01.02.19   •   Document Updates

Product Updates: New Support for Cooperatives in Alaska, Illinois, Indiana, Massachusetts, Michigan, Minnesota, New Jersey, and Pennsylvania

As a part of our efforts (see here and here) to expand the scope of our support for loans secured by a borrower’s ownership shares and lease in a cooperative unit (“cooperative loans”), we are pleased to announced that we will be rolling out support for these types of loans in Alaska, Illinois, Indiana, Massachusetts, Michigan, Minnesota, New Jersey, and Pennsylvania.

Background

Docutech is in the process of improving cooperative loan support for the sixteen states which the Federal National Mortgage Association (“FNMA”) lists in their “Co-Op Share Loan Documentation Requirements” (available directly at: https://www.fanniemae.com/content/eligibility_information/coop-share-loan-documentation-requirements.pdf). Our support is limited to cooperative loans which FNMA will purchase, the features of which are that they are conventional, first lien loans secured by a lease in a cooperative unit which is the borrower’s primary or secondary residence (see https://www.fanniemae.com/content/guide/selling/b4/2.3/03.html). We will be providing several of the documents listed in FNMA’s requirements, as detailed below.

The nature of a cooperative loan will vary based on whether state law considers such loans to be secured by real or personal property. Basically, if state law considers the loan to be secured by real property, generally the lease can be secured by a mortgage or deed of trust, similar to the way real property is secured. If state law considers them to be secured by personal property, the shares and lease are basically secured by a “loan security agreement” and a UCC-1 is filed for record.

Based on consultations with outside counsel, it has been determined that cooperative loans are to be treated as being secured by real property in the states of Alaska, Illinois, Indiana, Massachusetts, Michigan, New Jersey, and Pennsylvania. As a result, we will continue to provide FNMA’s uniform notes and security instruments for these jurisdictions, without any additional changes to the documents themselves (albeit the security instruments will be modified via our “Cooperative Rider” [Cx22760]).

Also based on feedback from outside counsel, cooperative loans in Minnesota may be treated as either secured solely by real property or solely by personal property, due to Minn. Stat. Ann. § 515B.1-105 which stipulates the following (cited in relevant part):

“(a) In a cooperative:

(1) The unit owners’ interest in units and their allocated interests are wholly personal property, unless the declaration provides that the interest are wholly real estate. . . .”

In addition, Washington treats cooperatives in a similar manner under Wash. Rev. Code Ann. § 64.90.020(1), where an owner’s interest in a cooperative unit is an interest in personal property, unless the cooperative association’s declaration provides otherwise.

As such, we will be setting up a special arrangement for Minnesota and Washington so that different documents will print in each state based on a new field (discussed below) which will be used to indicate the borrower’s interest in the cooperative. Please note that, based on feedback from outside counsel, we will continue to use FNMA’s uniform security instrument in Washington regardless of whether the borrower’s interests are considered interests in real or personal property.

New Documents

FNMA requires a lender to retain certain documents in their mortgage files in connection with cooperative loans. For Pennsylvania, this includes: “The co-op association as a party to the assignment for the purposes of acknowledging the transfer on the co-op association’s books, stating the amount of any unpaid assessments due and payable from the borrower at the time of the transfer (which amount must be zero) and stating that the transfer is permitted and not a ‘limited equity’ transfer.” (see “Co-Op Share Loan Documentation Requirements”, pg. 24 – 25)

Our outside counsel has advised that we should provide a new “Cooperative Consent to Security Instrument” (Cx22851) to meet this requirement. In this document, the cooperative association agrees to certain terms (e.g. that the association will not become a limited equity cooperative association) and certifies certain facts (e.g. that the borrower is not currently in default under the lease and is current with all association-related assessments).

