in federally recognized Indian tribes under federal law, and in foreign countries; 
• allows a notary public to perform a notarial act by means of communication technology; 
• requires a notarial act to be evidenced by a certificate; 
• provides short-form certificates for use by notarial officers; 
• outlines the requirements for an official stamp of a notary public; 
• assigns responsibility of the notary public's stamping device to the notary public; 
• requires a notary public to maintain a journal chronicling all notarial acts performed by that notary public; 
• requires a notary public to register with the Secretary of State that the notary public will be performing notarial acts with respect to electronic records; 
• outlines the necessary requirements to be a notary public; 
• outlines grounds for suspending, denying, or revoking a commission as a notary public; 
• requires the Secretary of State to maintain an electronic database of notaries public; 
• details prohibited acts; 
• establishes the validity of notarial acts; 
• allows the Secretary of State to promulgate administrative regulations to implement this Act; 
• requires all commissions occurring after the effective date of this Act to comply with this Act; 
• states that a portion of this Act may be cited as the Uniform Real Property Electronic Recording Act; 
• creates a new section of KRS Chapter 382 to state that a paper copy of an electronic record shall satisfy a law requiring a tangible document; 
• amends KRS 423.200 to make technical corrections; 
• amends KRS 369.103 to allow electronic signatures on transactions relating to the conveyance of interests in real property and the creation or transfer of negotiable instruments; 
• amends KRS 382.230 to remove reference to KRS 382.140; 
• creates a new section of KRS Chapter 382 to provide for the order of priority between physical and electronic documents presented to the county clerk; 
• amends KRS 382.200 and 382.280 to make technical corrections; 
• amends KRS 64.012 to update fees of county clerks for recording documents; 
• amends KRS 382.240 to allow a reimbursement to county clerks for prepayment of postage; 
• amends KRS 382.360 to no longer require the county clerk to deliver the original deed of release; 
• creates a task force on issues regarding the implementation of this Act; and
• repeals KRS 382.140, 382.190, 423.010, 423.020, 423.030, 423.040, 423.050, 423.060, 423.070, 423.080, and 423.990.

The state of Idaho modified its provisions relating to its Revised Uniform Law on Notarial Acts that include providing for remotely located individuals and communication technology. These provisions are effective on January 1, 2020.

• Repeals the statutory provisions that regulate mortgage bankers and revises those that currently regulate mortgage brokers to apply to both mortgage brokers and mortgage bankers
• The term “mortgage company” includes mortgage bankers and mortgage brokers
• The term “mortgage agent” is changed to “mortgage loan originator”
• Amends certain bond requirements and exemptions applicable to mortgage companies

Effective for Mortgages with Settlement Dates on and after January 2, 2020

• For the monthly student loan payment to be excluded from the DTI ratio, the mortgage file must contain documentation indicating that the Borrower is eligible or approved for (previously, must have indicated meets the requirements for) the student loan forgiveness, cancellation, discharge or employment-contingent repayment program
• Evidence of eligibility or approval must come from the student loan program or the employer, as applicable

• This temporary rulemaking will govern the performance of notarial acts for remotely located individuals by use of communication technology and describe specifications for the use of tamper-evident technologies that are required for notarial acts performed with respect to electronic records

• Updating the Guide to increase the required notice period for a Document Custodian to terminate a Tri-Party Agreement from 30 to 90 days

We are also updating the Guide to:

• Align with current practices for processing new Tri-Party Agreements
• Provide more detail concerning the parties’ responsibilities upon termination of a Tri-Party Agreement
• Describe more specifically the duties and responsibilities of each party to a Transfer of Servicing or a transfer of custody

Effective for Mortgages with Settlement Dates on and after January 2, 2020

• Flood insurance and special assessments with more than 10 monthly payments remaining must be included in the monthly housing expense-to-income ratio for the subject property and in the monthly DTI ratio for any other property owned, as these items can have a significant impact on the Borrower’s ability to meet his or her monthly obligations

• Freddie Mac is no longer accepting applications to become or approving new Document Custodians
• The eligibility standards set forth in Section 2202.2 remain in effect for our current Document Custodians

• Clarified that a single building in a Condominium Project (regardless of whether the project is comprised of that single building or multiple buildings) may have only one legal phase and that marketing phases are not eligible

• The NCUA Board (Board) is amending its regulations governing the responsibilities of a federally insured credit union (FICU) to obtain an annual supervisory committee audit of the credit union. 
• The final rule implements recommendations outlined in the agency's Regulatory Reform Task Force's Regulatory Reform Agenda (Agenda) and will provide additional flexibility to FICUs. 
• The Board is: Replacing the Supervisory Committee Guide with a simplified appendix to the part; eliminating two audit types that FICUs seldom use; and eliminating a specific deadline for outside, compensated persons to deliver written audit reports to FICUs.

