Significant Update – Construction Loans

We have revamped the treatment of construction loans in the interview, as well as the construction loan agreement and construction reserve language. Previously, for many of our advanced users, we had enabled more complex construction loan language to be used. We have decided to make all of our construction loan agreements available to all users and permit all users to determine the appropriate forms of agreements to be used based on their loan scenario.

The following list highlights some of the bigger changes you will notice:

• Interview now focuses on type of construction to help guide your choice:

• Most transactions will fall in the “Standard” category while ground up will be the “Extensive” one.  Once you select the type of construction, the rest of the interview should look familiar. We do not recommend using “Simple Reserve” unless there is a single distribution of construction funds and the holdback is less than $50,000.
• We have also made various edits to the construction loan agreement to create easier to follow definitions throughout the agreement which affect the Standard and Extensive Construction Loan documents.
• More fully incorporated references to Construction Completion Guarantor throughout the documents, when relevant.
• Cleaned up some language for non-construction provisions, including adding definition of Lender Retained Funds, and changing references to “Secured Obligations in the impounds section to “Impositions.”
• Changed references to “Construction Holdback” in documents and interview to “Construction Reserve” for consistency.

Please note that if you are re-entering and modifying a previous loan interview, you must answer this new question, otherwise your interview will not be able to fully finish.

Other Updates

• Modifications to D.C. Security Instrument to include “Purchase Money” before “Deed of Trust” in the title of the document. See the screenshot below for a modification to the User Interface. Users will be required to identify whether the property is a purchase money property.

• We have added resource text (lightbulbs) when answering which Index is to be used for Adjustable Rate Loans. The resource text identifies the language that will be used for each different index available.  We also added 12 Month SOFR to the Index dropdown.  Also, we moved the LIBOR indexes to the bottom of the list, as they are less frequently used.
• Added payment addresses for loan servicer Selene.
• Style changes related to Impounds Accounts and related definitions.
• Updates to Indiana Security Instruments.
• Update to Nevada documents modifying certain statute references.
• Cleaned up some language for non-construction provisions, including adding definition of Lender Retained Funds, and changing references to “Secured Obligations” in the impounds section to “Impositions.”

New Lightning Docs User Guide

As a user, you likely received our original user guide which was developed years ago with our initial launch of Lightning Docs. As you and your team may have experienced, the guide looked different than the interface as it exists today.

Our Lightning Docs Team has been hard at work updating our user guide to match the current loan interview.

Scroll up or click here to view the new user guide. It is important to note that the previous guide contained licensing information that has not been updated since it was created and should not be relied upon.

Arizona, Pennsylvania, and Florida Updates

We have issued an update to the system which modified the following:

1. In Arizona, we added an address prompt to the interview to add the Trustee’s address to the Deed of Trust.
2. In Pennsylvania, we updated the Confession of Judgment Provisions in Note, Mortgage and Guaranty to make attorney’s fee percentage 10% and minimum fee $10,000 in all three documents.
3. In response to recent comments from Florida title companies, we have added a provision to the Florida Mortgage confirming that the subject property is not the constitutional homestead of the property owner.

Date Consistency Across Documents

We have issued an update to the system which modified the following:

Removed the requirement for borrowers to manually insert the document date in a variety of documents and instead dated those documents with the same date as the document date and made this change consistent throughout the document set. The following documents were affected:

• Hazard Insurance Disclosure
• Balloon Payment Disclosure
• Notice of Right to Receive Appraisal
• Affiliated Business Arrangement Disclosure
• Designation of Homestead
• Certificate of NOO
• Business Purpose of Loan Certification
• Fair Lending Notice
• Patriot Act Disclosure
• CA Borrower/Broker Statement
• AML Disclosure
• Occupancy and Financial Status Affidavit
• Borrower Cost Affidavit
• Notice to Debtors

Washington DOT, Third Party Security Instruments, Default Interest Revisions, and Pennsylvania Mortgage

We have issued an update to the system which modified the following:

Washington Deed of Trust

In a recent update, we added the ability to include the Lot, Block and Plat Section to the Deed of Trust in Washington.  The intent was to address a requirement that the first page of the Deed of Trust include the summary legal description of the subject property.  We quickly discovered that outside of title, it is incredibly difficult for a user to determine the proper description to include. Historically, best practice has been to rely on the title company to provide such descriptions.  In light of the difficulty being experienced, and the fact that title has added the summary legal description, we have removed this option to avoid confusion and mistakes by users.

Third Party Security Instruments

For those users that have requested access to third party security instruments, we have made the following updates to the security instrument:

1. Clarified references to the third party pledgor and borrower

2. Added third party pledgor waivers section

Default Interest Revisions

In light of the recent California Appeals court decision related to the charging of default interest, we have chosen to extensively modify the default interest section of our Promissory Note. Specifically, we have identified several specific ways mortgage lenders are damaged when the borrower defaults and how those harms are impossible to quantify at loan origination which is why an agreed-upon rate of default interest should apply.

Even though the case is a California case, we believe it is best practice to modify this section for all lenders and in all states to make it clear that the lender’s cost of funds has now increased due to borrower’s default. Therefore, this modification in language is a global change made to all Promissory Notes going forward.

Pennsylvania Mortgage

Edits to PA Note Addendum to remove duplicate reference to document date in the intro paragraph and numbering formatting.