Navigating the Regulatory Landscape

Whats Inside?

FROM THE DESK OF DOMINIC IANNITTI President and CEO of DocMagic, Inc.

MANAGING COMPLIANCE RISK A Message from DocMagics Chief Legal Ofcer and Chief Compliance Ofcer

INTRODUCTION DocMagic: More Than Just a Document Provider

COMPLIANCE The Calm Before the Storm

OPERATIONS RESPA 2010 Audits

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TECHNOLOGY Business Continuity and Disaster Recovery at a Glance

Navigating the Regulatory Landscape.

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2012

From the Desk of Dominic Iannitti, President and CEO of DocMagic

Dear Mortgage Professional, Thank you for your interest in DocMagics Compliance eBook. DocMagic is the leading provider of loan document preparation, compliance and delivery technologies for the national mortgage industry. Our speed, efciency and robust compliance functionality have positioned us to manage the myriad of regulatory changes our customers face every day. As a result, over 40,000 mortgage and lending professionals (including competitors) rely on DocMagic for compliance information every month. We continue to energetically and enthusiastically lead the charge to modify behaviors and processes for the good of our customers and the protection of our earth by the use of green technology. As a document technology leader for over 23 years, we are innovating more than ever and we are grateful that our industry recognizes that fact. In the following pages, we hope to convey our commitment to excellence and the spirit and energy of the people who work to keep DocMagic #1 nationwide. Sincerely,

Dominic Iannitti President and CEO

DocMagic, Inc. I
DocMagic, Inc.

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Managing Compliance Risk: A Message from DocMagics Chief Legal Ofcer and Chief Compliance Ofcer
The mortgage lending industry has faced signicant changes over the last three years more than at any time in the past. Looking at the federal regulatory agenda, it seems that change will be a constant for the foreseeable future. Many of the Dodd-Frank Act regulations have yet to be adopted and the mortgage environment still faces uncertainty. Reacting to regulatory changes can be expensive and time consuming. However, regulatory compliance done right can create opportunities for your business its a proven way to reduce risk, lower costs, gain efciencies, and set yourself apart from your competitors. For a business to grow and thrive, its leaders have to select the right tools and the right partners to help them manage regulatory change and turn it into an advantage. DocMagics Compliance Department is dedicated to providing you today with the tools and technology youll need to thrive in tomorrows business environment. We provide up-to-date compliance information through our monthly electronic To illustrate, DocMagics Compliance Department prepared its customers in time for: The new GFE and HUD-1/HUD 1-A Statements under RESPA 2010 The timing requirements and APR variance required by the MDIA The updated TILA Statements pursuant to the MDIA and Regulation Z The Loan Originator Compensation Rule under Regulation Z Jumbo HPML requirements under TILA Continued We take pride in the fact that over 40,000 mortgage professionals rely on DocMagic to provide them with compliance information. These professionals frequently browse our compliance site: www.docmagic.com/compliance/compliance-topics/ index for compliance information and resources. publication, The Compliance Wizard, and quick reference tools on a wide variety of topics. Our customers have 24/7 access to the members of our Compliance Team. Our DocMagic system audits your loan data and returns compliance messages and warnings at the click of a mouse. And we provide these services in addition to DocMagics core product, the production and delivery of loan documents that comply with all applicable federal and state laws and regulations. Our Compliance Department laid out and programmed the new GFE and HUD-1/HUD 1-A Statements and versions of the TILA Statement to address various loan scenarios and built audits so that our customers could determine their compliance with the requirements of the MDIA, the Loan Originator Compensation Rule, and the Jumbo HPML. And, as we were updating our loan documents and building these audits, we responded to hundreds of calls and emails from our customers who called to inquire about our plans to comply with these signicant regulations and/or to discuss varying interpretations of a particular provision.

Navigatingthe Regulatory Landscape.