• Establishes a list of requirements that must be met by an applicant applying for a mortgage loan originator temporary license
• Establishes license application requirements; including that an applicant has seven business days upon notice of the issuance of temporary authority from the NMLS to submit his or her license application
• Temporary mortgage loan originator licenses will expire at the earliest of: a) the withdrawal by the applicant of their application; b) the date the Board denies the application; c) the date the Board approves and issues a license; d) the termination date of employment with the Responsible Colorado Licensed Mortgage Loan Originator; or e) 120 days after the date the applicant was issued the temporary license.

80-11-1-.01 Disclosure Requirements

All persons licensed, registered, or required to be licensed or registered under the Official Code of Georgia must provide the following disclosures for residential mortgage loans:

• A Fee Disclosure prior to acceptance of any fee
  • the disclosure shall be acknowledged in writing by the applicant and a copy of the acknowledgment maintained by the mortgage lender or mortgage broker required to make the disclosure, and a copy of the acknowledgment shall be given to the applicant
  • in instances of mail applications, the disclosure must be included in the mail application package with a request that a signed acknowledgment form be returned to the mortgage broker or lender required to make the disclosure
  • In instances of applications taken by telephone, the disclosure must be mailed or delivered to the applicant with a request that a signed acknowledgment form be returned to the mortgage broker or lender required to make the disclosure
  • A copy these requests shall be kept by the mortgage broker or mortgage lender
• A Foreclosure Disclosure at or before the time of settlement (applies to every mortgage lender and every mortgage broker with table funding) 
  • See rule for required disclosure language
  • The applicant shall be required to sign the disclosure and the lender or broker, as applicable, shall keep a copy of the signed disclosure

See Also: 80-11-3-.01 Administrative Fines and Penalties

80-11-1-.02 Advertising Requirements

• (a) Advertisements for mortgage loans shall not be false, misleading, or deceptive. 
• (b) Advertisements for mortgage loans shall not indicate in any manner that the interest rates or charges for loans are in any way recommended, approved, set or established by the state or by any law of the state. 
• (c) All solicitations or advertisements, including business cards and websites, for mortgage loans disseminated in this state by persons required to be licensed or registered under O.C.G.A. Title 7, Chapter 1, Article 13 shall contain the name, license number, valid unique Nationwide Mortgage Licensing System and Registry (NMLSR) identifier, and an office address of the licensee or registrant advertising the mortgage loan, which name, address, and license number shall conform with the name, license number, valid unique NMLSR identifier and office address on record with the Department of Banking and Finance. 
• (d) All advertisements disseminated in this state by persons required to be licensed under O.C.G.A. Title 7, Chapter 1, Article 13 in any media, whether print or electronic, shall contain the words “Georgia Residential Mortgage Licensee” or, if an entity is licensed in more than one state, the licensee’s advertisement may list Georgia as a state in which the licensee is licensed. 
• (e) All advertisements for mortgage loans shall comply with all applicable federal and state laws.
• (f) For purposes of this Rule, "advertisement" means material used or intended to be used to induce the public to apply for a mortgage loan. Such term shall include any printed or published material, audio or visual material, website, or descriptive literature concerning a mortgage loan subject to regulation under O.C.G.A. Title 7, Chapter 1, Article 13 whether disseminated by direct mail, newspaper, magazine, radio or television broadcast, electronic, billboard or similar display. The term advertisement shall not include promotional materials containing fifteen words or fewer relating to the mortgage business of the entity which material does not contain references to a specific rate or product, such as balloons, hats, pencils or pens, and calendars. 
• (g) Every mortgage broker or mortgage lender required to be licensed or registered shall maintain a record of samples of its advertisements (including commercial scripts of all radio and television broadcasts) for examination by the Department of Banking and Finance.
• (h) An advertisement shall not include an individual’s loan number, loan amount, or other publicly available information unless it is clearly and conspicuously stated in bold-faced type at the beginning of the advertisement that the person disseminating it is not authorized by, acting on behalf of, or otherwise affiliated with the individual’s lender, which shall be identified by name. Such an advertisement shall also state that the loan information contained therein was not provided by the recipient’s lender. 
• (i) In the event that a mortgage broker or lender sponsors a mortgage loan originator purporting to operate under the temporary authority requirements set forth in 12 U.S.C. § 5117, any advertisement by the mortgage broker or lender that mentions such mortgage loan originator’s ability to act as mortgage loan originator in Georgia shall clearly and conspicuously indicate that the individual has temporary authority to operate in Georgia. Any such advertisement must also clearly and conspicuously indicate that the individual is unlicensed, has submitted a license application to the Department, and the Department may grant or deny the license application.