This document will print under the following conditions:

  • Base Type = Conventional
  • Cooperative = Yes
  • Document Package Type = Closing
  • HELOC = No
  • Lien Position = FirstLien
  • Occupancy = PrimaryResidence
  • Occupancy = SecondHome
  • State Code = Pennsylvania

In addition to this document, we will be creating new UCC-1 and UCC-3 forms for Indiana, which will be based on the UCC forms available on the Indiana Secretary of State’s website (http://www.in.gov/sos/business/4051.htm). These forms will be formatted in similar fashion to the UCC forms we modified and created in our previous batch of cooperative changes. They will print under the following conditions:

  • IN UCC-1 Financing Statement (Cx22852)
    • Base Type = Conventional
    • Cooperative = Yes
    • Document Package Type = Closing
    • HELOC = No
    • Lien Position = FirstLien
    • Occupancy = Primary Residence
    • Occupancy = Second Home
    • State Code = Indiana
  • IN UCC-3 Financing Statement (Cx22853)
    • Base Type = Conventional
    • Cooperative = Yes
    • Document Package Type = Closing
    • HELOC = No
    • Lien Position = FirstLien
    • MERS Assignment Type = Non-MERS
    • MERS Assignment Type = To
    • Occupancy = Primary Residence
    • Occupancy = Second Home
    • Print Regular To MERS/Non-MERS Assignments = Yes
    • State Code = Indiana
  • IN UCC-3 Financing Statement from MERS (Cx22858)
    • Base Type = Conventional
    • Cooperative = Yes
    • Document Package Type = Closing
    • HELOC = No
    • Lien Position = FirstLien
    • MERS Assignment Type = From
    • Occupancy = Primary Residence
    • Occupancy = Second Home
    • Print From MERS Assignments = Yes
    • State Code = Indiana

New Fields

As mentioned above, in Minnesota and Washington an owner’s interest in a cooperative unit could be considered an interest in either personal or real property. Different documents (and, sometimes, different text) will need to be used dependent upon this fact.

For example, if the interests are treated as personal property in Minnesota, a loan security agreement should be used in lieu of a mortgage/deed of trust and a financing statement (UCC-1) should be filed to secure the transaction. Alternatively, if the interests are treated as real property in Minnesota, the typical mortgage/deed of trust documents should be used (along with cooperative-specific documents, such as our “Cooperative Rider”).

To support these alternatives, we have created a new field entitled “Co-op is Real Property or Personal Property” (FI 123528), with the options “Real Property” and “Personal Property”. This field will be used to trigger the right documents under the right circumstances for these two states.

In addition to this, we have created a new field entitled “Cooperative Ownership Type” (FI 131634). There are a variety of ways a cooperative organization can be structured and can issue different instruments representing an owner’s interest in the organization (e.g. stocks, membership certificates, etc.). Since some of the language in our documents may not be applicable to some cooperative organization types (e.g. referencing a “stock power” when no stocks are issued), FI 131634 will be used to trigger the appropriate language with the options “Stock” and “No Stock” (with the former being set by default if the field is not otherwise set).

Content Changes to Documents

A cooperative organization can be structured many ways under various state laws, including as a for-profit corporation, a non-profit corporation, a limited-liability company, a membership association, or even as a land trust. Based on the organization’s structure, different instruments may be issued to borrowers evidencing their ownership interest in the association (e.g. a corporation may issue stocks, while a non-profit corporation may issue membership certificates instead).

Also, the type of agreement used by a cooperative organization granting a borrower a possessory interest in one of the association’s units may vary state-to-state and organization-to-organization. While a proprietary lease is commonly used, there are other types of agreements, including an occupancy agreement, a “Contract of Perpetual Occupancy of Dwelling Unit”, etc.

While the language in our cooperative documents are flexible enough to cover these different types of documents, we will be making references to these documents more flexible to mitigate any ambiguities. In general, the proper noun “Shares” in our documents will refer to “stock(s), share(s), membership certificate(s), and/or other similar instruments”, while the proper noun “Lease” will refer to the “proprietary lease, occupancy agreement, and/or other similar agreement”. These broad references are based on similar language used by FNMA to describe these types of documents (see FNMA 2018 Selling Guide B4-2.3-03).

