Over the last few weeks, we made several announcements related to the Uniform Closing Dataset (UCD) and Loan Closing Advisor®. To help you strategically plan and prepare for system impacts, here is what’s to expect:

Revised UCD Specification Impact Memo

Freddie Mac and Fannie Mae (the GSEs) published the revised UCD Specification Update Impact Memo on July 26, 2022, providing additional clarity on upcoming changes that will impact Loan Closing Advisor:

  • Loan Closing Advisor Accepting Enact Mortgage Insurance Corporation                                                            On August 1, 2022, Loan Closing Advisor will require “Enact.” Warning messages will be returned for files containing Genworth Mortgage Insurance Corporation. Refer to the Loan Closing Advisor August 1 Release Notes for the new and revised messaging.

  • New QM Short Term ARM Data Point                                                                                                                          Effective May 1, 2023, the new Qualified Mortgage (QM) Short Term adjustable-rate mortgages (ARM) data point will be required in the UCD XML file submitted to Loan Closing Advisor for all ARMs meeting the definition in the Single-Family Seller Guide (Guide) Bulletin 2021-19. To help lenders prepare, the data point can be accepted in Loan Closing Advisor today.

    • Data Point: gse:QualifiedMortgageShortResetARM_APRPercent 

    • Definition: The annual percentage rate for the loan based on the accepted industry standard defined by Regulation Z (Section 12 C.F.R. § 1026.43(e)(2)(iv)) used for QMs that have an interest rate change within the first five years after the date on which the first regular periodic payment is due (e.g., 3/6 and 5/6 Month SOFR-indexed ARMs).

  • Addition of Valid Values for Taxes and Other Government Fees                                                                                We are expanding the UCD-supported enumerations for Closing Disclosure (CD) Section E. Taxes and Other Government Fees for Phase 3 UCD Critical Edits to support recording fees, transfer taxes and other government fees that are not currently supported by UCD v1.5.

  • Differences Between UCD Critical Edit Matrix and UCD Specification                                                                     We are aware that the results of UCD critical edits transition project lead to modifications to the UCD Specification v1.5. Clients should refer to the UCD Specification Impact Memo to review a comprehensive list of these differences.

New Loan Closing Advisor QM Rule-Related Critical Feedback Messages

We added six new critical edits and messages to Loan Closing Advisor on April 13, 2022, notifying clients that the data submitted in the UCD XML file indicates that the loan’s points and fees exceed the allowable Regulation Z Total Points and Fees. These critical edits continue to fire in Loan Closing Advisor. Refer to the Loan Closing Advisor April 13 Release Notes.

Revised UCD Critical Edit Transition Timeline 

Announced on May 31, 2022, the new implementation dates for UCD Critical Edits converting from “warning” to “critical” in Loan Closing Advisor are:

  • Phase 3: May 1, 2023
  • Phase 4: November 6, 2023

We will notify you when the Phase 3 warning edits are available in the Loan Closing Advisor customer testing environment (CTE) and production for testing.

Available Resources

Ensure you are checking the Loan Closing Advisor and UCD pages for the most recent resources to help your organization prepare for upcoming changes: