12.21.22   •   Document Updates

Document Updates: Vermont High Rate/High Point Notices (Cx3708) Continues to Be Temporarily Suspended

As previously announced, on May 5, 2022, Acting Commissioner of Financial Regulation David F. Provost signed an Order In Re: High Rate Mortgage Loan Disclosure which temporarily suspended until December 31, 2022 the disclosure requirements pursuant to Regulation B-98-2 (Vt. Admin. Code 4-2-6) and Vt. Stat. Ann. Tit. 9 § 104.

On December 15, 2022, Commissioner of Financial Regulation Kevin J. Gaffney signed a subsequent Order In Re: High Rate Mortgage Loan Disclosure which continues to temporarily suspend until June 30, 2023 the disclosure requirements pursuant to Regulation B-98-2 (Vt. Admin. Code 4-2-6) and Vt. Stat. Ann. Tit. 9 § 104.

The Findings in the subsequent Order In Re: High Rate Mortgage Loan Disclosure state:

    1. On November 1, 2022, the Commissioner of Taxes established the rate pursuant to 32 V.S.A. § 3108 at 3.96% (the “2022 Declared Rate”), which is the average prime loan rate charged by banks (as determined by the Board of Governors of the Federal Reserve System) for the 12-month period beginning October 1, 2021 and ending September 30, 2022.
    2. Based on the 2022 Declared Rate, the Disclosure requirements for High Rate Mortgage Loans are triggered by any first lien mortgage loan offered in 2022 having an interest rate in excess of 6.96% (the “2022 Disclosure Threshold”).
    3. When the Commissioner of Taxes set the Declared Rate at 3.96% on November 1, 2022, the 30-Year Fixed Rate Conforming Mortgage Index rate was 7.053%, a rate far in excess of the Declared Rate.
    4. As of December 1, 2022 the 30-Year Fixed Rate Conforming Mortgage Index rate was 6.390%, a rate that remained far higher than the Declared Rate.
    5. Based on the prevailing mortgage rates, it is highly probable that during the next six months the interest rates on Market Rate Mortgage Loans will exceed the 2023 Disclosure Threshold.
    6. The Disclosure is not intended for prospective borrowers of Market Rate Mortgage Loans.
    7. Providing prospective borrowers of Market Rate Mortgage Loans with the Disclosure, notifying them that they may be eligible for a loan with a lower interest rate from another lender, may confuse and mislead such borrowers.
    8. The Commission previously ordered the suspension of disclosure requirements of Regulation B-98-2 for High Rate Mortgage Loans from May 5, 2022 through December 31, 2022.
    9. The Commissioner finds that extending the temporary suspension of the disclosure requirements of Regulation B-98-2 for High Rate Mortgage Loans until July 1, 2023 to be in the best interests of the public.

The Vermont High Rate/High Point Notices disclosure (Cx3708) will continue to be temporarily suspended from printing generically until such time that Vermont’s Department of Financial Regulation determines otherwise.

At this time, the Vermont High Rate/High Point Notices disclosure (Cx3708) will only print for clients who have custom configurations in place for this document. Docutech encourages its customers to reach out to their own legal counsel to verify whether or not the Vermont High Rate/High Point Notices disclosure (Cx3708) should continue to be included in their first lien mortgage loan initial disclosure packages.

If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.

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The preceding is for informational purposes only and is not and may not be construed as legal advice. No third-party entity may rely upon anything contained herein when making legal and/or other determinations regarding its practices, and such third party should consult with an attorney prior to embarking upon any specific course of action.