This and other additional changes will be made to the following documents:

  • Acceptance of Assignment and Assumption of Lease – COOP (Cx4984). No additional changes.
  • Affidavit of No Further Encumbrances (Cx4989). No additional changes.
  • Assignment of Lease – COOP (Cx4982). Fixing one minor typographical error.
  • Assignment of Security Agreement (Cx4988). Because Cx4988 will only print in states which treat cooperative loans as being secured by personal property and because Cx4988 makes reference to an “assignment of lease” which may or may not be provided (our generic assignments of lease are available “upon request”), we will be effectively “masking” references to an “assignment of lease” within the document for all states except New York. Clients who request to have our generic assignments of lease assigned to their accounts for additional states should request to have these masked references added for those states as well, so that the appropriate references print on Cx4988.
  • Consent to Assignment of Proprietary Lease – COOP (Cx4983). We will be making certain references in this document – including the title – more generic, to accommodate the various structures of cooperative loans (g. changing the title to “Consent to Assignment of Lease”, changing “APARTMENT:” to “COOPERATIVE UNIT:”, “corporation” to “cooperative association or corporation”, etc.).
  • Cooperative Loan Recognition Agreement (Cx22776). Additional changes include:
    • Restructuring the first paragraph to remove references to “tenant-stockholders” and refer to the borrowers as simply “Borrower” (and changing other references in the document from “tenant-stockholder” to “Borrower”).
    • Removing “the State of” in the second paragraph, because cooperative associations may exist under the laws of the District of Columbia (and, technically, under the Commonwealths of Massachusetts, Pennsylvania, or Virginia).
    • Expanding references of “share loan holders” to “shareholders, stockholders, and/or members”.
  • Cooperative Rider (Cx22760). Additional changes include:
    • Replacing references to “proprietary lease” to the proper noun “Lease”.
    • Adding a clause to the end of Paragraph E, Clause (v), wherein the Borrower acknowledges that the Lender may withhold consent to any surrender, assignment, or other type of termination of the Lease.
    • Adding the following paragraph to the end of Paragraph E for Pennsylvania:

    “In addition, Borrower shall not (and Borrower acknowledges that Lender will not) consent to any conversion of: (i) the Co-Operative Association to a limited equity cooperative association; or (ii) the Co-Operative Project to a limited equity cooperative (as those terms are defined in the Pennsylvania Real Estate Cooperative Act, 68 Pa. C.S. Real and Personal Property Section 4101 et seq., as amended from time to time).”

    • Adding another paragraph to the end of Paragraph F for Alaska and Pennsylvania, substantially stating the following (there are slight differences in the text for each state):

    “This paragraph F is in addition to the remedies Lender has under Section 22 of the Security Instrument (including, without limitation, Lender’s right to foreclose the Security Instrument by judicial proceeding and sell the Property after a default), and Borrower acknowledges that it is Borrower’s intent under the Security Instrument to transfer to Lender or Lender’s successor in interest (as applicable) a possessory interest in the unit subject to the Lease referenced in paragraphs A above and H below, in the event of a foreclosure or a conveyance in lieu of foreclosure.”

    • Configuring Paragraph H (captioned “Pledge”) to not print for Minnesota and Pennsylvania. It will also not print for Washington when “Co-op is Real Property or Personal Property” (FI 123528) equals “Real Property”.
    • A new Paragraph captioned “Co-Operative Association Consent” will print for Pennsylvania (as Section J), which states the following:

    “The Co-Operative Association has consented to the Security Instrument and has entered into a Recognition Agreement with Borrower and Lender, pursuant to which the Co-Operative Association has agreed (inter alia) to continuously reflect Lender’s security interest in the Property in the Co-Operative Association’s and Co-Operative Project’s books and records. In addition to the arrangements in the Recognition Agreement, the Co-Operative Association has executed the accompanying Consent to Security Instrument (which is hereby incorporated into the Security Instrument by this reference), certifying that: (i) Borrower does not owe any past due rent, maintenance, assessments, or other charges to the Co-Operative Association; (ii) the Security Instrument is permitted under the terms of the Constituent Documents referenced in paragraph A above, and the execution and delivery of the Security Instrument to Lender by Borrower will not constitute a default by Borrower under the Constituent Documents referenced in paragraph A above; and (iii) the Co-Operative Association is not presently, and will not become, a limited equity cooperative association and the Co-Operative Project is not presently, and will not become, a limited equity cooperative (as those terms are defined in the Pennsylvania Real Estate Cooperative Act, as amended from time to time).”

