Source: https://compliance.docutech.com/2017/08/17/document-updates-mn-lock-agreement-cx18228-mn-commitment-agreement-cx18229-mn-disclaimer-loan-terms-cx18230/
Timestamp: 2019-09-20 23:18:29
Document Index: 421627410

Matched Legal Cases: ['§ 47', '§ 47', '§ 47', '§ 47', '§ 47', '§ 47', '§ 47', '§ 47', '§ 47', '§ 47', '§ 47', '§ 47', '§ 47', '§ 47', '§ 47', '§ 47', '§ 47', '§ 47', '§ 47', '§ 47', '§ 47', '§ 47', '§ 47', '§ 47']

Document Updates: MN Lock-in Agreement (Cx18228), MN Commitment Agreement (Cx18229), and MN Disclaimer of Loan Terms (Cx18230) - Compliance
08.17.17 • Document Updates
Document Updates: MN Lock-in Agreement (Cx18228), MN Commitment Agreement (Cx18229), and MN Disclaimer of Loan Terms (Cx18230)
All three of these documents are required under various provisions of Minn. Stat. Ann. § 47.206. In the case of Cx18228 and Cx18229, they are also required under Ibid. § 47.20. After a review of these documents and statutes, we will be changing the configurations for these documents.
Minn. Stat. Ann. § 47.20 (which was enacted in 1969), is a statute which provides general lending authority to financial institutions. Under Ibid.§ 47.20(1), several types of financial institutions – including “mortgagees or lenders approved or certified by the secretary of housing and urban development or approved or certified by the administrator of veterans affairs, or approved or certified by the administrator of the Farmers Home Administration or any successor, or approved or certified by the Federal Home Loan Mortgage Corporation, or approved or certified by the Federal National Mortgage Association” – are authorized to make the following types of loans:
FHA-, VA-, and RD-insured/guaranteed loans, including ones secured by a share of stocks on a cooperative (see § 47.20[1]:[1] & [2]);
Loans sold to FNMA and FHLMC, without regard to the maximum principal amount of the loan (see § 47.20[1]:[3]); and
Mortgage loans authorized by the Office of the Comptroller of the Currency (see § 47.20[1]:[4]).
These types of loans are broad in scope. However, most of the remaining subsections of Ibid. § 47.20 set forth provisions and restrictions applicable to “conventional loans”, which are defined as follows:
“‘Conventional loan’ means a loan or advance of credit, other than a loan or advance of credit made by a credit union or made pursuant to section 334.011, to a noncorporate borrower in an original principal amount of less than $100,000, secured by a mortgage upon real property containing one or more residential units or upon which at the time the loan is made it is intended that one or more residential units are to be constructed, and which is not insured or guaranteed by the secretary of housing and urban development, by the administrator of veterans affairs, or by the administrator of the Farmers Home Administration, and which is not made pursuant to the authority granted in subdivision 1, clause (3) or (4). The term mortgage does not include contracts for deed or installment land contracts.” (see Ibid. § 47.20[2]:[3])
The provisions concerning “conventional loans” include definitions of, and rules concerning, commitment agreements (see Ibid.§ 47.20[2]:[8]) and lock-in agreements (see Ibid. § 47.20[2]:[7]). Thus, the provisions addressing these two documents under Ibid. § 47.20 apply only to loans of less than $100,000, secured by one or more residential units, which are not insured or guaranteed by HUD, the VA, or RD.
Minn. Stat. Ann. § 47.206(2) & (3) (which was enacted in 1987), requires agreements between a “lender” and a borrower to be in writing. A “lender” is defined (in part) as “a person making a conventional loan as defined under section 47.20, subdivision 2, clause (3), or cooperative apartment loan as defined under section 47.20, subdivision 2, clause (4), except that conventional loans or cooperative apartment loans include any LOAN or advance of credit in an original principal balance of less than $200,000” (Ibid. § 47.206[1][a]; emphasis added)
The word “loan” – which is a key part to understanding the overlap between Ibid. §§ 47.20 and 47.206 – is defined as:
“. . . loans and advances of credit authorized under section 47.20, subdivision 1, clauses (1) to (4), and conventional loans as defined under section 47.20, subdivision 2, clause (3), or cooperative apartment loans as defined under section 47.20, subdivision 2, clause (4), except that conventional loans or cooperative loans also include all loans and advances of credit in an original principal balance of less than $200,000. ‘Loan” does not include a loan or advance of credit secured by a mortgage upon real property containing more than one residential unit or secured by a security interest in shares of more than one residential unit in a building owned or leased by a cooperative apartment corporation.” (Ibid. § 47.206[1][b]; emphasis)
“Loans and advances of credit authorized under section 47.20, subdivision 1, clauses (1) to (4)” are the loans in the bulleted list above. This would include loans in addition to “conventional loans” (properly defined in Ibid. § 47.20, albeit Ibid. § 47.206 expands the definition to include loans of $200,000 or less).
Taken altogether, what this means is that any “lender” under Ibid. § 47.206 must have a written commitment or rate-lock agreement for any loan which financial institutions are authorized to make under Ibid. § 47.20 (regardless of loan amount) that are secured by a single-family dwelling, including – but not limited to – “conventional loans” (of $200,000 or less). If a commitment or rate-lock agreement exists for a “conventional loan” under Ibid. § 47.20 (of $100,000 or less, secured by one or more residential units), additional provisions apply.
Print Configurations for Cx18228 and Cx18229
Due to this overlap, we will be changing the configurations for “MN Lock-in Agreement” (Cx18228) to print as follows:
Occupancy = Allow Any (currently = PrimaryResidence or SecondHome)
Base Type = Allow Any (currently = Conventional)
Loan Amount Less Than 200k = Allow Any (currently = Yes)
Similarly, configurations for “MN Commitment Agreement” (Cx18229) will be changed to the following:
These configurations will ensure that the documents will cover all loans covered by Minn. Stat. Ann. § 47.206 (all types of mortgage loans secured by single family properties), as well as “conventional loans” under Ibid.§ 47.20 (mortgage loans secured by one or more residential units, with a principal loan amount of less than $200,000, per the modified coverage under Ibid. § 47.206[1][a] & [b]).
Due to these changes, we will also be configuring FHA Lock-in Agreement (Cx19817) to not print for Minnesota, since Cx18228 will print in all cases where a rate-lock fee is charged.
Print Configurations for Cx18230
“MN Disclaimer of Loan Terms” (Cx18230) will be configured to print under the following circumstances:
Base Type = Allow Any
Document Package Type = Initial Disclosure or TILA Redisclosure
Property Type = Co-op, Condo, Log Home, Manufactured/Mobile, Other, PUD, Single Family, or Townhome
These changes will take effect on August 24, 2017. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.
DR 238787