Our software (both eZMath and ZMath StandAlone) have been updated to output the new TIL Payment Tables as required by the September 24, 2010 rule.  If you are a user of eZMath, you will see a new ouput option from the drop-down menu that lists the H4 forms.  Select that output to see a sample form.  These are sample forms!  You should use the data contained in those forms to fill the forms that you use at your institution.  If you are a ZMath Stand-Alone owner you will have to upgrade your software.  Please contact us for information about how to do that.

As many of you are painfully aware, Regulation Z had some massive changes made to it on September 24.  The changes, which are part of the Mortgage Disclosure Improvement Act (MDIA), affect the Truth-in-Lending statement for all loans secured by real property or a dwelling.  Instead of the payment schedule disclosed under Section 226.18 (g), a new payment table as defined in new Section 226.18 (s) must be disclosed.  Obviously these changes affect ZMath, eZMath and the ZMathEngine.  We have already begun the process of updating all of these systems and will release new versions prior to the mandatory compliance date of January 30, 2011.  As always, if you have any questions, feel free to contact us.  As soon as we are ready to release the changes, we will notify our customers directly and via our blog.

Today Math Corporation would like to announce that the changes required to be in effect on October 4 have been launched on our web site.  eZMathReverse has been altered to include the HECM Saver product.  The new principal rate factors have also been incorporated.  If you are writing reverse mortgage business, you need to be cognizant of the changes and make sure that you select the proper options when calculating those products.  Pay particular attention to the rates in effect for any standard HECM product.  If the loan is being written after October 3, you must use the new principal rate factors.  Also, you cannot write a HECM Saver unless it is originated after October 3.  As always, if you have any questions, contact us.

On Monday, September 20, 2010, HUD issued Mortgagee Letter 2010-34 which made some sweeping changes to the Home Equity Conversion Mortgage (HECM) program.  The changes included the introduction of a new program, the HECM Saver loan, new insurance premium factors for both the HECM and HECM Saver programs, and new principal limit rate factors for both programs that MUST be used for any loans applied for on or before October 4, 2010.

Tuesday, September 21, 2010, Math Corporation began making the changes necessary to implement the new programs and rate factors.  Late Tuesday the ZMathReverse component was released to our client base ready for the October 4 implementation date.  We also initiated changes to the eZMathReverse program and will have that up and running on the web site on October 4.  If you are affected by these changes, you need to be sure that you have the current version in place prior to October 4.  If you have any questions, please contact us immediately.

Yesterday HUD announced (Mortgageee Letter 2010-28) that the premium factors for FHA mortgage insurance will change for loans where the case number is assigned on or before October 4, 2010.  The upfront premium factors are lower while the annual renewal factors are higher.  The new premium factors are:

Upfront Premium Factor--100 Basis Points (i.e. 1.0)

Annual Renewal Factors for loans with a term greater than 15 years--LTV equal to or less than 95%, 85 Basis Points (i.e. 0.85).  LTV greater than 95%, 90 Basis Points (i.e. 0.9)

Annual Renewal Factors for loans with a term equal to or less than 15 years--LTV equal to or less than 90%, No renewal premium.  LTV greater than 90%, 25 Basis Points (i.e. 0.25)

 Additionally, the premium factors for the HECM (Home Equity Conversion Mortgage) program have changed as well.  The new factors for these reverse mortgages are:

Upfront Premium Factor--200 Basis Points (i.e. 2.0)

Annual Renewal Factor--125 Basis Points (i.e. 1.25)

 Since the ZMath Engine, ZMath, eZMath, ZMathReverse and eZMathReverse products all allow the user to enter the insurance factors for all products, a change is not required to your software.  However, changes are required for your inputs (however you may handle that).  Be sure to begin to use the correct premium factors for all loans whose case number assignment occurs on or before October 4, 2010.

 As always, we are here to help.  If you have problems or questions regarding these changes and how it will affect your system(s), please do not hesitate to contact us.

Late on Wednesday, September 23, HUD announced that there was a new factor table that was to be used for all HECM loans with a case number assigned on or after October 1, 2009.  Math Corporation began implementing the new factors Thursday morning and on Friday, September 25 at 2:00 CDT released ZMathReverse with both new and old factors incorporated.  Our eZMathReverse will be updated later this week to incorporate the changes.  If these changes affect you, please notify us and we will get the new version of the component to you.

Lately we've fielded a lot of calls and emails questioning where the ZMath Engine, eZMath and ZMath cutoff FHA MIP premiums.  Universally, the inquirer states that we are cutting off the MIP too early.  Invariably what is going on is that there is financed premium involved.  For that reason, the calculation of the cutoff is not as straight forward as calculatiing the percentage of the loan's balance and looking at the amortization schedule for that balance.  No, the calculation is quite a bit more involved than that.  Apparently, there are a few LOS and underwriting systems out there that do not do this correctly!  For that reason, we will not go into the specifics of the correct calculation.  Rest assured, we have it correct here in all of our software.  So, if you're questioning your results, contact us and we will share with you why we are right and why your other system is falling short or should we say long of the correct result!