  • Irrevocable Stock Power – COOP (Cx4986). Additional changes include the following:
    • Because some cooperative organizations issue instruments other than stocks to owners, we are using new field “Cooperative Ownership Type” (FI 131634) to trigger language throughout the document to change it from a stock power form to an “Irrevocable Assignment of Shares”. If FI 131634 equals “No Stock”, references to “stock” will be modified to refer to “Shares”, which are defined as “membership certificate(s) and/or similar instruments”.
  • Loan Security Agreement – COOP (Cx4987). Additional changes include:
    • References to a “stock power” will be changed to refer to an “assignment of Shares” when “Cooperative Ownership Type” (FI 131634) equals “No Stock”.
    • We will be adding the following clause to the end of the first sentence in Subsection 14A for Minnesota:

    “subject to Borrower’s right under Applicable Law to cure Borrower’s default and reinstate the loan before any such sale.”

    • Modifying the last clause of Subsection 14E for Minnesota:

    “Lender may proceed to enforce Lender’s rights under Applicable Law, including the selling of the Property under (and in accordance with) this Security Instrument.”

    • Changing the caption to Subsection 14G from “Redemption” to “Redemption; Reinstatement” for Minnesota. Also, changing the first sentence (to “Borrower has the right to redeem the Property or cure the Borrower’s default and reinstate the loan before the sale [etc.]”) and adding the following paragraphs (both for Minnesota):

    “To cure Borrower’s default and reinstate the loan, Borrower must fully pay all past due unaccelerated amounts owed under the Note and this Security Instrument, including without limitation any insurance premiums, past due taxes, accrued interest to date of payment, and Lender’s reasonable legal fees and costs to the fullest extent allowed by Applicable Law. Borrower may request from Lender the amount necessary to cure Borrower’s default and reinstate the loan, provided that Lender receives Borrower’s request at least three calendar days before the sale of the Property or acceptance by Lender of the Property for full satisfaction of the amounts Borrower owes. If Borrower mails to Lender the amount necessary to cure Borrower’s default and reinstate the loan, Borrower must do so using first class mail (or, at Borrower’s option, expedited next-day delivery), postage prepaid, at least three calendar days before the sale of the Property or acceptance by Lender of the Property for full satisfaction of the amounts Borrower owes.

    Upon such cure and reinstatement, the Note, this Security Instrument, and all obligations secured hereby shall remain fully effective as if no acceleration had occurred. However, Borrower’s right to cure and reinstate shall not apply if Lender accelerates pursuant to Section 18 below or because either of the following occurs without Lender’s prior written consent: (i) the Lease is canceled, surrendered, or terminated, or is assigned or sold (to anyone other than Lender); (ii) Borrower sublets the Unit or assigns (or sells) the Shares (to anyone other than Lender); (iii) Borrower makes or allows any conflicting security interest in (or conflicting claim or lien upon) the Lease or the Shares or any of the rights arising under or pursuant to the Lease or the Shares (including, without limitation, the right of exclusive occupancy and use of the Unit); or (iv) because any governmental authority or any court at the instance of any governmental authority took possession of, or assumed control over, any substantial part of the Shares.”

    • Modifying the Minnesota-version of this document to reference Minnesota’s version of the Uniform Commercial Code (Minn. Stat. Ann. §§ 336.9-601 through 336.9-628).
    • Including a new Subsection 25C for Minnesota, which states the following:

    “C. Waiver of Homestead. Borrower waives all right of homestead exemption in the Property.”

  • Multistate Assignment of Proprietary Lease (Cx22777). We are modifying the title of the document to “Assignment of Lease”, to make it more generic.
  • Notice of Assignment of Security Agreement – Managing Agent – COOP (Cx4991). Changing the reference of “President of the Cooperative Association” to “President of the Cooperative Association or Corporation”.
  • Stock Pledge Agreement (Cx22775). Changing the title of the document to “Pledge Agreement”, to make it more generic. Also, changing references to a “stock power” to an “assignment of Shares” when “Cooperative Ownership Type” (FI 131634) equals “No Stock”.

