DocuTech’s “MA Borrower’s Interest Worksheet” is given pursuant to Mass. Gen. Laws Ann. ch. 183, §28C and Mass. Regs. Code tit. 209, §§53.03, 53.04, & 53.07, which require lenders to determine whether a home loan is in the interest of their borrowers. The last section cited above requires that the worksheet include, at a minimum:
“(a) if a lender determines that a home loan meets one of the factors in 209 CMR 53.04(1) [factors which, if existing, make the loan of benefit to the borrower without further consideration], the lender shall indicate specifically how the home loan fulfills such factor; or
(b) if a home loan does not meet one of the factors in 209 CMR 53.04(1), a lender shall indicate specifically how the lender determined that the home loan was in the borrower’s interest.”
Cx5771 is split into two sections, the first of which provides a checklist of the factors in 209 CMR 53.04(1) (“automatic factors”), while the second provides a checklist of the alternative factors that can be used to determine if the loan is in the borrower’s interest, which are set forth in other subsections of Ibid (“alternative factors”). From a legal standpoint, if any of the “automatic factors” is present in the loan, then it is not necessary to determine any “alternative factors,” since the loan is automatically considered to be in the borrower’s interest.
Currently, both “automatic” and “alternative” factors may be checked in Cx5771, rather than one or the other. Although such an arrangement does not cause any compliance issues, it may cause some confusion on a borrower’s part in knowing whether his loan is automatically considered beneficial to him, or whether a determination needs to be made as to its benefits.
To prevent such confusion, Cx5771 will be changed so that only “automatic” or “alternative” factors, located in Sections One or Two respectively, are checked. Language is also being added to the document to indicate that only the factors in one of the sections needs to be checked.
These changes will take affect September 29, 2012. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.
September 21, 2012