Rules in February 2024

ECS has been updated to enable changing the ALERT status response message to a FAIL status response message for Federal Higher-Priced Mortgage Loan (Section 35) and State Higher-Rate Loans.

This can be accomplished through opening a Technical Support ticket to request the addition of the appropriate parameter into the designated Service Group (Higher-Priced (FED) Review, Higher-Rate Review, or STATE Review) to modify the ALERT status response message to a FAIL status response message within the respective rules' service group. Technical Support will provide further instructions upon review of the request. If necessary, Technical Support will create a new custom Service Code for you.

CER-22756

ECS has been updated for users who submit loans in the state of Alabama under the Consumer Loan License. Specifically, the system will no longer include fees paid by the lender and paid to the lender under RH 18570 Maximum Lender Points 5% within the total fees measured against the 5% limit.

CER-22760

ECS has updated its rules associated with regulations governing Iowa first lien loans secured by a 1-2 unit dwelling, as detailed in Section 535.8 of the Money & Interest Provisions.

Iowa Rules Impacted —

• RH 17070 Iowa - Fees Not Allowed
• RH 27660 Iowa - Fees Not Allowed (Open-End)
• RH 30870 Iowa - Origination Fee & Processing Fee Restriction
• RH 30880 Iowa - Origination Fee or Processing Fee Warning
• RH 30890 Iowa - Max Origination Fee or Processing Fee
• RH 31190 Iowa - Flood Fees Not Allowed
• RH 50770 Iowa - Interest Fees Not Allowed
• RH 50760 Iowa - Interest Fees Not Allowed (Open-End)
• RH 52060 Iowa - Title Insurance Not Allowed
• RH 52660 Iowa - Third Party Fees

Users submitting such loans will no longer encounter fee limitation messages for the affected rules for construction only loans.

CER-22769

ECS has updated rules under then the Maryland Interest & Usury Act. Users can now expect detailed messaging in the FAIL status message, along with a new PASS status message for Maryland loan submissions.

Maryland Rule Impacted —

• RH 2410 Maryland - Minimum Grace Period (Interest & Usury)

The updated rule now includes provisions for the minimum grace period.

CER-22788

ECS has been updated to address the high-cost prohibited predatory practices balloon payment rule for construction-only loans in Massachusetts. Users submitting Massachusetts loans will no longer receive a FAIL status message if the Massachusetts High Cost construction-only loan has a term of greater than 12 months.

Massachusetts Rule Impacted —

• RH 25570 Massachusetts - Balloon Payment Not Allowed (High Cost)

The system will suppress the balloon payment limitation message if the construction-only loan term is greater than 12 months, aligning with 12 CFR § 1026.32(d) provisions.

CER-22484

ECS has updated its rules associated with South Carolina regulations governing junior lien loans' interest calculation requirements. Users will now receive a fail status message if the Interest Days In Year is set to Actual 360 or Periodic 360, providing clearer guidance during loan submissions.

South Carolina Rule Impacted —

• RH 1900 South Carolina - Days Used For Interest Calculation

Additionally, this update introduces new PASS and FAIL status messages tailored to the South Carolina Consumer Protection Code's requirement of using 365 days for per diem interest calculation. The Fail status message informs users that the South Carolina Consumer Protection Code requires 365 days used for the interest calculation" (S.C. Code Ann. 37-3-201(4)), while the Pass status message confirms compliance with this requirement.

CER-22571

ECS has updated Maximum Brokerage Commission Rules for junior lien loans under the Tennessee Residential Lending, Brokerage, and Servicing Act for the submission of Tennessee loans. This update ensures that users receive a fail status message if the total fees paid by the borrower to the lender on a junior lien loan exceed 2% of the loan amount. ECS has been updated to reflect more detailed FAIL status message and a new PASS status message under the existing RH 27830 for mortgage brokers.

Tennessee Rules Impacted —

• RH 27830 Tennessee - Max Broker Fees (RLBSA)
• RH 1001426 Tennessee - Max Brokerage Commissions

CER-22478

ECS has been updated to exclude prepaid interest paid to lender from Vermont High Fee thresholds for the submission of Vermont loans secured by a first lien on residential real estate.

Vermont Rule Impacted —

• RH 38010 Vermont High Fee Loan (Warning)

CER-22778

ECS updated the Prepayment Penalty message for West Virginia loans made by licensees under the West Virginia Residential Mortgage Lender, Broker, and Servicer Act, addressing prepayment penalties in alignment with W. Va. Code 13-17-8(b)&(d).

West Virginia Rule Impacted —

• RH 1670 West Virginia - Prepayment Penalty

The update limits the prepayment prohibition under the West Virginia Residential Mortgage Lender, Broker, and Servicer Act to junior lien loans.

CER-22615