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Managing Compliance Risk: A Message from DocMagics Chief Legal Ofcer and Chief Compliance Ofcer
We know we are doing something right when compliance experts refer others to our site for compliance information and resources. Thank you for taking the time to review our eBook. We think it offers a representative sample of what DocMagics Compliance Team can do for you now and in the future. We hope that you consider asking us to join you as your partner in mortgage compliance. If you would like more information and/or a demo on our compliance services, please dont hesitate to contact us. Very truly yours, Melanie A. Feliciano Chief Legal Ofcer DocMagic, Inc. Laurie Spira Chief Compliance Ofcer DocMagic, Inc. Melanie A. Feliciano Laurie Spira

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Introduction DocMagic: More Than Just a Document Provider

First and foremost, mortgage brokers and lenders need robust technology that can generate loan documents throughout the loan origination process. While these mortgage professionals may initially select DocMagic for its technology, they ultimately stay with DocMagic because its loan documents are backed by comprehensive compliance services and superior customer service that can be relied upon from the very rst day of the relationship. In a recent interview, Dominic (Don) Iannitti, President and CEO of DocMagic, Inc., dba Document Systems, Inc. (DSI), could not emphasize enough that customer service is the Number 1 priority:
I think our most successful achievement is consistently providing superior customer service. Our goal is simple... complete customer satisfaction. Typically, companies say that but they dont accomplish it consistently. Its the companies that actually do, that do well and stand the test of time. That is the type of company we are and we are very proud of it.

Don further added:

. . . From the beginning, it has been our goal of always providing exemplary customer service that has driven DSI. . .Many rms talk about providing service to the customer, but to me, you cannot separate excellent service from the customer. You cant have one without the other. Our software has been and continues to be one way we deliver on that customer service promise.

generated in just a few seconds, no matter how many document packages are processed in a day. Integration services with a wide variety of loan origination systems are invaluable for customers who value efciency and consistency. DocMagic also recognizes that processing loan documents without any compliance backing could leave the customer in a vulnerable position, subject to negative consequences in which the customers loan cannot be sold to a secondary market investor or where the customers regulator orders that the customer pay a ne or refund the borrower for noncompliance on some level. Accordingly, another way that DocMagic delivers on its customer service promise is providing compliance services that work in tandem with the DocMagic application. DocMagics in-house Legal/Compliance Department works tirelessly to ensure that forms and documents are always compliant with applicable federal and state laws and government-sponsored enterprises guidelines. In addition, compliance resources are posted on DocMagics Compliance website, providing transparency on the nuts-and-bolts of DocMagics high-cost tests and compliance audits.

From Customer Service to Enterprise Investor Relations, Technical Support and Information Technology, In-House Fulllment Services and the Compliance Department, and throughout every other department of the DocMagic organization, DocMagics employees understand that customer service must be an integral part of their departments function. Appreciating the fact that the DocMagic customer may be at the closing table when they call on DocMagic personnel for assistance, DocMagic maintains an open-door policy so that any department within the organization can interface with another easily and quickly. DocMagic knows that technology needs to be scalable so that loan documents can consistently be

Continued I
DocMagic, Inc.

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Introduction DocMagic: More Than Just a Document Provider

Following is a brief summary of many, but not all, of the services that the Compliance Department provides:

Anti-Predatory Lending Tests. The DocMagic

application provides predatory lending tests, including Section 32; the Fannie Mae/Freddie Mac 5% Points and Fees Test; state high cost tests and audits, including the Connecticut Nonprime Home Loan Audit, Maine Rate Spread Home Loan Audit, Maryland HigherPriced Mortgage Loan Audit, New York Subprime Home Loan Audit, and North Carolina Rate Spread Home Loan Audit. Each high cost test (not audit) and the Fannie Mae/Freddie Mac 5% Points and Fees Test includes a high-cost details screen.

Compliance Website. The Compliance Departments website is abundant in compliance resources, including disclosure matrices, a late fee matrix, a state-specic permissible fee matrix, and many, many more.

Loan Packages. DocMagic offers a number of

different loan packages, including: (1) Application; (2) Pre-Qualication; (3) Adverse Action; (4) Initial Disclosure; (5) Underwriting; (6) Processing; (7) Forms List for interim processing disclosures; (8) Pre-Closing; (9) Re-Disclosure; (10) Closing; and (11) Loan Modication.

The Compliance Wizard. The Compliance Department

publishes a complimentary monthly, electronic compliance newsletter that apprises its readers of legal developments in the mortgage industry, introduces new compliance resources that have been posted recently to the Compliance website, and informs its customers of enhancements to the DocMagic application to address those legal developments.

Loan Programs. DocMagic has thousands of loan

programs that customers may use. In addition, DocMagic, upon customer request, has created unique loan programs, including, but not limited to, FHAs Good Neighbor Next Door Program, a New York CEMA program, HELOC programs, and Fannie Maes Home Affordable Modication Program (HAMP).

