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#1394671 - 05/21/10 04:22 PM Risk-based pricing (FACTA 1/1/11)
cloudy Offline
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Can anyone tell me the benefit to using the exception notice for 1 -4 family instead of just doing the score proxy and giving out the risk-based notice to my mortgage customers?

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#1394780 - 05/21/10 06:45 PM Re: Risk-based pricing (FACTA 1/1/11) cloudy
Ted Dreyer Offline
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If you use the regular RBP disclosure, you have to determine who is supposed to get it according to complicated rules. If you use the exception form, you just give it out to everyone and don't have to worry about figuring out who should get one.

In addition, the exception notice contains the FACT Act Credit Score Notice and Notice to Home Loan Applicants information. Since you have to give those out anyway, you're just combining those disclosures into one new form.

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#1394788 - 05/21/10 06:55 PM Re: Risk-based pricing (FACTA 1/1/11) cloudy
cloudy Offline
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Thank you for responding.

I have another question for you. The exception for 'other extensions of credit' not 1 - 4 family, is that everything else? So we could give this out to all our personal loan customers and not give ANYONE the risk-based pricing notice?

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#1394869 - 05/21/10 08:39 PM Re: Risk-based pricing (FACTA 1/1/11) cloudy
Ted Dreyer Offline
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That's everything else except for a situation where the consumer has no credit score, then you use form H-5.

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#1394876 - 05/21/10 08:55 PM Re: Risk-based pricing (FACTA 1/1/11) cloudy
cloudy Offline
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Thank you so much!!!

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#1395047 - 05/24/10 01:27 PM Re: Risk-based pricing (FACTA 1/1/11) cloudy
dkm1982 Offline
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I have heard that if you do not obtain a credit score on your credit reports you do not have to provide the Risk-based Pricing notice. Is this correct?

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#1395065 - 05/24/10 02:06 PM Re: Risk-based pricing (FACTA 1/1/11) dkm1982
Ted Dreyer Offline
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Not necessarily. The general rule in the regulation is that if you use a consumer report to set material terms for loans you need to give one.

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#1395123 - 05/24/10 03:58 PM Re: Risk-based pricing (FACTA 1/1/11) Ted Dreyer
dkm1982 Offline
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Thanks!

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#1396788 - 05/26/10 09:31 PM Re: Risk-based pricing (FACTA 1/1/11) dkm1982
Jan94 Offline
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The final rules indicate that a notice would not need to be given to a guarantor. Is this mainly in reference to business loans where this requirement is not applicable or is it also excluding a co-signer/guarantor on a consumer loan? Thank you.

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#1400405 - 06/07/10 09:34 PM Re: Risk-based pricing (FACTA 1/1/11) Jan94
Queen Mum Offline
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OK
Do you have a link to that Exception Notice?

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#1403059 - 06/13/10 07:57 PM Re: Risk-based pricing (FACTA 1/1/11) Queen Mum
jlroberts Offline
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I downloaded the final rule and did a "find".

http://edocket.access.gpo.gov/2010/pdf/E9-30678.pdf

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#1406839 - 06/22/10 08:04 PM Re: Risk-based pricing (FACTA 1/1/11) jlroberts
Still Smiling Offline
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Just thought I would share;

I spoke with our credit bureau representative and she said they would be providing the exception notices along with the credit report. I don't have details yet, but this will sure make it easier.
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#1406840 - 06/22/10 08:11 PM Re: Risk-based pricing (FACTA 1/1/11) Still Smiling
Queen Mum Offline
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OK
Who do you use?

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#1406863 - 06/22/10 08:36 PM Re: Risk-based pricing (FACTA 1/1/11) Still Smiling
ktac MITCH Offline
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Giant side of TX
Originally Posted By: Still Smiling
Just thought I would share;

I spoke with our credit bureau representative and she said they would be providing the exception notices along with the credit report. I don't have details yet, but this will sure make it easier.


I anticipate that the Big 3 Credit Reporting Agencies will offer to provide the Notice when you obtain a credit report - Just as you can receive the "Notice to Home Loan Applicant" now.

