The issuance of Iowa Payment Reduction Fee disclosure (our Cx1906) is required by ICA § 353.8(5), which states in part:
“Prior to accepting an application for a loan which includes a payment reduction fee, the lender shall provide the potential borrower with a written disclosure describing in plain language the specific terms which the loan would have both with the payment reduction fee and without it. This disclosure shall include a good faith example showing the amount of the payment reduction fee and the reduction in payments which would result from the payment of this fee in a typical loan transaction. A payment reduction fee which complies with this subsection may be collected in connection with a loan in addition to the fees authorized by subsection 4.”
Previously, ICA § 535.8(6) referenced ICA §636.46 which made the IA Payment Reduction fee inapplicable to FHA and VA loans. However, § 535.8(6) has since been repealed, removing the reference to § 636.46. The IA Payment Reduction fee disclosure is now required by § 535.8(5) to be disclosed for FHA and VA loans.
Accordingly, Docutech will now print Cx1906 for all loan types including VA, FHA, and RD loans. All other print conditions/restrictions will remain the same.
This change will be effective on November 17th, 2016. Please direct questions or concerns to Client Support at 1.800.497.3584.