Configuration Changes to Documents

We will be making the following print configuration changes to our documents:

  • 3200 Note Fixed (Cx5). We will be adding the following to Print Condition 2, so this note will print for cooperatives in the following states:
    • State Code = Alaska
    • State Code = Illinois
    • State Code = Indiana
    • State Code = Massachusetts
    • State Code = Michigan
    • State Code = Minnesota
    • State Code = New Jersey
    • State Code = Pennsylvania
  • 3890 Rider Second Home (Cx35). We will be adding the following to Print Condition 2, so this rider will print for cooperatives in the following states:
    • State Code = Alaska
    • State Code = Illinois
    • State Code = Indiana
    • State Code = Massachusetts
    • State Code = Michigan
    • State Code = Minnesota
    • State Code = New Jersey
    • State Code = Pennsylvania
  • AK Deed of Trust (Cx308). We will be adding the following as a new Print Condition 2, so that this deed of trust will print for cooperative loans in Alaska:
    • Base Type = Conventional
    • Cooperative = Yes
    • Document Package Type = Closing
    • HELOC = No
    • Lien Position = FirstLien
    • Occupancy = PrimaryResidence
    • Occupancy = Second Home
    • State Code = Alaska
  • IL Mortgage (Cx323). We will be adding the following as a new Print Condition 2, so that this mortgage will print for cooperative loans in Illinois:
    • Base Type = Conventional
    • Cooperative = Yes
    • Document Package Type = Closing
    • HELOC = No
    • Lien Position = FirstLien
    • Occupancy = Primary Residence
    • Occupancy = Second Home
    • State Code = Illinois
  • IN Mortgage (Cx324). We will be adding the following as a new Print Condition 2, so that this mortgage will print for cooperative loans in Indiana:
    • Base Type = Conventional
    • Cooperative = Yes
    • Document Package Type = Closing
    • HELOC = No
    • Lien Position = FirstLien
    • Occupancy = Primary Residence
    • Occupancy = Second Home
    • State Code = Indiana
  • MA Mortgage (Cx328). We will be adding the following as a new Print Condition 2, so that this mortgage will print for cooperative loans in Massachusetts:
    • Base Type = Conventional
    • Cooperative = Yes
    • Document Package Type = Closing
    • HELOC = No
    • Lien Position = FirstLien
    • Occupancy = Primary Residence
    • Occupancy = Second Home
    • State Code = Massachusetts
  • MI Mortgage (Cx331). We will be adding the following as a new Print Condition 2, so that this mortgage will print for cooperative loans in Michigan:
    • Base Type = Conventional
    • Cooperative = Yes
    • Document Package Type = Closing
    • HELOC = No
    • Lien Position = FirstLien
    • Occupancy = Primary Residence
    • Occupancy = Second Home
    • State Code = Michigan
  • MN Mortgage (Cx332). We will be adding the following as a new Print Condition 2, so that this mortgage will print for cooperative loans in Michigan, when the borrower’s interest in the cooperative unit is considered real property (a loan security agreement will print instead if it is considered personal property):
    • Base Type = Conventional
    • Cooperative = Yes
    • Co-op is Real Property or Personal Property = Real Property
    • Document Package Type = Closing
    • HELOC = No
    • Lien Position = FirstLien
    • Occupancy = Primary Residence
    • Occupancy = Second Home
    • State Code = Minnesota
  • NJ Mortgage (Cx340). We will be adding the following as a new Print Condition 2, so that this mortgage will print for cooperative loans in New Jersey:
    • Base Type = Conventional
    • Cooperative = Yes
    • Document Package Type = Closing
    • HELOC = No
    • Lien Position = FirstLien
    • Occupancy = Primary Residence
    • Occupancy = Second Home
    • State Code = New Jersey
  • PA Mortgage (Cx347). We will be adding the following as a new Print Condition 2, so that this mortgage will print for cooperative loans in Pennsylvania:
    • Base Type = Conventional
    • Cooperative = Yes
    • Document Package Type = Closing
    • HELOC = No
    • Lien Position = FirstLien
    • Occupancy = Primary Residence
    • Occupancy = Second Home
    • State Code = Pennsylvania
  • MN Assignment of Mortgage (Cx1533). We will be adding the following to Print Condition 1, to prevent this assignment of mortgage from printing in Minnesota when the borrower’s interest in the cooperative unit is considered personal property (since a loan security agreement – not a mortgage – will be used):
    • Cooperative = No

