Iowa Code Ann. § 537.3208 requires, in connection with a consumer credit transaction, that a cosigner receive a prescribed notice concerning the cosigner’s liability in connection with such a transaction, before the cosigner becomes obligated under the transaction agreement.
A “consumer credit transaction” is a broad term encompassing consumer credit sales, consumer loans, consumer leases, and consumer rental purchase agreements (see Iowa Code Ann. § 537.1301). Of these types of transactions, the only ones that pass through the ConformX system are consumer loans, which are loans with a principal amount of $25,000 or less, but which are not secured by a first lien on real property and used to purchase such property, or used to refinance such a purchase loan, or for constructing a building on the property (see Ibid. § 537.1301 for the complete definition of these loans).
We provide a copy of the prescribed notice as Cx1022. Pursuant to our yearly audit of state-specific disclosures, we will be modifying this document in the following ways:
1. We will be changing the regular loan information area that appears above the “Notice” section to match our standard regular loan information area which appears on most other documents;
2. We will be filling out the area appearing in the “Identification of Debt You May Have to Pay” section, rather than leaving blank lines;
3. The citation to Iowa Code Ann. § 537.3208 will be updated to more closely match Blue Book standards;
4. Limiting the signature lines to individuals who are cosigners; and
5. Changing the configurations to the document so that it only prints in Closing packages for loans secured by property in Iowa, when:
a. The loan is a junior lien;
b. It is a refinance (cash-out or otherwise) or a HELOC;
c. The loan amount is $25,000 or less; and
d. A co-signer is present in the loan transaction.
These changes will take effect on July 25, 2013. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.
July 18, 2013