Pursuant to our yearly audit of state-specific disclosures, we will be making the following changes to the following documents:
New Document – VA Credit Insurance Disclosure (Cx18552)
This document is being provided pursuant to the provisions of Va. Code Ann. §§ 38.2-233(B) & (D) and 38.2-3735. It discloses the following to the borrower:
1. What the term “credit insurance” includes;
2. That if credit insurance is required, the borrower may furnish the required amounts through existing policies and that they may choose any insurer authorized to transaction insurance in Virginia;
3. That the lender offers optional credit insurance, that the borrower is not required to purchase such insurance and that such choice is not a factor in the lender’s decision to extend a loan.
Due the provisions of Ibid.§ 38.2-233(G), there is also a lender certification at the end of the document in which the lender certifies that the form obtains a Flesch Readability Score of forty or more. There is also a note to the lender at the end of the document, informing them that additional disclosure may be necessary, depending on the types of credit insurance premiums charged and plans offered (such disclosures will need to be provided outside of ConformX, since the information required to be disclosed is not passed to us from any LOS).
This document will be configured to print when:
1. The term of the loan is 10 years or less;
2. Credit insurance is being obtained in connection with the loan;
3. “Document Package” equals “Initial Disclosure”;
4. “Loan Purpose” equals either “CashOutOther”, “NoCashOutOther”, or “HELOC”;
5. “Lien Position” equals “SecondLien”; and
6. “State Code” equals “Virginia.”
New Document – VA Depository Institution Insurance Disclosure (Cx18553)
This document is provided due to the provisions of Va. Code Ann. § 38.2-513.1(a)(10) and is only required to be provided by depository institutions who sell an insurance policy. This disclosure informs the borrower that the insurance policy is not a deposit, is not insured by any Federal government agency, is not guaranteed by the institution, and may involve investment risks.
Due the rare circumstances under which this document is required, it will be available on an “upon request” basis only. Once a client requests it, it will print in their Initial Disclosure packages for loans secured by property in Virginia.
Revisions – Fixed Rate Note Virginia Second (Cx1077) and HELOC Agreement – VA (Cx4031)
Currently, Section 10 of our standard fixed-rate, junior lien note (Cx1077) states “I waive my homestead exemption.” We will be revising this text to more closely match the model language set forth in Va. Code Ann. § 34-22 (“I waive the benefit of my exemption as to this obligation”).
We will also be adding a new Subsection 18(N) to Cx4031 which also contains a slightly altered version of the model language. Current Subsection 18(N) will be renumbered to Subsection 18(O).
Revisions – Loan Brokerage Agreement (Cx3841)
We will be updating the legal citation to “Va. Code Ann. § 6.2-1616(B)(4); Va. Admin. Ruling 1607” and will be deleting the broker signature acknowledgement and line, since these are not required.
Revisions – VA Lock-in Agreement (Cx14674)
In addition to slight textual changes to the first and second-to-last paragraph of the agreement, we will be changing the following:
- In the “Refundability” section, adding a disclaimer stating that a lock-in fee is non-refundable, unless applicable law provides otherwise.
- In Clause (A) of the “Refundability” section, we will be replacing references to the commitment period and agreement to refer instead to the lock-in period and agreement.
- In the last paragraph (before the signature acknowledgments), additional text will be added to clarify that the lender may declare the agreement null and void, if the lock-in fee is not received by a certain date.
- A citation to 10 Va. Admin. Code § 5-160-30(B) will be included just before the signature acknowledgments.
- A new lender signature acknowledgment will appear before the lender signature line.
These new documents will begin printing, and these changes will take effect, on April 17, 2014. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.
April 10, 2014
DR 150330 and DR 150329