    We will be adding the following as a new Print Condition 2, so that this assignment will print when the borrower’s interest is considered real property (and a mortgage is used in the transaction):

    • Cooperative = Yes
    • Co-op is Real Property or Personal Property = Real Property
    • Document Package Type = Closing
    • MERS Assignment Type = Non-MERS
    • MERS Assignment Type = To
    • Print Regular To MERS/NON-MERS Assignments = Yes
    • State Code = Minnesota
  • Consent to Assignment of Proprietary Lease – COOP (Cx4983). We will be removing the following from Print Condition 1, since we will no longer support this document for the states where we support cooperative loans:
    • State Code = Alaska
    • State Code = Illinois
    • State Code = Indiana
    • State Code = Massachusetts
    • State Code = Michigan
    • State Code = Minnesota
    • State Code = New Jersey
    • State Code = Pennsylvania
  • Acceptance of Assignment and Assumption of Lease – COOP (Cx4984). We will be removing the following from Print Condition 1, since we will no longer support this document for the states where we support cooperative loans:
    • State Code = Alaska
    • State Code = Illinois
    • State Code = Indiana
    • State Code = Massachusetts
    • State Code = Michigan
    • State Code = Minnesota
    • State Code = New Jersey
    • State Code = Pennsylvania
  • Assignment of Security Agreement – COOP (Cx4988). We will be removing the following from Print Condition 1, since this document will not be part of our standard offering in the states where a mortgage or deed of trust is used:
    • State Code = Alaska
    • State Code = Illinois
    • State Code = Indiana
    • State Code = Massachusetts
    • State Code = Michigan
    • State Code = Minnesota
    • State Code = New Jersey
    • State Code = Pennsylvania

    We will be adding the following as new Print Condition 2, so this document will print in Minnesota when the borrower’s interests in the cooperative project are considered interests in personal property (and a loan security agreement will be used):

    • Base Type = Conventional
    • Cooperative = Yes
    • Co-op is Real Property or Personal Property = Personal Property
    • Document Package Type = Closing
    • HELOC = No
    • Lien Position = FirstLien
    • Occupancy = Primary Residence
    • Occupancy = Second Home
    • State Code = Minnesota
  • Cooperative Apartment Fixed Rate Note (Cx4992). We will be removing the following from Print Condition 1, since we will be providing FNMA’s uniform notes instead in the states where we support cooperative loans:
    • State Code = Alaska
    • State Code = Illinois
    • State Code = Indiana
    • State Code = Massachusetts
    • State Code = Michigan
    • State Code = Minnesota
    • State Code = New Jersey
    • State Code = Pennsylvania
  • MN Assignment from MERS (Cx4329). We will be adding the following to Print Condition 1, to prevent this assignment of mortgage from printing in Minnesota when the borrower’s interest in the cooperative unit is considered personal property (since a loan security agreement – not a mortgage – will be used):
    • Cooperative = No

    We will be adding the following as new Print Condition 2, so that this assignment will print when the borrower’s interest is considered real property (and a mortgage is used in the transaction):

    • Cooperative = Yes
    • Co-op is Real Property or Personal Property = Real Property
    • Document Package Type = Closing
    • MERS Assignment Type = From
    • MERS Assignment Type = None
    • MERS Assignment Type = To
    • Print From MERS Assignments = Yes
    • State Code = Minnesota
  • MN Assignment – INV BLANK (Cx4471). We will be adding the following to Print Condition 1, to prevent this assignment of mortgage from printing in Minnesota when the borrower’s interest in the cooperative unit is considered personal property (since a loan security agreement – not a mortgage – will be used):
    • Cooperative = No

