Pursuant to our annual audit, the Florida Interest Rate Lock Agreement will be modified. Most of the edits to this document are minor edits to the text, such as punctuation and capitalization, for grammatical purposes. There are, however, a couple of substantial changes that will be made:
a. A new introductory sentence will be included at the beginning of the body of this document, as follows:
“‘You,’ ‘your,’ and other second person pronouns refer to the Borrower(s) set forth above,” to help in identifying who exactly is the “you” referred to in the document.
b. The “Loan Program Name” field will no longer be used to fill out “Loan Type.” Loan information including Loan Type, Amortization Type, ARM Fixed Period, ARM Periodic Adjustment Period, ARM Index, Interest Only indicator, and Balloon indicator will be used to build a description of the type of loan.
c. A new paragraph will be added after the second paragraph following the “Lock-in Interest Rate” section, with text as follows:
“You are hereby advised, pursuant to Florida law, that before issuing a mortgage loan rate lock-in agreement, a mortgage lender must have the ability to timely advance funds (having sufficient liquid assets or a line of credit necessary to cover all rate lock-in agreements issued with respect to which a lock-in fee is collected) on all mortgage loans for which rate lock-in agreement have been issued. A mortgage lender that does not comply with this may issue mortgage rate lock-in agreements only if, prior to the issuance, the mortgage lender:
1. Has received a written rate lock-in agreement from a mortgage lender that complies with Florida law; or
2. Has received a written rate lock-in agreement from an institutional investor or an agency of the Federal Government or the state or local government that will be funding, making, or purchasing the mortgage loan.”
This text is being added to help clients stay in compliance with Florida law and to identify whether they are permitted to provide this document or not.
d. The last sentence of the document (“Thus, this lock-in may be subject to change if any of the other loan factors change.”) will be deleted, due to redundancy.
e. Citations to applicable Florida law will be added to the document. These citations are:
Fla. Stat. Ann. § 494.0069 (West 2012)
Fla. Admin. Code Ann. r. 69V-40.155 & 69V-40.260 (2012)
These changes will take effect on February 15, 2013. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.
February 8, 2013