FACTA - Waiving Disclosure & Notice to Homeowner - Mary Beth Guard

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FACTA - Waiving Disclosure & Notice to Homeowner
Mary Beth Guard, BOL Guru
Guru BIOS

Question: Under the FACTA, if a residential mortgage loan applicant has no credit score (a non-resident alien, for example), would the Notice to Homeowner and disclosure requirement be waived?

Answer: It's not that the requirement is "waived" -- it simply is not applicable. The requirement applies only if the lender uses a consumer credit score in connection with an application initiated or sought by a consumer for a closed end loan or the establishment of an open end loan for a consumer purpose that is secured by 1 to 4 units of residential real property. Since a credit score is not being used in your example, the disclosure need not be given.

See Section 212 of the FACT Act.

First published on BankersOnline.com 07/04/05

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