    We will be adding the following as new Print Condition 2, so that this assignment will print when the borrower’s interest is considered real property (and a mortgage is used in the transaction):

    • Cooperative = Yes
    • Co-Op is Real Property or Personal Property = Real Property
    • Document Package Type = Closing
    • MERS = No
    • State Code = Minnesota
  • Assignment of Lease – COOP (Cx4982). We will be removing the following from Print Condition 1, since we will not be providing this document in our standard cooperative packages for most states (it may be assigned to the following states on an “upon request” basis):
    • State Code = Alaska
    • State Code = Illinois
    • State Code = Indiana
    • State Code = Massachusetts
    • State Code = Michigan
    • State Code = Minnesota
    • State Code = New Jersey
    • State Code = Pennsylvania
  • Loan Security Agreement – COOP (Cx4987). We will be removing the following from Print Condition 1, since we will be providing mortgages for cooperative loans in the following two states:
    • State Code = Illinois
    • State Code = New Jersey

    We will be adding the following as a new Print Condition 3, so that this document will print in Minnesota when the borrower’s interests in the cooperative unit are considered interests in personal property (a mortgage will print when such interests are considered real property):

    • Base Type = Conventional
    • Cooperative = Yes
    • Co-op is Real Property or Personal Property = Personal Property
    • Document Package Type = Closing
    • HELOC = No
    • Lien Position = FirstLien
    • Occupancy = Primary Residence
    • Occupancy = Second Home
    • State Code = Minnesota
  • UCC-1 Financing Statement (Cx7700). We will be adding the following to Print Condition 1, since this document is required by FNMA to be used in the following states:
    • State Code = Illinois
    • State Code = Massachusetts
    • State Code = Michigan
    • State Code = New Jersey

    We will be removing the following from Print Condition 1, since the UCC forms are only necessary in Washington if the borrower’s interests in the cooperative unit are considered interests in personal property:

    • State Code = Washington

    We will be adding the following as new Print Condition 2, so that the UCC-1 will print in Minnesota and Washington when the borrower’s interests are considered interests in personal property:

    • Co-op is Real Property or Personal Property = Personal Property
    • Cooperative = Yes
    • Document Package Type = Closing
    • Lien Position = FirstLien
    • Occupancy = Primary Residence
    • Occupancy = Second Home
    • State Code = Minnesota
    • State Code = Washington
  • UCC-3 Financing Statement (Cx22755). We will be adding the following to Print Condition 1, since this document is required by FNMA to be used in the following states:
    • State Code = Illinois
    • State Code = Massachusetts
    • State Code = Michigan
    • State Code = New Jersey

    We will be removing the following from Print Condition 1, since the UCC forms are only necessary in Washington if the borrower’s interest in the cooperative unit are considered interest in personal property:

    • State Code = Washington

    We will be adding the following as new Print Condition 2, so that the UCC-3 will print in Minnesota and Washington when the borrower’s interests are considered interests in personal property:

    • Co-op is Real Property or Personal Property = Personal Property
    • Cooperative = Yes
    • Document Package Type = Closing
    • Lien Position = FirstLien
    • MERS Assignment Type = Non-MERS
    • MERS Assignment Type = To
    • Occupancy = Primary Residence
    • Occupancy = Second Home
    • Print Regular To MERS/Non-MERS Assignments = Yes
    • State Code = Minnesota
    • State Code = Washington
  • Cooperative Rider (Cx22760). We will be adding the following to Print Condition 1, so that this rider will print in the states where a mortgage or deed of trust are used for cooperative loans:
    • State Code = Alaska
    • State Code = Illinois
    • State Code = Indiana
    • State Code = Massachusetts
    • State Code = Michigan
    • State Code = New Jersey
    • State Code = Pennsylvania

    We will be adding the following as new Print Condition 2, so that this rider will print in Minnesota when the borrower’s interests in the cooperative unit are considered interests in real property (and where a mortgage will be used):

