N.M. Stat. Ann. § 58-21B-20(A) requires the following (in relevant part):
“A mortgage loan originator shall, [sic] enter into a fiduciary relationship with the borrower. For the purposes of this subsection, ‘fiduciary relationship’ is a relationship in which a mortgage loan originator shall:
(7) disclose to the borrower the existence of all loans available to the mortgage loan originator, for which the borrower qualifies, that have terms that are as favorable or more favorable than those loans offered to the borrower by the mortgage loan originator.”
Due to the wide varieties and types of alternative loans which a vast array of clients may be able to offer borrowers, most (if not all) of our clients generally fulfill this requirement by providing their borrowers with in-house documentation which sets forth the terms and conditions of such loans. Such arrangement is quite useful, since providing a disclosure through ConformX would be quite taxing due to the fact that LOS’ generally do not generate information about alternative loans which can be abstracted, thus loan officers would need to manually input such vast information into ConformX in order for such a disclosure to print properly.
Nevertheless, there is a means (in certain circumstances) for clients to comply with this requirement by completing the Tradeoff Table on the Good Faith Estimate. In order to help ensure that clients are aware of this fact (and of the general disclosure requirement), we have created a new warning in ConformX which will appear for New Mexico Initial package types when “Print GFE” equals “Yes,” and when at least one of the following input fields for the Table are empty:
Interest Rate with Lower Settlement Charges (Field 42983)
Interest Rate with Lower Interest Rate (Field 42984)
Estimated Settlement Charges with Lower Settlement Charges (Field 42987)
Estimated Settlement Charges with Lower Interest Rate (Field 42988)
The text of the warning will be as follows:
“N.M. Stat. Ann. § 58-21B-20(A)(7) requires a disclosure to the borrowers informing them of any loans they qualify for which are as (or more) favorable than this loan. You should complete the tradeoff table if you have not provided another disclosure to comply with this requirement.”
The warning will begin to appear on March 4, 2014. If you have any questions or concerns about this change, please contact Client Support at 1.800.497.3584.
February 24, 2014