See Also: 80-11-3-.01 Administrative Fines and Penalties

Massachusetts Division of Banks amended the regulations governing the procedures and requirements for the licensing and supervision of mortgage loan originators.

Sec. 3212. (1) A notice of foreclosure by advertisement must include all of the following:

(a) The names of the mortgagor, the original mortgagee, and the foreclosing assignee, if any.

(b) The date of the mortgage and the date the mortgage was recorded.

(c) The amount claimed to be due on the mortgage on the date of the notice.

(d) A description of the mortgaged premises that substantially conforms with the description contained in the mortgage.

(e) A description of the property by giving its street address, if any. The validity of the notice and the validity of any eventual sale under this chapter are not affected by the fact that the street address in the notice is erroneous or that the street address is omitted.

(f) For a mortgage executed after December 31, 1964, the length of the redemption period as determined under section 3240.

(g) A statement that if the property is sold at a foreclosure sale under this chapter, under section 3278 the borrower will be held responsible to the person who buys the property at the mortgage foreclosure sale or to the mortgage holder for damaging the property during the redemption period.

(h) The name, address, and telephone number of the attorney for the party foreclosing the mortgage.

(i) For a residential mortgage, a statement in the following form: Attention homeowner: If you are a military service member on active duty, if your period of active duty has concluded less than 90 days ago, or if you have been ordered to active duty, please contact the attorney for the party foreclosing the mortgage at the telephone number stated in this notice.

(j) A statement in the following form: Notice of foreclosure by advertisement. Notice is given under section 3212 of the revised judicature act of 1961, 1961 PA 236, MCL 600.3212, that the following mortgage will be foreclosed by a sale of the mortgaged premises, or some part of them, at a public auction sale to the highest bidder for cash or cashier's check at the place of holding the circuit court in ________ County, starting promptly at (time), on (date). The amount due on the mortgage may be greater on the day of the sale. Placing the highest bid at the sale does not automatically entitle the purchaser to free and clear ownership of the property. A potential purchaser is encouraged to contact the county register of deeds office or a title insurance company, either of which may charge a fee for this information.

(2) The party foreclosing the mortgage shall not publish a notice of foreclosure under this chapter in a newspaper in which the party foreclosing, or its agent, has a majority ownership interest.

1. [Eff. until Jan. 14, 2020, pursuant to L.2009, c. 507, § 25, subd. a; L.2016, c. 73, pt. Q, § 11 . See, also, subd. 1 below.] Notwithstanding any other provision of law, with regard to a home loan, at least ninety days before a lender, an assignee or a mortgage loan servicer commences legal action against the borrower, or borrowers at the property address and any other address of record, including mortgage foreclosure, such lender, assignee or mortgage loan servicer shall give notice to the borrower in at least fourteen-point type which shall include the following:

“YOU MAY BE AT RISK OF FORECLOSURE. PLEASE READ THE FOLLOWING NOTICE CAREFULLY”

1. [Eff. Jan. 14, 2020, pursuant to L.2009, c. 507, § 25, subd. a; L.2016, c.73, pt. Q, § 11. See, also, subd. 1 above.] Notwithstanding any other provision of law, with regard to a high-cost home loan, as such term is defined in section six-l of the banking law , a subprime home loan or a non-traditional home loan, at least ninety days before a lender or a mortgage loan servicer commences legal action against the borrower, including mortgage foreclosure, the lender or mortgage loan servicer shall give notice to the borrower(s) at the property address and any other address of record in at least fourteen-point type which shall include the following:

“YOU MAY BE AT RISK OF FORECLOSURE. PLEASE READ THE FOLLOWING NOTICE CAREFULLY”

2. [Eff. until Jan. 14, 2020, pursuant to L.2009, c. 507, § 25, subd. a;  L.2016, c.73, pt. Q, § 11.  See, also, subd. 2 below.] Such notice shall be sent by such lender, assignee (including purchasing investor) or mortgage loan servicer to the borrower, by registered or certified mail and also by first-class mail to the last known address of the borrower, and to the residence that is the subject of the mortgage.  Such notice shall be sent by the lender, assignee or mortgage loan servicer in a separate envelope from any other mailing or notice.  Notice is considered given as of the date it is mailed.  

