May 23, 2023
Product Spotlight: HELOCs, PPDocs Released Updated FHA Instruments on May 1 and more!
Read more below!
Product Spotlight: HELOCs!
Did you know we can document HELOCs in all states other than New York? And we are subject matter experts on the legal requirements for originating and documenting Texas 50(a)(6) HELOC loans!
We can provide you with a compliant document set for a HELOC with a fixed or variable rate interest-only draw period followed by either 1) a balloon payment (for properties outside of Texas) or 2) a fixed or variable rate fully amortizing repayment period.
We have created a guide to help you get started ordering HELOCs on our platform: Guide
Have an interest in other products that we offer?
- Interest Only
- ARMs
- Home Improvement
- Modifications
- Assumptions
- Non-QM
- Business Purpose Loans
Contact Client Relations at cr@ppdocs.com to learn more.
PPDocs Released Updated FHA Instruments on May 1
On January 20, 2023, HUD issued Mortgagee Letter 2023-01, announcing FHA-specific modifications to the new Fannie Mae/Freddie Mac Uniform Instruments published in 2021. Prior to Mortgagee Letter 2023-01, the most recent HUD instructions for FHA instruments were issued in 2015. With the publication of the new FNMA/FHLMC Uniform Instruments in 2021, however, the 2015 HUD instructions were no longer current. HUD has now rectified this by issuing instructions for required modifications to the new Uniform Instruments for FHA loans.
We finished creating FHA-compliant versions of the new FNMA/FHLMC Uniform Instruments which incorporate the amendments required by HUD for use with the FHA forward-mortgage program. These include FHA Multistate and state-specific notes, and both MERS and non-MERS security instruments for each state. We began filtering the new versions of the FHA forms into FHA document packages prepared through PPDocs on May 1, 2023.
PPDocs encourages our clients to notify us if they or their secondary market investors have any issues with accepting the new versions of the FHA instruments. Please email legal@ppdocs.com with any concerns.
Frequently Asked Question
Question: May we charge a late fee on a consumer purpose HELOC in Texas? If so, how much and when?
Answer: Yes, you may charge a late fee on a Texas HELOC.
If a lender opts out of Texas Finance Code Chapter 346 on a consumer purpose HELOC, then after the 10th day of the delinquency:
- A first lien HELOC may provide for a late fee of the greater of 5% of the installment due or $7.50. (Insured depository institutions should check internally and/or with their institution’s regulatory counsel to determine whether the institution may avail itself of the preemption of state late fee laws on first lien HELOCs found in the Depository Institutions Deregulation and Monetary Control Act (DIDMCA). If preemption applies, the state law late fee limitation is not applicable.)
- A subordinate lien HELOC with an interest rate that does not exceed 10% may provide for a late fee of the greater of 5% of the installment due or $7.50.
- A subordinate lien HELOC that has an interest rate greater than 10% may provide for a late fee of 5% of the installment due.
Our recommendation: We recommend our clients forgo the $7.50 minimum and charge no more than 5% of the installment due after the 10th day of delinquency without a minimum.