On-Call Compliance Department. Members of the Legal/

Compliance Department are available 24/7 to handle compliance-related emails and telephone calls. Except for ClickSign, ALL of the above-mentioned compliance services are included in DocMagics loan processing fee, which comprises a very small fraction of the loan amount. Many other services are included in the processing fee, including data validation audits and many other compliance audits not mentioned above. Plus, phone calls to any department within DocMagic to handle customer inquiries are free of charge. Feel free to contact DocMagics Customer Service Department, at (800) 649-1362, or its Compliance Department, if you have any questions regarding the contents of this article.

Higher-Priced Mortgage Loan (HPML) Audit.

This audit identies whether a loan is a higher-priced mortgage loan. In addition, DocMagic offers an HPML prepayment audit in cases where the terms of an HPML provide for a prepayment penalty.

eDisclosure. All loan packages up to closing,

including, but not limited to, Application, Adverse Action, Initial Disclosure and Re-Disclosure loan packages, can be sent electronically using DocMagic eSign, which complies with the federal ESIGN Act.

Mortgage Disclosure Improvement Act (MDIA)

Audits, including: the seven-business-day waiting period audit; the three-business-day waiting period audit; and the APR threshold variance audit.

ClickSign. For a nominal fee, customers can arrange

to have the borrower(s) electronically sign loan documents, using the ClickSign feature in DocMagic eSign.

Compliance Audit Screen. Each DocMagic loan

worksheet provides a compliance audit screen.

TILA Calculations are guaranteed.

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Dodd-Frank Act: The Calm Before The Storm

The Dodd-Frank Wall Street Reform and Consumer Protection Act (the Act) was signed into law on July 21, 2010. More than 800 pages long, the Act requires a rulemaking process that could take as long as ve years and could result in as many as 250 rules from 20 different regulatory agencies. Mortgage lending professionals are especially interested in the progress being made on implementing the requirements of Title IX, which addresses credit risk retention for asset-backed securities, Title X, which establishes the Consumer Financial Protection Bureau (the Bureau), and Title XIV, the Mortgage Reform and Anti-Predatory Lending Act. Although some of the Dodd-Frank Act requirements have been implemented in the almost two years since the Act was signed, the most signicant impact is likely to be felt in the next 18 months. By July 21, 2012, the Bureau is required to propose rules and model disclosures that combine the disclosures required under the Truth-in-Lending Act (TILA) and sections 4 and 5 of the Real Estate Settlement Procedures Act (RESPA) into a single, integrated disclosure. Consumers and the industry (including the members of DocMagics Compliance Department) have been actively involved in reviewing prototype disclosures through the Bureaus Know Before You Owe project, which put draft disclosures online to obtain public input. The Bureau has also conducted consumer testing and is currently engaged in a Small Business Regulatory Enforcement Fairness Act (SBREFA) panel process, which will examine the impact of the proposed disclosure changes on small businesses. The prototype disclosures and the SBREFA documents suggest that the proposed rule and model disclosures will be a signicant departure from the current TILA and RESPA disclosures. In addition to the requirement to combine the current TILA and RESPA disclosures, Title XIV of the Act amends TILA and RESPA to require new disclosures that must be provided in the Loan Estimate or Settlement disclosures. Title XIV also adds other new disclosure requirements that arent specically included in the Loan Estimate or Settlement Disclosures. Title XIV provides that these regulations or amendments to the consumer law must be nal by January 21, 2013, with an effective date not later than January 21, 2014. Although the Bureau has stated a belief that nal regulations implementing these Title XIV disclosures simultaneously with the nal TILA-RESPA rule would improve the overall effectiveness of the disclosures, it may not be possible to issue a nal TILA-RESPA rule by January 21, 2013. Accordingly, the Bureau is considering a proposal to use its authority to exempt lenders from the Title XIV disclosure requirements temporarily until the TILA-RESPA disclosure rule takes effect. Until the TILA-RESPA rule is proposed, though, the industry cant know exactly what to be prepared for, and what the effective date is likely to be. While DocMagics Compliance Department is patiently awaiting Dodd-Frank developments, it is preparing for what might be, based on what we know today. For example, we have identied new data points that we may need to collect to complete the TILA-RESPA disclosures based on previously-published prototypes. We are also identifying opportunities to build audits and tests for the ability-to-repay rule and qualied mortgage denition. We also have plans in place in case nal regulations for Dodd-Frank are not adopted by January, 21, 2013. Rest assured, DocMagics Compliance Department remains poised to have our customers in compliance with Dodd-Frank, on time. In the coming months, as Dodd-Frank regulations are proposed and nalized, we will keep you apprised of developments, including any planned audits, tests, forms and enhancements to the DocMagic application.

