Pursuant to our audit of state-specific disclosures, we will be making the following modifications to our documents provided for loans secured by property located in South Dakota:
SD Mortgage Broker Agreement (Cx19356)
This new document is being provided pursuant to the provisions of S.D. Admin. R. 20:69:08:09 – 12, which basically stipulates that a real estate broker (which can include a mortgage broker; see S.D. Codified Laws § 36-21A-6) must enter into a contract with a potential borrower which discloses certain terms and conditions of the loan transaction the borrower has applied for, including the amounts and charges associated with the broker’s services.
Cx19356 is split into different sections to cover each of the disclosure requirements. The first section specifies the services provided by the broker, the second outlines a summary of the loan’s terms (such as the fees expected to paid in connection with the loan), the third contains general information about the loan (e.g. the interest rate of the loan, when payments are due, etc.), and the fourth contains a list of costs which will be collected by the broker is no loan is found for the borrower.
This document will be configured to print under the following circumstances:
- Document Package Type = Initial Disclosures
- Lender is a Broker? = Yes
- State Code = South Dakota
We will be expanding the disclosures in our South Dakota-specific version of our “Anti-Coercion Insurance Disclosure” (Cx2778) to include disclosures applicable to credit insurance, due to the “anti-coercion” provisions of S.D. Codified Laws § 58-19-5. A new paragraph (and citation) will appear if credit insurance will be required in connection with the loan. The paragraph is as follows:
“If credit life or credit health insurance is required, you may, upon request to the creditor, have the option of furnishing this insurance through existing policies owned or controlled by you or you may procure and furnish the required coverage through any insurer authorized to transact insurance business within South Dakota.”
We will also be modifying our quasi-standard “HELOC Agreement – SD” (Cx3029) to include a new Section 19, pursuant to the provisions of Ibid. §§ 54-4-58 & 58-19-40. The former of these statutes requires a number of disclosures to be included in a contract for an open-end loan (including contact information for the South Dakota Division of Banking, where an improprieties may be reported), while the latter requires a specific disclosure concerning the fact that credit unemployment insurance may be offered (but not required) to also appear in the loan agreement for open-end credit.
These changes will take effect on November 19, 2015. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.