SALT LAKE CITY, Utah /eNewsChannels/ — International Document Services (IDS), a mortgage document preparation vendor, integrated risk-based pricing notices into the idsDoc system on January 1, 2011, per the deadline set in the December 2009 final ruling by the Federal Trade Commission (FTC) and the Federal Reserve Board (FRB).
The rules, which went into effect on January 1, 2011, require lending institutions to notify customers when they are receiving a higher interest rate and the reasons why. Of the five model forms provided by the FRB and FTC, the H-1 and H-3 forms have been made available to lenders in the idsDoc system, as the other notices pertain to account reviews (H-2), loans not secured by residential property (H-4) and instances where no credit score is available for a consumer (H-5).
“As the nation’s focus shifted to the public’s lack of knowledge regarding credit and financial instruments, disclosures, and their use by lenders, the need for education became much more important to regulators and consumer advocacy groups alike,” said Curt Doman, president of IDS. “As a docs provider, it is our duty to not only make these forms available within our system, but also to provide our customers with the guidance and education on the correct usage of these new forms.”
The H-1 form is used when, based on a borrower’s credit report, the lender grants credit to a borrower on terms that are “materially less favorable” than the “most favorable” terms it provides to a “substantial portion” of its customers. The H-3 form functions as an “exception” to the foregoing analysis because it may be provided “for loans secured by one to four units of residential real property.”
The H-1 form must be provided “before consummation” but “not earlier than the time the approval decision is communicated” to the borrower. Alternatively, the H-3 form may be provided “at or before consummation” or “as soon as reasonably practicable,” which is generally understood to be within three business days of obtaining a credit score. IDS customers have the option to include the H-3 form in closing, re-disclosure, or initial disclosure document packages.
About IDS Inc.:
IDS is a nationwide provider of mortgage documents and compliance. IDS services include closing documents, reverse documents, initial disclosures and fulfillment. IDS’s solution, idsDoc, is recognized in the industry for its ability to be customized to meet specific lender needs. IDS backs the system with unsurpassed customer service, cutting-edge technology, compliance and document guarantees and a solid compliance team. Lenders looking to move forward when it comes to doc prep can visit the IDS Web site at www.idsdoc.com or call 800.554.1872.
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