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Operations RESPA 2010 Audits

Introduction
The following three articles were previously published in The Compliance Wizard, DocMagics monthly electronic newsletter. The rst two articles describe the audits implemented to comply with RESPA 2010, including, but not limited to, the Zero Tolerance and 10% Tolerance Thresholds, and the update to those audits based on the RESPA Technical Corrections and Clarifying Amendments (Amendments) that were effective on August 10, 2011. We also provide an article describing alternate programming subsequently implemented to the HUD-1 to accommodate an alternate interpretation of the Amendments. Reg. X Section 1024.2(b) denes business day as a day on which the ofces of the business entity are open to the public for carrying on substantially all of the entitys business functions. Accordingly, if a date less than 10 business days from the date the GFE is issued is entered in the Est. Available Through elds, as shown in the example: it may remain available longer, if the loan originator extends the period of availability. The estimate for the following charges are excepted from this requirement: the interest rate, charges and terms dependent upon the interest rate, which includes the charge or credit for the interest rate chosen, the adjusted origination charges, and per diem interest.

DocMagics RESPA 2010 Audits (Published February 2010)

Based on the nature of customer inquiries into DocMagics Customer Service and Compliance Departments, industry professionals seem to have acquired a greater comfort level regarding the new RESPA requirements. As DocMagics prior articles have addressed the basics of the RESPA 2010 Rule and explained how the DocMagic application operates to handle RESPAs 2010 requirements, it is appropriate now to introduce the various RESPA 2010 audits that DocMagic implemented in January, 2010. I. Expiration Date of Estimate For All Other Settlement Charges Audit Under Reg. X Section 1024.7(c), . . . the estimate of the charges and terms for all settlement services must be available for at least 10 business days from when the GFE is provided, but

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Operations RESPA 2010 Audits

the following audit will display: WARNING: DATE THROUGH WHICH ESTIMATE FOR SETTLEMENT CHARGES IS AVAILABLE MUST BE A MINIMUM OF 10 BUSINESS DAYS FROM DATE GFE WAS PROVIDED II. Line 801 Audit Charges characterized as Our Origination Charge and appearing in Block 1 of the GFE and Line 801 of the HUD-1 Statement cannot increase absent changed circumstances. If Our Origination Charge increases in amount on the HUD-1 as compared with what was disclosed in the Good Faith Estimate (GFE),
Comparison of Good Faith Estimate (GFE) and HUD-1 Charges Charges That Cannot Increase HUD-1 Line Number
Our Orgination charge Your credit or charge (points) for the specic interest rate chosen Your adjusted origination charges Transfer taxes #801 #802 #803 #1203

III. Line 802 Audits According to Appendix C of Reg. X: The amount stated in Block 2 is subject to zero tolerance while the interest rate is locked, i.e., any credit for the interest rate chosen cannot decrease in absolute value terms and any charge for the interest rate chosen cannot increase. (Note: An increase in the credit is allowed since this increase is a reduction in cost to the borrower. A decrease in the credit is not allowed since it is an increase in cost to the borrower.) Accordingly, if the credit for the interest rate chosen decreases, as shown in the example below:
Comparison of Good Faith Estimate (GFE) and HUD-1 Charges Charges That Cannot Increase HUD-1 Line Number Good Faith Estimate
$3,100.00 -1,500.00 1,600.00

Good Faith Estimate

$3,000.00 -1,500.00 1,600.00

HUD-1
$3,100.00 -1,000.00 -1,000.00

the following audit will display: WARNING: CHARGE IN HUD-1 (#801) EXCEEDS CHARGE IN GFE; REDUCE CHARGE OR CREDIT BORROWER THE EXCESS AMOUNT ($__) To the right is a screen shot of the audit based on the values shown in the above Comparison Table:

HUD-1
$3,100.00 -1,000.00 -1,000.00

Our Orgination charge Your credit or charge (points) for the specic interest rate chosen Your adjusted origination charges Transfer taxes