    • Base Type = Conventional
    • Cooperative = Yes
    • Co-op is Real Property or Personal Property = Real Property
    • Document Package Type = Closing
    • HELOC = No
    • Lien Position = FirstLien
    • Occupancy = Primary Residence
    • Occupancy = Second Home
    • State Code = Minnesota
  • Cooperative Pledge Agreement (Cx22775). We will be adding the following to Print Condition 1, so that this document prints in the following states:
    • State Code = Alaska
    • State Code = Illinois
    • State Code = Indiana
    • State Code = Massachusetts
    • State Code = Michigan
    • State Code = New Jersey

    We will be removing the following from Print Condition 1, since the pledge agreement is only needed in Washington when the borrower’s interests in the cooperative unit are considered interests in personal property:

    • State Code = Washington

    We will be adding the following to Print Condition 2, so that the pledge agreement will print in Washington when the borrower’s interests are considered interests in personal property:

    • Base Type = Conventional
    • Cooperative = Yes
    • Co-op is Real Property or Personal Property = Personal Property
    • Document Package Type = Closing
    • HELOC = No
    • Lien Position = FirstLien
    • Occupancy = Primary Residence
    • Occupancy = Second Home
    • State Code = Washington
  • Multistate Loan Recognition Agreement (Cx22776). We will be adding the following to Print Condition 1, so that this document prints in all of the states we support cooperative loans in:
    • State Code = Alaska
    • State Code = Illinois
    • State Code = Indiana
    • State Code = Massachusetts
    • State Code = Michigan
    • State Code = Minnesota
    • State Code = New Jersey
    • State Code = Pennsylvania
  • Multistate Assignment of Proprietary Lease (Cx22777). We will be adding the following to Print Condition 1 for this “upon request” document, so that it prints in the following states:
    • State Code = Alaska
    • State Code = Illinois
    • State Code = Indiana
    • State Code = Massachusetts
    • State Code = Michigan
    • State Code = New Jersey
    • State Code = Pennsylvania

    We will also add the following as new Print Condition 2, so that this document prints in Minnesota when the borrower’s interests in the cooperative unit are considered interests in real property:

    • Base Type = Conventional
    • Cooperative = Yes
    • Co-op is Real Property or Personal Property = Real Property
    • Document Package Type = Closing
    • HELOC = No
    • Lien Position = FirstLien
    • Occupancy = Primary Residence
    • Occupancy Second Home
    • State Code = Minnesota

Riders

We will also be modifying the internal, text configurations for the following riders, to ensure that the appropriate changes made to these documents for our previous batch of cooperative states will be made for this second batch:

  • 3170 Rider 1-4 Family (Cx32)
  • 3890 Rider Second Home (Cx35)
  • 3198 Biweekly Rider (Cx19236)
  • 3199 Biweekly Rider Without Conversion (Cx19238)
  • Inter Vivos Revocable Trust Acknowledgment (Cx21130)
  • Inter Vivos Revocable Trust Rider (Cx21131)
  • HomeStyle Renovation Loan Investor Rider (Cx22292)
  • HomeStyle Renovation Loan Rider (Cx22294)

Recording Format

As we did for our first batch, we will format the following documents so that they can be recorded in Alaska, Illinois, Indiana, Massachusetts, Michigan, Minnesota, New Jersey, and Pennsylvania:

  • Assignment of Lease – COOP (Cx4982)
  • Multistate Cooperative Loan Recognition Agreement (Cx22776)
  • Multistate Assignment of Proprietary Lease (Cx22777)
  • Multistate Stock Pledge Agreement (Cx22775)

Also, we will be formatting the new “Cooperative Consent to Security Instrument” (Cx22851) so that it can be recorded in Pennsylvania.

Cooperative Matrix

We are in the process of creating a new “Cooperative Matrix” which summarizes which documents will print for cooperatives in our standard Closing packages. This Matrix is expected to be completed sometime in the beginning of 2019.

Effective Date

These changes and new documents will take effect (and become available) on January 8, 2019. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.

DRs 279710 and 279765