The “KS High LTV Consumer Notice” (Cx1595) discloses to the borrower that their loan has a high LTV ratio and suggests that the borrower considers credit counseling (Kan. U.C.C. Ann. §16a-3-207[3[[b] & ). This notice is required to be given three days before closing when the loan is subject to the KS UCCC, and based on the appraisal of the secured property, the LTV is greater than 100%.
The KS UCCC applies to “consumer credit transactions” made in the state of Kansas (Kan. Stat. Ann. § 16a-1-201). The term “consumer credit transactions” includes the defined term “consumer loan” (Kan. Stat. Ann. § 16a-1-301). The definition of “consumer loan” found in Kan. Stat. Ann. § 16a-1-301(17) does not include first liens unless:
- The LTV ratio of the loan at the time when made exceeds 100%.
- The loan is not a HELOC, Purchase, or New Construction, is secured by the consumer’s principal residence, and the annual percentage rate (APR) exceeds 12%; or
- If agreed to by written agreement.
The law in subsection (28) defines “Loan-to-value ratio” as a fraction expressed as a percentage:
(a) The numerator of which is the aggregate unpaid principal balance of all loans secured by a first mortgage or a second mortgage encumbering the real estate at such time; and
(b) the denominator of which is the appraised value of the real estate.
Loan to Value Based on Loan Amount, Plus Second Loan Amount and Appraised Value (FI 149440) is calculated by dividing the sum of the first and second lien loan amounts by the appraised value, which triggers our document KS UCCC Addendum (Cx4448) to print by default when the LTV is over 100%.
We are updating the field triggers for our document Kansas High LTV Consumer (Cx1595) to more closely align with the statue described above. The following reflects the changes that will be made:
- Field 52232 is being renamed from “CLTV/LTV is greater than 100%?” to: “Kansas Loan to Value Based on Loan Amount, Plus Second Loan Amount and Appraised Value is Greater Than 100%”,
- Changing “Yes” global standard value mapping on Field 52232 to “Yes” if: “Loan to Value Based on Loan Amount Plus Second Loan Amount and Appraised Value (FI 149440) Is Greater Than 100”,
- Changing “No” global standard value mapping on field 52232 to “No” if: “Loan to Value Based on Loan Amount Plus Second Loan Amount and Appraised Value (FI 149440) Is Less Than or Equal to 100”.
These changes will be in effect on February 22, 2023. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.