#801 #802 #803 #1203

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Operations RESPA 2010 Audits

the following audit will display: WARNING: CREDIT IN HUD-1 (#802) IS LESS THAN CREDIT IN GFE; INCREASE CREDIT AMOUNT OR CREDIT BORROWER THE AMOUNT OF THE DIFFERENCE ($-__) Below is a screen shot of the audit based on the values shown in the above Below is a screen shot of the audit based on the values shown in the above Comparison Table: Comparison Table: the following audit will display: WARNING: CHARGE IN HUD-1 (#802) EXCEEDS CHARGE IN GFE; REDUCE CHARGE OR CREDIT BORROWER THE EXCESS AMOUNT ($__)

IV. Transfer Taxes Audit On the other hand, if the charge for the interest rate chosen increases, as shown in the example below:
Comparison of Good Faith Estimate (GFE) and HUD-1 Charges Charges That Cannot Increase HUD-1 Line Number
Our Orgination charge Your credit or charge (points) for the specic interest rate chosen Your adjusted origination charges Transfer taxes #801 #802 #803

Reg. X Appendix C provides as follows regarding transfer taxes: Block 8, Transfer taxes .-In this block, the loan originator must estimate the sum of all state and local government fees on mortgages and home sales that can be expected to be charged at settlement, based upon the proposed loan amount or sales price and on the property address. A zero tolerance applies to the sum of these estimated fees.

Good Faith Estimate

$3,100.00 2,000.00 5,100.00 150.00

HUD-1
$3,100.00 2,100.00 5,200.00 150.00

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Operations RESPA 2010 Audits

Accordingly, if there is an increase in transfer taxes on the HUD-1 as compared with the amount disclosed in the GFE, as shown in the example below: V. 10% Tolerance Audit According to Reg. X Appendix C: There is a 10 percent tolerance applied to the sum of the prices of each service listed in Block 3, Block 4, Block 5, Block 6, and
Comparison of Good Faith Estimate (GFE) and HUD-1 Charges Charges That Cannot Increase HUD-1 Line Number
Our Orgination charge Your credit or charge (points) for the specic interest rate chosen Your adjusted origination charges Transfer taxes #801 #802 #803

Good Faith Estimate

$3,100.00 -1,000.00 2,100.00 150.00

HUD-1
$3,100.00 -1,000.00 2,100.00 200.00

Block 7, where the loan originator requires the use of a particular provider or the borrower uses a provider selected or identied by the loan originator. As shown in the Charges That in Total Cannot Increase More Than 10% Comparison Table below, there is a 12.579% increase in the sum of the charges listed in the HUD-1 column as compared with the sum of the charges in the GFE column.
Charges That in Total Cannot Increase More Than 10%
Government recording charges #1201 Appraisal Fees #804 Credit Report #805 Title services and lenders title insurance #1101 Owners title insurance #1103 TOTAL Increase between GFE and HUD-1 Charges

the following audit will display: WARNING: CHARGE AMOUNT (#1203) EXCEEDS GFE AMOUNT; REDUCE CHARGE AMOUNT OR CREDIT BORROWER THE EXCESS AMOUNT ($__) Below is a screen shot of the audit based on the values shown in the above Comparison Table:

Good Faith Estimate

$250.00 50.00 1435.00 650.00 $2,385.00 300.00

HUD-1
$250.00 50.00 1735.00 650.00 $2,685.00 12.579%

or

Accordingly, the following audit displays: WARNING: CHARGES THAT IN TOTAL CANNOT INCREASE MORE THAN 10% EXCEED THE PERMISSIBLE 10% THRESHOLD BY ($__); REDUCE CHARGES OR CREDIT BORROWER FOR THIS AMOUNT

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Operations RESPA 2010 Audits

Note that the audit will return the actual amount by which the 10% threshold is exceeded. Below is a screen shot of the audit based on the values shown in the above Comparison Table: Note that the above audits will display individually depending on whether or not both GFE Initial Deposit and Lender Required elds are completed. VII. Title Charges - Policy Details Audit

VI. RESPA Impound Audit: GFE Initial Deposit/Lender Required Note that if a DocMagic user enters impounds and fails to enter a value in the GFE Initial Deposit eld shown below and fails to indicate whether or not the lender requires impounds:

