Pursuant to our yearly audit of state-specific disclosures, we will be creating two new documents for loans secured by property in Rhode Island and making minor textual edits to nine others.
RI Commitment Agreement (Cx19062)
R.I. Gen. Laws § 27-29-4(9)(iii) prohibits the following (in relevant part):
“No person who lends money or extends credit may:
(A) Solicit insurance for the protection of real property after a person indicates interest in securing a first mortgage credit extension until that person has received a commitment in writing from the lender as to a loan or credit extension.”
We will be providing Cx19062 to allow lenders who solicit insurance to do so in compliance with this provision of law. This document will be available “upon request” and, once requested, will print under the following conditions:
- Document Package Type = Initial Disclosure
- Lender is a Broker? = No
- Lien Position = First Lien
- Mortgage Loan Commitment = Yes
- State Code = Rhode Island
The content of the document will be similar to other commitment agreements we have created for other states over the past year.
RI Open-End Credit Plan Disclosure (Cx19063)
R.I. Gen. Laws An. § 6-27-11 requires certain disclosures to be made “in the case of any open-end consumer credit plan secured by a consumer’s principal residence.” Many of the disclosures are provided in HELOC agreements and security instruments; however, Rhode Island law requires that these particular disclosures need to be provided “to the consumer on a separate document on or before the closing date.”
To comply with this provision, we will be providing Cx19063. The document discloses how much the APR on the loan is and how it is calculated, the maximum payment possible under the loan agreement, a disclosure that because the loan is secured by the borrower’s dwelling there is a risk that the borrower may lose his home, that the creditor has the right to change the terms of the plan, a warning about interest-only payments, and an itemized list of fees which will be charged.
These disclosures are primarily comprised of “hard coded” text, which are based on the terms of our widely available Rhode Island HELOC Agreement and Deed of Trust (Cx1324 and Cx3064, respectively). However, because our clientele have widely varying custom HELOC documents and programs, Cx19063 will print “upon request.” Should a client request this document, they will be required to contact their Account Manager to make sure that the fields and text of the document will accurately reflect the terms of their particular programs, before it will be configured to print for them.
Once configured to print, it will, by default, print under the following conditions:
- Document Package Type = Closing
- HELOC = Yes
- Occupancy = Primary Residence
- State Code = Rhode Island
Other Document Edits
We will be making minor textual edits to the following documents, for grammatical, punctuation, or spelling purpose, to improve the format of citations, and/or improve the format of the documents:
- RI Notification to Buyers of Withholding Tax Requirement (Cx1028)
- Anti-Coercion Insurance Disclosure (Cx3750), Rhode Island-version
- RI Addendum to Uniform Residential Loan Application (Cx5103)
- RI Prohibited Acts of Lenders and Loan Brokers (Cx11241)
- RI Tangible Net Benefit (Cx11242)
- RI High Cost Related Prohibited Acts of Lenders and Loan Brokers (Cx11408)
- RI Home Loan Protection Act Disclosure (Cx12089)
- RI Form 4 HLPA (Cx12090)
- Addendum to Statement of Credit Denial, Termination, or Change (Cx15905)
The one exception is to Cx15905. This document informs the borrower that they have a right to request a copy of the appraisal report created in connection with their loan (pursuant to R.I. Gen. Laws Ann. § 19-9-3[b]). We will be adding a disclaimer under this disclosure which informs the borrower that they will be automatically receiving a copy of the report, if their loan is subject to certain provisions under Regulations B or Z.
These changes will take effect, and the new documents will be available, on November 4, 2014. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.
October 27, 2014
DR 159628 and 159629