Compliance News
In First American's Compliance News Archive you will find easy access to our library of GSE announcements, court findings, legislative changes, specific changes to state requirements, governmental guidance on issues that directly affect the mortgage document industry and more.April 2007
Mississippi
House Bill 921 (effective March 28, 2007)
The requirement for a conveyance or an encumbrance upon homestead property to be signed by the spouse of the owner, if the owner is married and living with the spouse, has been expanded to allow for an attorney in fact for the spouse to execute such instruments.Nebraska
Legislative Bill 124 (effective March 19, 2007)
Loan brokers must include a telephone number, and electronic mail and Internet
address, if any, on the loan broker’s application disclosure statement as well
as the loan brokerage agreement.
Texas
House Bill 2061 (effective March 28, 2007)
House Bill 2061 (“HB 2061”) was signed into law on March 28th in response to a
recent Attorney General opinion (“GA-0519”), which deemed the Social Security
number of a living person confidential and subject to mandatory exception from
required disclosure under section 552.147(a) of the Public Information Act. HB
2061 counteracts GA-0519 and permits county clerks to release recorded documents
without redacting social security numbers or verifying that the documents do not
contain Social Security numbers.
Additionally, HB 2061 prohibits the inclusion of an individual’s Social Security number on a document that is presented to the county clerk’s office for recording and requires a notice to appear at the top of the first page of any instrument that transfers an interest in real property. This notice, entitled “Notice of Confidentiality Rights”, must be in 12-point boldfaced or uppercase letters and read substantially as follows:
NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OR ALL OF THE FOLOWING INFORMATION FROM ANY INSTRUMENT THAT TRANSFERS AN INTEREST IN REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER’S LICENSE NUMBER.
The county clerk may not, under any circumstance, reject an instrument presented for recording solely because it fails to comply and the validity of any instrument is not affected by the failure to include the required notice. First American Nationwide Documents is in the process of revising our various Texas instruments affected by this law.
Freddie Mac Bulletin (March 1, 2007)
Freddie Mac is announcing changes to their temporary selling and servicing requirements for mortgages affected by Hurricanes Katrina and Rita that are secured by properties located in “eligible Disaster Areas”. Eligible Disaster Areas are those areas which have been declared by the President of the United States to be Major Disaster Areas where federal aid in the form of individual assistance was made available. The Federal Emergency Management Agency (FEMA) identifies these counties or municipalities on its Web site.HUD Mortgagee Letter 2007-04 (March 22, 2007)
HUD has determined that the FHA Mortgage Assistance Initiative and temporary special loan modification authorities announced in Mortgagee Letter 2005-46, dated December 1, 2005, are still needed to assist homeowners with FHA-insured loans who are unable to maintain mortgage obligations due to hurricane related home damage, curtailment of income or increased living expenses in the areas that FEMA has declared eligible for individual disaster assistance. These special loss mitigation tools were scheduled to expire June 1, 2007. The Department is extending authority for use of these special assistance measures for eligible borrowers through August 31, 2007.Guidance on Nontraditional Mortgage Products
Louisiana: (effective March 16, 2007)
Utah: (effective March 15, 2007)
Louisiana and Utah recently adopted guidelines for nontraditional mortgage products, based on the federal interagency guidance issued in September of 2006.As previously addressed in our December 29, 2006 Legislative Update, the federal Interagency Guidance on Nontraditional Mortgage Products clarifies how institutions can offer nontraditional mortgage products in a safe and sound manner that clearly discloses the risks a borrower may assume, by addressing three primary areas: loans terms and underwriting standards; portfolio and risk management practices and consumer protection issues.
To date, twenty-seven states and the District of Columbia have adopted a variation of the federal guidance: CT, GA, HI, ID, IN, IA, KY, LA, MA, MI, MN, MS, MO, MT, NH, NJ, NC, ND, OH, OR, RI, SD, TX, UT, VT, WA, WY.