TRID Compliance

by Michael Shohoney September 23, 2015 09:59

Our lending software products with TRID (TILA-RESPA Integrated Disclosures) compliance have been launched!  ZMath Desktop, eZMath and the ZMath Engine have all had Loan Estimate and Closing Disclosure outputs added.  It has been a long, long road complying with what is the singularly most difficult regulatory change in our history.  If TRID applies to you, we are the source for your software.  Feel free to login and give it a try.

TILA RESPA Integrated Disclosure (TRID) Beta is Here!

by Michael Shohoney February 23, 2015 05:08

Over the weekend, Math Corporation launched a BETA-TEST version of eZMath that addresses the TRID requirements from the CFPB that goes into effect on August 1, 2015.  To access this version of the software, log in to your account and select eZMath TRID Beta from the access menu.  Please note that use of the beta-test version is for testing only!  You cannot use any results for production, disclosure or any other reason until we remove the "Beta-Test" classification from it.  Also, we ask that you report any results that you do not believe to be accurate to us immediately so we can make any necessary corrections.  We're very excited about this next generation of eZMath and sincerely hope that it addresses the concerns and issues you'll have satisfying the requirements under the TRID rule.

New HUD Home Equity Conversion Mortgage (HECM)

by Michael Shohoney October 1, 2013 11:31

On September 3, 2013, HUD released Mortgagee Letter 13-27.  In it HUD made substantive changes to the Home Equity Conversion Mortgage (HECM) program that would go into effect on September 30, 2013.  The changes outlined in this ML, forced Math Corporation to revise both eZMathReverse and the ZMathReverse Engine.  Those changes have been made and both products were made available to our customers on September 29, 2013!

So, if you are a user of eZMathReverse, you need to use the new method (2013) for any transaction having a case number assigned on September 30, 2013 or later.  Please review the Mortgagee Letter for reference as there are issues that may affect your entries in the eZMathReverse calculator.  You need to address issues like Mandatory Obligations, additional Principal Limit, the correct MIP rates, etc., etc.  Also, depending on your results, your borrower may choose to make changes to how you've structured the transaction to better fit their needs.  So, there will be times when multiple runs of the product will be needed.

If you are a user of the ZMathReverse Engine and you have not responded to our contact with you, you need to let us know that you're ready for the engine.  Once you get in touch with us, we can have the software delivered immediately.

These changes are significant!  You need to look them over, understand them and apply them to the way you structure your transactions.  As always, if you have any questions, please feel free to contact us!

Important HUD FHA MIP Revisions That Affect ZMath®

by Michael Shohoney February 11, 2013 10:04

HUD, in Mortgagee Letter 2013-04, has revised the FHA insurance program.  The revisions are numerous and you should get the Mortgagee Letter and make sure that you adjust your programs accordingly.  These changes must be in place for any loan having a case number assigned on or after June 3, 2013.  One change involves us revising the ZMath family of products. 

This change is the elimination of the LTV cutoff for MIP.  What HUD has done is set the term of insurance based on the initial loan-to-value ratio.  For any loan with an initial loan-to-value ratio greater than 90%, MIP remains in force for the entire loan term.  For loans with an LTV of 90% or less, the MIP remains in force for a term of eleven years.

Our engines have been adjusted to calculate this properly and are available as an update.  If you did not receive your update, please contact us for immediate delivery.  Our eZMath and ZMath products will be receiving the update in the near future and will be rolled out well in advance of the date needed to comply.

If you have any questions about this or any other issue related to our products, please feel free to contact us!

13-Month Escrow Analysis?

by Michael Shohoney January 25, 2013 06:53

One of the issues that seems to come up repeatedly here is the issue of what, we term, a 13-month escrow analysis.  Here’s the scenario; a lender is closing a loan and one of the escrow items is due sometime in the month of the first payment.  So, let’s say that the loan closes in December with a first payment due in February.  The hazard insurance premium is due in February.  Lenders, for some reason, want to collect the entire premium at closing and pay it instead of paying it out of escrow.  The reasons for this remain somewhat unclear.  Yet, they do want the item to be escrowed.

What’s the problem with this?  According to the regulations that govern escrow accounts, an initial escrow analysis can only be for one year, measured from the date of first payment (i.e. 2/1 – 1/31 in our example).  Doing what the lender is requesting, the insurance premium, since this year’s is paid, that will be part of the analysis is next year’s premium and it falls outside the one-year analysis.  This is prohibited by Section 3500.17 of Regulation X (RESPA).  Our one-sixth annual escrow analysis follows the regulation to the letter.  But, in the instance outlined above, we get inquiries on how to satisfy this.  Really, since it goes against the regulation, you can’t. 

So, what are the possible solutions?

1.       Follow the regulation and pay the item, when due, out of the escrow account.  We’re told from time to time that the lender cannot establish the account and pay out of it that quickly.  We find that very hard to believe.  This is the proper way to do it and we believe that lenders should be able to accommodate the mechanics of the regulation if they are going to require items to be escrowed.  Let’s remember that escrow accounts are there, ultimately, to protect the lender.  Therefore, they should be established in such a way that any “inconvenience” is to the lender, not the borrower.

2.       Do not escrow this item.  This probably is not a desired solution but, if the lender insists on collecting the entire amount of the item (prepay) at closing, then escrow having as part of the escrow is not feasible under current regulations.

3.       Perform a short-year analysis in the second month of the loan.  A short-year analysis is allowed to make adjustments to escrow accounts where there is an anticipated shortfall or surplus.  This item, if agreed to be escrowed at a future time, would be considered a shortfall.

Lenders need to be careful as to what they’re requiring borrowers to do.  We have gone through a rough period with a lot of lender abuses and borrower difficulties.  This is a situation where we believe that the lender must adjust their methods in order to comply with existing regulation.

As always, if you have any questions, please contact us.

CFPB Proposed Rule Will Result in New Version

by Michael Shohoney August 16, 2012 04:59
As all of you are painfully aware, the Consumer Financial Protection Bureau (CFPB) has proposed sweeping changes to way mortgages are disclosed.  In essence, they've proposed the use of two new disclousres, the Loan Estimate and the Closing Disclosure, that combine features of the previous disclosures into one.  For our users to more easily comply with these new rules, the ZMath® Engine, eZMath® and ZMath® will all be updated once the rules are finalized.  If you haven't begun to look at the proposed rules, we suggest that you do so that you're ready for the changes once we release them.  If you have questions, ideas or feedback, please contact us.  Also, watch this blog for further updates as we get further into the process.  Nothing is so constant as change.

New TIL Payment Tables

by Michael Shohoney January 27, 2011 06:53
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.

Sweeping Regulation Z Changes

by Michael Shohoney October 6, 2010 07:12
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.

Reverse Mortgage Changes Launched!

by Michael Shohoney October 4, 2010 09:29
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.

ZMathReverse Changes

by Michael Shohoney September 24, 2010 07:04

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.