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#2141929 - 08/14/17 06:36 PM
LE's/CD's -UCD
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Member
Joined: Dec 2016
Posts: 74
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I read from 4th quarter of 2016, going forward, all LE's and CD's will be required to utilize an alternate version if the transaction is a "refinance". If the other form is used, it will be considered invalid. In reading Federal Register Vol. 78 No.251 on p. 80187, this is what it states. Does anyone have any further guidance? thank you in advance.
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#2141930 - 08/14/17 06:41 PM
Re: LE's/CD's -UCD
Mike T
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10K Club
Joined: Jul 2001
Posts: 83,396
Galveston, TX
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Yes - under the UCD rules, all non-seller transactions will require the alternative LE/CD.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#2142014 - 08/15/17 12:55 PM
Re: LE's/CD's -UCD
Mike T
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Platinum Poster
Joined: Jan 2017
Posts: 574
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Just to be clear, using the normal CD is still allowed for refinances under the regulations, those loans just won't be accepted by Fannie/Freddie (or any other investors who require UCD XML files), correct?
I feel like UCD has flown under the radar. Any loans with a note date on or after 9/25, means a lot of loans being disclosed now need to have a solution in place, and I've seen almost nothing outside of Fannie/Freddie talking about it.
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#2142019 - 08/15/17 01:31 PM
Re: LE's/CD's -UCD
Mike T
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10K Club
Joined: Jul 2001
Posts: 83,396
Galveston, TX
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Currently, it will generate a warning error in the Fannie/Freddie system on test files. It does not appear to be a fatal error at this time. I would imagine that it may come to that in the future after the pipeline is clear, but banks anticipating needing to do UCD submissions should probably make the change as soon as reasonably possible. Why someone would use the standard form on a non-seller transaction kind of escapes me anyway.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#2142050 - 08/15/17 03:06 PM
Re: LE's/CD's -UCD
Mike T
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Diamond Poster
Joined: Dec 2013
Posts: 1,399
CA
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Agreed, if you are using standard form (why?) on refinances you need to put a process in place to change over well in advance of 09/25, if you plan on selling to the GSE's. I have heard them verbally clarify this in multiple seminars and webinars. Use the wrong CD after that date and your stuck with the loan.
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#2142071 - 08/15/17 04:06 PM
Re: LE's/CD's -UCD
Mike T
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Diamond Poster
Joined: Jan 2010
Posts: 1,028
Utopia
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Freddie just released information about this today.
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#2142089 - 08/15/17 04:38 PM
Re: LE's/CD's -UCD
Mike T
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10K Club
Joined: Jul 2001
Posts: 83,396
Galveston, TX
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Where??
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#2142186 - 08/15/17 10:37 PM
Re: LE's/CD's -UCD
Mike T
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Member
Joined: Dec 2016
Posts: 74
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I know this is for GSE(s) only. However, majority of our loans are VA/FHA which doesn't fall into the category. The investor just posted it today stating for ALL loans. As we are not direct, there isn't a choice in the matter on what the correct procedures are for us.
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#2142209 - 08/16/17 12:21 PM
Re: LE's/CD's -UCD
Mike T
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10K Club
Joined: Jul 2001
Posts: 83,396
Galveston, TX
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Soccer - thanks, but that information does not appear to address the use of the standard versus alternative form on non-seller transactions.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#2142210 - 08/16/17 12:29 PM
Re: LE's/CD's -UCD
Mike T
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10K Club
Joined: Jul 2001
Posts: 83,396
Galveston, TX
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I found this in the Freddie FAQs:
25. On non-seller (e.g., refinance) transactions, do the GSEs require the use of the “Alternate†form, Form H-25(E), published by the CFPB? (Refer to Federal Register vol. 78, No. 251 on p. 80187).
Both GSEs require use of form H-25(E) for all refinance transactions on the loans they acquire (refer to Federal Register website for additional details on this regulation). If a non-seller transaction is submitted on the “Model†form, the GSE collection systems will issue warning messages at the outset of the mandate and will not prevent a submission from being considered “successful.†However, the warnings may be changed to a hard stop at a later date. More information will be provided by the GSE regarding the timeframe for these hard stops.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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