04.03.12   •   Document Updates

New York, New York!

Pursuant to our annual state-specific disclosure audit, the following changes will be made to New York-specific documents:

1. New York Application Disclosure (Cx9710):

This is a new document, created pursuant to the provisions of N.Y. Comp. Codes R. & Regs. tit. 3, §38.3(b). Although the requirements of this section have been fulfilled by DocuTech through the use of other disclosures (as allowed under Clause [2][iii] of this subsection), it has been decided to produce this document in addition to such disclosures, in order to better ensure that all loan packages are in compliance.

This document will print only for lenders and only for loans secured by owner-occupied property. The contents of this document include disclosures concerning the amount and terms of any refunds of certain fees, whether a lender assigns its commitments to other entities, information about prepayment penalties, the lender’s contact information, and state-specific language concerning discount points (when applicable).

2. NY Consumer Caution Notice (Cx12865):

This document is required under N.Y. Banking Law §6-l(2)(l)(ii) and N.Y. Comp. Codes R. & Regs. tit. 3, §41.3(a)(2). Changes to this document will primarily be for grammatical purposes, with the following substantive changes:

  1. A new fourth paragraph will be added, which will contain the following language: “Property taxes and homeowner’s insurance are your responsibility. Not all lenders provide escrow services for these payments. You should ask your lender about these services.”
  2. The following sentence will be added to the end of the last paragraph: “Accordingly, it is important that you make regular payments to your existing creditors.”

3. NY Interest Rate Lock Commitment (Cx3588):

This document is required under N.Y. Comp. Codes R. & Regs. tit. 3, §38.4(a), a model form for which is published by the New York Department of Banking on their website (http://www.banking.state.ny.us/mbdlfrmf.htm). Cx3588 is a duplicate of the model form and the following changes are being made to make it match the newest version of the model form:

  1. Minor textual edits;
  2. The last sentence in §7 will be deleted (“If your loan does not close by this date, we have no obligation to honor the terms of this agreement.”);
  3. The section concerning cooperative housing (§17) will only print if the loan is secured by cooperative property; and
  4. Language recommended by the New York Banking Division concerning private mortgage insurance (see http://www.banking.state.ny.us/mbb90614.htm) will be included in §13 (concerning real estate tax and hazard insurance escrows).

4. NY Notice to Cosigner (Cx12871):

This document is required under N.Y. Gen. Oblig. Law §15-702(3) and it should contain certain text which changes depending upon the type of loan. This document will now have certain text printing on it if the loan is a HELOC.

5. NY Pre-Application Disclosure and Fee Agreement (Cx3587):

This document is required under N.Y. Comp. Codes R. & Regs. tit. 3, §38.3(a)(1), a model form for which is published by the New York Department of Banking on their website (http://www.banking.state.ny.us/mbdlfrmf.htm). Cx3587 is a duplicate of the model form and the following changes are being made to make it match the newest version of the model form:

  1. The “Designated Lenders” section will only print on the document if any values are inputted in the appropriate fields. According to the model form instructions, this section should only print if applicable and, according to administrative law, it is only applicable if the broker places “loans primarily with any three or fewer lenders” (Ibid. [iii]);
  2. The “Broker Fee” section will be updated to match the newest version of the model form; and
  3. The “Division of Fees” section will only print if there is a value in either of the last two fields of such section, pursuant to the model form’s instructions.

6. NY Mortgages (Cx 343, 396, 501, 16198, and 16245):

N.Y. Banking Law §§6-l(2-a)(a) & 6-m(5) and N.Y. Comp. R. & Regs. tit. 3, §41.7 require certain legends to print at the top of the first page of all mortgages, if the mortgage is either a high-cost home loan mortgage or a subprime home mortgage. These legends have now been added to all New York mortgages and will print the following language, where applicable:

  1. For a high-cost home loan: “This mortgage is a high-cost home loan subject to N.Y. Banking Law §6-l and Part 41 of the General Regulations of the Banking Board of the state of New York.”
  2. For a subprime home loan: “This mortgage is a subprime loan subject to N.Y. Banking Law §6-m.”

7. NY Prevailing Interest Rate Commitment (Cx3710):

This document is required under N.Y. Comp. Codes R. & Regs. tit. 3, §38.5, a model form for which is published by the New York Department of Banking on their website (http://www.banking.state.ny.us/mbdlfrmf.htm). Cx3710 is a duplicate of the model form and the following changes are being made to make it match the newest version of the model form:

  1. Minor textual edits;
  2. The paragraph concerning proprietary leases in §17 will only print where applicable; and
  3. A new Clause (D) will be added to §16: “If the interest rate exceeds the rate for which you qualify and therefore, this commitment becomes null and void.”

8. NY High Cost Loan Insurance Disclosure (Cx3673):

This document is required under N.Y. Comp. Codes R. & Regs. tit. 3, §41.5(b)(5) and discloses information concerning insurance that is applicable to a high-cost loan transaction. The entire language of this document is being revamped primarily for grammatical reasons, but a few substantive changes are being made, as follows:

  1. Language is being added to include accident and health, disability, property, and unemployment insurance;
  2. The format of the text will be in 12-point, boldface type; and
  3. A lender’s signature line is being added in order for the broker or lender to affirm that he complied with the administrative rule provisions which require that he provide this disclosure to the borrower, both in written and oral forms, at least 10 business days before closing.

9. NY High Cost Loan Insurance Disclosure (Cx3673):

This document is required under N.Y. Comp. Codes R. & Regs. tit. 3, §41.5(b)(5) and discloses information concerning insurance that is applicable to a high-cost loan transaction. The entire language of this document is being revamped primarily for grammatical reasons, but a few substantive changes are being made, as follows:

  1. Language is being added to include accident and health, disability, property, and unemployment insurance;
  2. The format of the text will be in 12-point, boldface type; and
  3. A lender’s signature line is being added in order for the broker or lender to affirm that he complied with the administrative rule provisions which require that he provide this disclosure to the borrower, both in written and oral forms, at least 10 business days before closing.

10. NY Pre-Application Disclosure for Licensed Bankers (Cx5100):

This document is required under N.Y. Comp. Codes R. & Regs. tit. 3, §38.3(c)(1), a model form for which is published by the New York Department of Banking on their website (http://www.banking.state.ny.us/mbdlfrmf.htm). Cx5100 is a duplicate of the model form and the following changes are being made to make it match the newest version of the model form:

  1. The “Designated Lenders” section will only print on the document if any values are inputted in the appropriate fields. According to the model form instructions, this section should only print if applicable and, according to administrative law, it is only applicable if the broker places “loans primarily with any three or fewer lenders” (Ibid. [iii]); and
  2. The “Private Lenders” section will only print if the loan will be placed with a private lender; and
  3. The “Division of Fees” section will only print if there is a value in either of the last two fields of such section, pursuant to the model form’s instructions.

These changes shall take effect April 05, 2012. If you have any questions or concerns about this change, please contact Client Support at 1.800.497.3584.

April 03, 2012
DR 115635, 118912, and 123023