Document Updates and Retirements: Massachusetts HCL Disclosures on URLA (Cx4193 & Cx20667), MA High Cost Loan Application Disclosure (Cx3742), & MA High Cost Loan Payment Disclosure (Cx3746)

Formerly under Mass. Regs. Code tit. 209, §§ 32.32(3)(f)(1) & 40.04(6)(a), the following was required:

“The following statement must appear in at least 12 point type directly above the borrower’s signature line on the application: ‘The loan which will be offered to you is not necessarily the least expensive loan available to you and you are advised to shop around to determine competitive interest rates, points, and other fees and charges.’ In the event that the lender does not know whether the borrower’s application is a high cost home loan application, such disclosure must be made as soon as the lender determines that it is a high cost home loan application, but in any event, no later than 24 hours after such determination is made.”

We included this statement in our generic copies of FNMA Form 1003\FHLMC Form 65 (Cx4193 and Cx20667), as well in “MA High Cost Loan Application Disclosure” (Cx3742). In addition this requirement, we provided “MA High Cost Loan Payment Disclosure” (Cx3746) for Ibid. § 40.04(6)(b), which formerly required the following:

“At or prior to taking an application, a lender must also deliver, place in the mail, fax or electronically transmit to the borrower a statement in substantially the following form: ‘Although your aggregate monthly debt payment may decrease, the high cost home loan may increase both:

1. your aggregate number of monthly debt payments; and
2. the aggregate amount paid by you over the term of the high cost home loan if such are likely the case.’

The disclosure in 209 CMR 40.04(6)(b) may be combined with disclosures under M.G.L. c. 184, § 17D. In the event that the lender does not know whether the borrower’s application is a high cost home loan application, such disclosure must be made as soon as the lender determines that it is a high cost home loan application, but in any event, no later than 24 hours after such determination is made.”

Both of these requirements have been repealed (see 2016 Mass. Reg. 1314 [Jun. 3, 2016] and 2015 Mass. Regs. 1277 [Jan. 2, 2015]) and have not been substantively replaced. Therefore, we will be retiring Cx3742 and Cx3746 as generic documents, as well as removing from Cx4193 and Cx20667 the disclosure which normally appears just before the signature lines for Massachusetts high-cost loans.

These changes will take effect on July 17, 2020. Questions or concerns about these changes should be directed to Client Support at 1.800.497.3584.

DR 320472