The notice shall contain a current list of at least five housing counseling agencies serving the county where the property is located from the most recent listing available from department of financial services.  The list shall include the counseling agencies' last known addresses and telephone numbers.  The department of financial services shall make available on its websites a listing, by county, of such agencies.  The lender, assignee or mortgage loan servicer shall use such lists to meet the requirements of this section.

2. [Eff. Jan. 14, 2020, pursuant to L.2009, c. 507, § 25, subd. a;  L.2016, c.73, pt. Q, § 11.  See, also, subd. 2 above.] Such notice shall be sent by the lender or mortgage loan servicer to the borrower, by registered or certified mail and also by first-class mail to the last known address of the borrower, and to the residence which is the subject of the mortgage.  Notice is considered given as of the date it is mailed. 

The notice shall contain a current list of United States department of housing and urban development approved housing counseling agencies, or other housing counseling agencies serving the county where the property is located from the most recent listing available from the department of financial services.  The list shall include the counseling agencies' last known addresses and telephone numbers.  The department of financial services shall make available a listing, by county, of such agencies which the lender or mortgage loan servicer may use to meet the requirements of this section.

3. The ninety day period specified in the notice contained in subdivision one of this section shall not apply, or shall cease to apply, if the borrower has filed for bankruptcy protection under federal law, or if the borrower no longer occupies the residence as the borrower's principal dwelling.  Nothing herein shall relieve the lender, assignee or mortgage loan servicer of the obligation to send such notice, which notice shall be a condition precedent to commencing a foreclosure proceeding.

4. The notice and the ninety day period required by subdivision one of this section need only be provided once in a twelve month period to the same borrower in connection with the same loan and same delinquency.  Should a borrower cure a delinquency but re-default in the same twelve month period, the lender shall provide a new notice pursuant to this section.

5. For any borrower known to have limited English proficiency, the notice required by subdivision one of this section shall be in the borrower's native language (or a language in which the borrower is proficient), provided that the language is one of the six most common non-English languages spoken by individuals with limited English proficiency in the state of New York, based on United States census data.  The department of financial services shall post the notice required by subdivision one of this section on its website in the six most common non-English languages spoken by individuals with limited English proficiency in the state of New York, based on the United States census data.

Paragraph 16.2: 

• Clarification for lender requirements on closing timeframes. 
• Removed redundant language regarding Lender Certification which is already stated on form RD 3555-18, Conditional Commitment. 

Paragraph 16.3: 

• Added language for submission of the technology fee when requesting the loan note guarantee in both electronic or manual submissions. 
• Added statement for use of the Lender Loan Closing (LLC) automated system for loan closing submissions. 

Paragraph 16.4: 

• Removed references to specific paragraphs in the handbook. 
• Added hyperlink to the regulations/handbook website stated in this paragraph. 

Paragraph 16.5 J: 

• Added hyperlink to USDA Linc & Training Resource Library website. 

Paragraph 16.6: 

• Added paragraph introducing the requirement of the Technology Fee and guidance on how it will be collected and submitted to the Agency. 

Paragraph 16.6 A: 

• Added statement regarding the current amount of the technology fee and future notifications to lenders if there are changes to the fee amounts. 

Paragraph 16.6 B: 

• Added statement on how the technology fee will be disclosed on Loan Estimates and Closing Disclosures in compliance with the CFPB. 

Paragraph 16.7: 

• Paragraph 16.6 is renumbered to 16.7. 

Paragraph 16.7 B: 

• Provided a list of documents the lender must submit when using electronic method of loan closing to obtain the loan note guarantee. 
• Provided a list of agency staff responsibilities prior to the issuance of the loan note guarantee. 

Paragraph 16.7 C: 

• Clarification that cash back at closing in excess of the allowed out of pocket costs will result in non-issuance of the loan note guarantee. 
• Replaced the previous table with new table that refers lenders to the new Attachment 16-C, Loan Closing Reference Guide. 

Paragraph 16.8: 

• Paragraph 16.7 is renumbered to 16.8. Edited the example with recent dates. 

Paragraph 16.9: 

• Paragraph 16.8 is renumbered to 16.9. Revised ‘‘electronic loan closing’’ to ‘‘Lender Loan Closing system.’’ 

