December 20, 2022

Happy Holidays from PPDocs, End-of-Year Schedule, PPDocs 2023 Rescission Calendar and more!

Happy Holidays and Thank You!

As another challenging year comes to a close, we are thankful and grateful for your business and loyalty. It has been our joy and privilege to serve you during this time, and we look forward to working with you in 2023. We wish you Merry Christmas, Happy Holidays, and a Prosperous New Year.

With Sincere Appreciation,

Mike Patterson and the PPDocs staff

PPDocs End-of-Year Schedule

In observance of the upcoming Christmas and New Year’s holidays, we will close our office at 12:00 PM CST on December 26, 2022, and January 2, 2023.

PPDocs 2023 Calendar

In 2023, we will close our office on:

Memorial Day (Monday, May 29)
Independence Day (Tuesday, July 4)
Labor Day (Monday, September 4)
Thanksgiving Day (Thursday, November 23)
Christmas Day (Monday, December 25)

We will notify clients in advance if this schedule changes.

PPDocs 2023 Rescission Calendar

Our 2023 Rescission Calendar is now available on our website.

Reminder: 2023 Threshold for Smaller Loan Exemption Appraisal Requirements for HPMLs

On October 13, 2022, the CFPB, the Fed, and the OCC announced that the 2023 threshold for exempting loans from special appraisal requirements for higher-priced mortgage loans will increase from $28,500 to $31,000.

The threshold amount will be effective January 1, 2023, and is based on the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers, known as CPI-W, as of June 1, 2022.

The Dodd–Frank Act added special appraisal requirements for higher-priced mortgage loans, including that creditors obtain a written appraisal based on a physical visit to the interior of the home before making a higher-priced mortgage loan. The rules implementing these requirements contain an exemption for loans of $25,000 or less, adjusted annually to reflect CPI-W increases.

Annual FNMA Conforming Loan Limit Values

The Federal Housing Finance Agency (FHFA) publishes annual conforming loan limit values that apply to all conventional loans delivered to Fannie Mae. These include baseline and high-cost area loan limits; high-cost areas vary by geographic location. The conforming loan limits for 2023 have increased and apply to loans delivered to Fannie Mae in 2023 (even if originated prior to 1/1/2023).

Refer to Lender Letter LL-2022-06 for specific requirements.

CFPB Blog: Changes to HMDA’s Closed-end Loan Reporting Threshold

Here is the text of the December 6, 2022, blog:

On September 23, 2022, the United States District Court for the District of Columbia issued an order vacating the 2020 Home Mortgage Disclosure Act (HMDA) Final Rule as to the loan volume reporting threshold for closed-end mortgage loans. The decision means that the threshold for reporting data on closed-end mortgage loans is now 25 loans in each of the two preceding calendar years, which is the threshold established by the 2015 HMDA Final Rule, rather than the 100-loan threshold set by the 2020 HMDA Final Rule.

The CFPB recognizes that financial institutions affected by this change may need time to implement or adjust policies, procedures, systems, and operations to come into compliance with their reporting obligations. In these limited circumstances, in allocating the CFPB’s enforcement and supervisory resources, the CFPB does not view action regarding these institutions’ HMDA data as a priority. Thus, the CFPB does not intend to initiate enforcement actions or cite HMDA violations for failures to report closed-end mortgage loan data collected in 2022, 2021, or 2020 for institutions subject to the CFPB’s enforcement or supervisory jurisdiction that meet Regulation C’s other coverage requirements and originated at least 25 closed-end mortgage loans in each of the two preceding calendar years but fewer than 100 closed-end mortgage loans in either or both of the two preceding calendar years.

Note: The CFPB submitted this amendment for publication in the Federal Register, but it is not published yet. You can find it by clicking here.

Frequently Asked Question

Question: As I was completing early disclosures for a loan that we will be modifying to add an ARM feature into the permanent phase, I received an audit warning that a TRID loan may not be backdated. The current loan matures tomorrow and the date I entered for disclosing the LE causes the system to say that I cannot close the modification until a specific date next week. What do I need to do?

Answer:When the first change date is within 60 months of the first payment due date, the maximum rate at the first change date is used to calculate the APR for QM purposes. In order to avoid this issue, the initial rate period before the first rate change can be extended to at least 61 months or a lower interest rate cap can be used on the first index change date. . . If there is an investor involved, such changes may not be acceptable.

You should not backdate your TRID disclosures to indicate that the “closing date” for the modification is tomorrow because you must observe the waiting periods required by Reg Z.

You have two options: (1) have the borrower sign another modification agreement to temporarily extend the interest only loan to allow the bank to then modify to add the ARM in a week or so; or (2) proceed with a gap between the maturity date of the original loan and the effective date of the modification.

How you proceed is a business decision. The risk of proceeding with a gap is that there could be an intervening lien filed between the maturity date of the original loan and effective date of the modification. That could cause issues as it relates to the bank’s lien priority. Obviously, there is less risk when the gap is only a few days.

We also recommend you check with your title company and/or investor before proceeding.