The following audits will display: To assist with completing Lines 1105-1108 on page 2 of the HUD-1, the folWARNING: NO GFE INITIAL DEPOSIT AMOUNT DETECTED WARNING: ARE THE IMPOUND ACCOUNT(S) LENDER REQUIRED? lowing link has been added at the bottom of the screen in the HUD-1 tab of DocMagic (see next page):

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Operations RESPA 2010 Audits

When the link is clicked, the following pop-up screen appears:

DocMagic Complies with New RESPA Rule

(Published August 2011)
HUDs new rule makes technical corrections and adds clarifying amendments to GFE and HUD-1 requirements. Now that the new RESPA regulations have been in use for more than a year and we all have some experience with the new disclosures, HUD has identied a need for certain technical corrections. HUD has also identied certain regulatory provisions which require additional clarication. To address these issues, HUD issued a nal rule with an effective date of August 10, 2011. To facilitate compliance, the DocMagic Compliance Department has revised the programming of the HUD-1. The RESPA 2010 Audits, described here, have also been updated.

If the values in Lines 1107 and 1108 do not total the value of the Total title insurance premium eld in the above screen, the following audit will display: WARNING: AGENTS PORTION PLUS UNDERWRITERS PORTION OF THE TITLE INSURANCE PREMIUM MUST EQUAL THE TOTAL TITLE INSURANCE PREMIUM AMOUNT

The instructions for the HUD-1 indicate that If a service that was listed on the GFE was not obtained in connection with the transaction, pages 1 and 2 of the HUD-1 should not include any amount for that service, and the estimate on the GFE of the charge for that service should not be included in any amounts shown on the comparison chart on Page 3 of the HUD-1. Accordingly, if a charge has a GFE Amount greater than $0 and a Charge Amount

Note that there may be circumstances where a portion of the total title insurance premium is paid to a third party other than the title underwriter or title insurance agent, and therefore the sum of Lines 1107 and 1108 will not equal the total title insurance premium amount.

of $0, that charge will not appear on Page 2 of the HUD-1, and the GFE Amount will not appear in the Good Faith Estimate column of the Comparison Chart on Page 3 of the HUD-1. The Comparison of Good Faith Estimate that can be accessed from the HUD-1 tab of DocMagic Online has also been updated to reect this change. If the charge is subject to a 0% or 10% tolerance, DocMagics auditing system will not use the GFE Amount when

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calculating those tolerances.

Operations RESPA 2010 Audits

HUD-1 with Alternate Programming Available Upon Request (Published October 2011)
Feedback from our customers has made the DocMagic Compliance Department realize that there are at least two ways to interpret the RESPA Technical Corrections and Clarifying Amendments. To accommodate these two interpretations, DocMagic has created a version of the HUD-1 with alternate programming that can be implemented at the customers request. The instructions for the HUD-1 indicate that: If a service that was listed on the GFE was not obtained in connection with the transaction, pages 1 and 2 of the HUD-1 should not include any amount for that service, and the estimate on the GFE of the charge for that service should not be included in any amounts shown on the comparison chart on Page 3 of the HUD-1. As described in a recent Compliance Wizard article, DocMagics standard version of the HUD-1 (HUD1.MSC) is programmed so that if a charge has a GFE Amount greater than $0 and a Charge Amount of $0, that charge will not appear on Page 2 of the HUD-1, and the GFE Amount will not appear in the Good Faith Estimate column of the Comparison Chart on Page 3 of the HUD-1. However, we have learned that some customers and investors interpret this provision to apply only to charges that are literally listed on the GFE. As an example, an appraisal fee would be listed on the GFE, as would a credit report fee. By contrast, a settlement fee isnt listed on the GFE; neither is a lender title insurance fee, as these fees are rolled up into the Title Services and Lenders Title Insurance category, which is the listed fee. To accommodate this interpretation, DocMagics Compliance Department has created a version of the HUD-1 (HUD1.MSC-C) with alternate programming, which is programmed as described below. If an individual charge in one of the following GFE categories has a GFE Amount greater than $0 and a Charge Amount of $0, the charge description will I
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appear on Page 2 of the HUD-1 with no corresponding charge amount. The amount disclosed on the GFE will compute into the GFE column of the Comparison Table on Page 3 of the HUD-1, and the corresponding charge of $0 will be computed into the HUD-1 column: Origination Transfer Taxes Rate Credit or Charge Borrower Chosen Title Services Homeowners Insurance Title Services Borrower Chosen Escrow Account Deposit Government Recording Per Diem Interest If all charges with a category of Title Services or Title Services Borrower Chosen have an aggregate GFE Amount greater than $0 but an aggregate Charge Amount of $0, then a Charge Amount of $0 will appear on Page 2, and a line for Title Services and Lenders Title Insurance will not appear on the Comparison Table on Page 3. For charges in the following categories, if a charge has a GFE Amount greater than $0 and a Charge Amount of $0, that charge will not appear on Page 2 of the HUD-1, and the GFE Amount will not appear in the Good Faith Estimate column of the Comparison Chart on Page 3 of the HUD-1: Lender Required Owners Title Owners Title Borrower Chosen To implement HUD1.MSC-C in your account, please contact DocMagics Customer Service Department. Please note that DocMagics RESPA audits and the HUD-1 Comparison Table in DocMagic Online have been programmed to reect the logic on the standard form; as a result, customers who use HUD-1.MSC-C will be required to review the HUD-1 directly for compliance with the RESPA tolerances.

