In addition to the edits being made to Cx3148, which were previously announced (see http://www.docutechcorp.com/document-changes-va-3200-note-fixed-cx58-and-3501-1-yr-treasury-modified-for-va-arm-cx3148), we will also be changing the text of Section 11 of the document.
Our VA promissory notes and security instruments largely follow the FNMA uniform notes and instruments, though they are altered for use for VA-guaranteed loans. Currently, Section 11 of Cx3148 matches the same section set forth in FNMA Form 3501. This Section informs the borrower of certain provisions that will be found in the security instrument accompanying the note, concerning acceleration and assumption.
Under VA Lender’s Handbook ch. 9, 1. a & c, security instruments modified for use in VA-guaranteed loans must contain, either within the instruments themselves or in a rider thereto, a specified Acceleration Clause. Minor adaptions may be made to this Clause as “necessary to ensure that they have the effect required by the law and regulations.”
Because this Acceleration Clause is included (by rider) in our VA versions of the security instruments, it is better to make reference to this Clause rather than to the acceleration clauses which are used in the FNMA security instruments.
For this reason, we will be replacing the last, long sentence in the second paragraph of Section 11, as well as the third paragraph, with substantially similar text to the Acceleration Clause, recommended by one of our clients.
This change will take effect immediately.
July 12, 2013