Paragraph 16.10:

• Paragraph 16.9 is renumbered to 16.10.
• Revised ‘‘Selling Loans’’ to ‘‘Transferring Loans and/or Servicing Rights.’’

Paragraph 16.11:

• Paragraph 16.10 is renumbered to 16.11.

Paragraph 16.12:

• Paragraph 16.11 is renumbered to 16.12.

Paragraph 16.12 B 2:

• Removed the requirement for states to issue a supplement for loans in tribal land and provided additional guidance on processing these loans.

Paragraph 16.12 C 1:

• Clarified that the 1 percent maximum deductible for hazard insurance is a recommended amount.

Paragraph 16.12 C 2:

• Clarified that the 1 percent maximum deductible for flood insurance is a recommended amount.

Attachment 16-A:

• Removed ‘‘Stacking Order’’ from the document name and references indicating a specific order of the documents submitted. 
• Added statement that the attachment is only required for manual loan closing submissions. 
• Added the USDA Technology Fee to the checklist.

Attachment 16-C:

• Added this attachment with frequently asked questions and solutions that provides guidance to lenders on how corrections should be made after loan closing, for pre- and post- LNG issuance. 

The following updates were made to HB-1-3555 Chapter 2 to replace field office and State Director references with the appropriate division as a result of the SFHGLP reorganization and add training requirements for new SFHGLP specialists. 

Paragraph 2.3 B: 

• - Removed second paragraph due to outdated documentation scanning requirements; 
• - State was replaced by the Agency throughout the section; 
• - Replaced ‘‘Form RD 1940-22’’ with ‘‘RD Instruction 1970-B, Exhibit D;’’ 
• - Replaced HUD 1 ‘‘Settlement Statement’’ with Closing Disclosure;’’ 
• - Replaced ‘‘State Director’’ with ‘‘Director of Origination and Processing Division.’’ 

Attachment 2-A: 

• - Replaced reference to the State with the Agency throughout the attachment; 
• - Replaced Form 1940-22, with Instruction 1970-B, Exhibit D; and 
• - Replaced HUD 1 ‘‘Settlement Statement’’ with ‘‘Closing Disclosure;’’ 

• Paragraph 6.2D: Refer to Attachment A instead of Attachment B;
• Paragraph 6.2D(b), edited for clarity under loan application documentation; 
• Attachment 6-A, clarify the net tangible benefit applies to the principal and interest payment plus the annual fee; 
•  Attachment 6-A, remove outdated maximum interest rate language. 

• Clarified language on mediation and adverse decisions.
• Added guidance to Inform Program Participants of Their Rights.
• Clarified language pertaining to the Informal Administrative Review process and added bullet regarding retention of the documentation in each case.
• Changed all language from State Director to Director Origination and Processing Branch (OPB).
• Updated web links to current, active links.
• Added bullets to outline the rights the participants have in the Appeals process. 

• You may currently receive a warning message in Loan Selling Advisor if you deliver Investor Feature Identifier (IFI) G18 (Mortgage with an Affordable Second entered into Loan Product Advisor in the "Total Gift Fund" field) without also delivering the required secondary financing data. 
• We’re providing advanced notice that the message will switch from warning to critical severity as of January 21, 2020. 
• Loans settling on or after January 21 must contain secondary financing data when IFI G18 is present, otherwise you will receive a critical edit. 
• For special delivery requirements for mortgages with secondary financing, refer to Single-Family Seller/Servicer Guide Section 6302.34. 

• You currently receive a warning message in Loan Selling Advisor if you deliver Investor Feature Identifier (IFI) G18 (Mortgage with an Affordable Second entered into Loan Product Advisor in the "Total Gift Fund" field), without delivering the required secondary financing data. 
• This warning edit will switch to critical severity on January 21, 2020; loans with Freddie Mac Settlement Dates on or after January 21 must be delivered with secondary financing data when IFI G18 is entered. 
• Important details can be found in the ULDD Data Delivery Tips 2: Affordable Loans job aid. 
• For special delivery requirements for mortgages with secondary financing, refer to Guide Section 6302.34>span class="sr-only">Opens in a new window.

Effective the date of this notice, lenders are authorized to suspend the following:

• Credit Score Validation for GUS ACCEPT files
• Downgrade a GUS ACCEPT file with manually entered debts

Refer to Attachment 10-A “Credit Matrix” of the advance copy of Chapter 10.