Earlier this month, we announced plans for modifying our data integrity checks and Form Cx41 (“Informed Consumer Choice Disclosure Notice”) to comply with guidance from HUD which would have lowered annual mortgage insurance premiums for FHA-insured loans closing or disbursing on or after January 27, 2017 (see our announcement here).
Today, HUD announced that this rule is “suspended indefinitely”; thus mortgage insurance premiums will continue to be charged at the rates currently imposed. HUD also states that they will “issue a subsequent Mortgagee Letter at a later date should this policy change.” (see FHA ML 2017-07)
As a result of this announcement, we will be revamping our FHA MIP Data Integrity checks to display a Warning if the Closing Date or Disbursement Date are on or after January 27, 2017, and the current (higher) rates are not being sent. If the Closing Date and Disbursement Date are before January 27, 2017, the old Data Integrity checks will continue to employ a “full stop” Error like they did prior to the announcement of the lowered rates and our associated Data Integrity check modifications. Until these changes are in place, in order to use the accurate effective MIP rates on loans closed or disbursed on or after January 27, 2017, clients will have to ignore and bypass the now inaccurate Warning.
We will also be revising our Informed Consumer Choice Disclosure Notice (Cx41) to reflect the correct amounts.
Clients who have issued disclosures reflecting the decreased premiums may wish to consult with their own legal counsel and internal compliance departments about the proper course of action to take in rectifying these disclosures. Some Federal laws permit re-disclosures when a valid “change of circumstance” occurs (e.g., see 12 CFR §§ 1026.17[e] & [f] and 1026.19[e][iv]). Other statutory or regulatory solutions may be permitted depending on State, GSE, Federal agency, or investor.
These changes will be in effect on January 24, 2017, to allow for testing prior to implementation. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.
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