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Technology Business Continuity and Disaster Recovery at a Glance

Issue
Power Failure min. generator,

Mitigation Plan
The DocMagic Data Center is equipped with APC 30 KW N+1 UPS with up to 20 battery backup The DocMagic headquarters are protected with a 180 KW Kohler standby power equipped with ATS with automatic failover to standby power Power switching is automatic and takes less than 10 seconds Generator is fueled by diesel, with re-fueling contracts in place with multiple vendors, and can provide emergency power for over 7 days at 20% load Servers and Networking standardized on HP and Cisco Data storage standardized on NetApp and Compellent Each mission-critical server has redundant internal components Hot swappable RAID disk arrays with multiple controllers, eliminating single-point of disk failure High-end servers with load balancing for additional redundancy Fully meshed, multi-tier switching architecture Fully redundant Cisco core switching systems Backup (secondary) core switching capable of handling full network load Mission-critical servers have multiple paths to the network core to eliminate network failure from switch, NIC, or cable failure Data backed-up nightly to LTO tape and Online Disk array DocMagic stores twelve (12) months of data on backup tapes Tapes are removed and stored in Iron Mountain
Continued

Server Malfunction

Network Failure

Data Protection & Recovery

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Technology Business Continuity and Disaster Recovery at a Glance

Issue
Loss of Internet Connectivity

Mitigation Plan
Dual independent 100Mb Ethernet circuits feed the Data Center with combined total bandwidth of 200Mbps Additional high-speed Wireless WAN link providing 20Mbps Three separate Tier 1 ISPs supply each internet connectivity Dynamic and redundant internet routing using BGP4 protocol Automatic bandwidth utilization monitoring to increase capacity when needed Comprehensive re detection system that protects entire building Data Center protected by sophisticated re detection system, including high sensitivity smoke detectors (2,000 times more sensitive than traditional sensors), traditional sensors and heat detectors, triggering alarm, with FM200 re suppression agent 24X7 monitoring service with 10-minute response time dispatch to Fire Department for physical inspection of building Entire building equipped with automatic sprinkler system Data Center building is designed to withstand strong seismic activity Servers are housed in seismically-certied cabinets anchored for maximum stability Texas-based warm mirror site can be activated to take over all data operations if the primary Data Center is unable to operate Data replicated to this mirror site in real-time Disaster threshold for switching over to mirror site is 4 hours of continuous downtime, and mirror site can be fully operational within 15 minutes DocMagic tests the Business Continuity and Disaster Recovery Plan each year from end to end DocMagic periodically simulates loss of Internet connectivity to test fail-overs to redundant connectivity providers
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Fire

Earthquake

Testing of BC and DR Plan

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Partner with DocMagic To Manage Your Compliance

Thank you for selecting DocMagics eBook, Navigating the Regulatory Landscape . We think it offers a representative sample of what DocMagics Compliance Team can do for you now and in the future. We hope that you consider asking us to join you as your partner in mortgage compliance. If you would like more information and/or a demo on our compliance services, please dont hesitate to: Visit our website at www.docmagic.com. Contact us at 800-649-1362 or by email at sales@docmagic.com to start using DocMagics compliant mortgage documents There are NO Setup or Integration Fees!

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