While not required by any specific laws, we provide on a generic basis an “Errors and Omissions/Compliance Agreement,” in which the borrower agrees to correct, within 30 days of a written request, any clerical errors which they may have made on closing documents and to assume all costs incurred by the lender due to such errors (e.g. marketing losses when an investor refuses to purchase the loan due to such errors).
While generally allowed by most laws, these costs may or may not be allowed under some laws, depending on how a court would interpret their provisions (such as the Pennsylvania Mortgage Lending Act, 61 Pa. Cons. Stat. Ann. ch. 61).
In order to mitigate any potential compliance issues, we will be modifying the last sentence in the second paragraph of Cx4 so that it will now state the following (text additions are italicized):
“Borrower(s) agree(s) to assume all costs including, by way of illustration and not limitation, actual expenses, legal fees and marketing losses for failing to comply with correction requests in the above noted time period, unless prohibited by applicable law.”
Also, due to client feedback, we will be modifying the California-notary acknowledgment on this document by replacing the field which pulls the name of the notarial officer in the acknowledgment, with a blank line along with the caption “(here insert name and title of the officer),” similar to the way the acknowledgment is formatted in Cal. Civ. Code § 1189(a)(1).
These changes will be effective immediately and will be available October 23, 2014. If you have any questions or concerns about these change, please contact Client Support at 1.800.497.3584.
October 22, 2014