BUT - You need to have plans to provide the notice with an alternative "in-house" method, in cases where you have an application or loan and you do not pull a new credit bureau but rely on a "Current" one that you already have.
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#1406886 - 06/22/10 09:01 PM Re: Risk-based pricing (FACTA 1/1/11) ktac MITCH
Still Smiling Offline
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We use equifax.

ktac, I never thought of that...thanks so much for the tip.
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#1408231 - 06/25/10 03:36 PM Re: Risk-based pricing (FACTA 1/1/11) Ted Dreyer
kmg Offline
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Ted, hopefully you can help because I don't think my bank's situation is addressed by the regulations or the model forms.

We don't obtain a credit score for in-house loans, but some risk based pricing does occur on a case by case basis based on the information in the credit report. I'd like to give a generic notice to everyone, but the "exception" model forms want a credit score. I don't think we can use the "risk model" forms because we don't have a formal risk model or matrix.

Any ideas?
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#1408265 - 06/25/10 03:59 PM Re: Risk-based pricing (FACTA 1/1/11) kmg
Ted Dreyer Offline
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The only thing that comes to mind is that you may want to start getting a credit score on all loans just for compliance purposes.

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#1408335 - 06/25/10 04:58 PM Re: Risk-based pricing (FACTA 1/1/11) Ted Dreyer
kmg Offline
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WOW, I hope you're joking.
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#1420029 - 07/27/10 02:26 AM Re: Risk-based pricing (FACTA 1/1/11) kmg
Jan94 Offline
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USA
If I'm reading the final rules correctly, the credit score notice is not required for co-signers or guarantors as the explanation is that a co-signer is merely for support. However if the applicant is declined but subsequently obtains a co-signer who is approved, shouldn't the co-signer get the notice in this instance?

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#1422747 - 08/02/10 04:49 PM Re: Risk-based pricing (FACTA 1/1/11) Jan94
ahou Offline
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ahou
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For increases in the APR due to account reviews, a seminar speaker said you can't use the exception notice. Has anyone else heard this?
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#1422764 - 08/02/10 05:12 PM Re: Risk-based pricing (FACTA 1/1/11) ahou
ahou Offline
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ahou
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Found the answer in the preamble.

The Agencies do not believe that the reasons for permitting exception notices in lieu of risk-based pricing notices apply in the case of account review notices.
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#1423399 - 08/03/10 04:25 PM Re: Risk-based pricing (FACTA 1/1/11) Still Smiling
Irishguy Offline
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Kentucky
Originally Posted By: Still Smiling
We use equifax.

ktac, I never thought of that...thanks so much for the tip.


We use Transunion and our rep stated that they would not be providing the notice. Has anyone heard any differenlty on this matter from Transunion?

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#1423581 - 08/03/10 07:35 PM Re: Risk-based pricing (FACTA 1/1/11) Irishguy
Way Out West Offline
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San Francisco
Quote:
We use Transunion and our rep stated that they would not be providing the notice. Has anyone heard any differenlty on this matter from Transunion?


As I understand the material I've seen from TransUnion, TU will provide subscribers the info necessary to comply with the score distribution disclosure requirements (either the graph or the text disclosure) but is not going to provide a fully completed model form H-3 or H-4; i.e., something that you can just "tear off" a give directly to the customer. And obviously, the new data would be in addition to the info currently provided to comply with the Notice to the Home Loan Applicant requirements. So lenders will have to generate their own exception disclosures.

Does that answer your question? Or did that answer your question, but it wasn't the one you wanted to hear?
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#1423707 - 08/03/10 09:19 PM Re: Risk-based pricing (FACTA 1/1/11) Way Out West
Irishguy Offline
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Kentucky
It helped a bit but it was not the answer that I wanted! smile

I've already started working on plan "B." We use Laser Pro and Harland is going to make the form available trough Laser Pro. Looks like we will be making our own.

I also believe our Transunion rep said that they were going to stop providing the Consumer Credit Score Disclosure that they had been producing for us.

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#1423826 - 08/04/10 12:18 PM Re: Risk-based pricing (FACTA 1/1/11) Ted Dreyer
Game On Offline
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Marietta, GA
1-Still a little confused about the Alternate Notice. If we use that one rather than the risk based notice would we still only provide the notice to those consumers applying for products that are risk rated or would this be provided to all consumer applicants where we used a credit report?


2- If an Indirect Auto loan is closed in our name at the dealership do we send the notice to dealer to provide to the consumer? It seems like that could make us a credit reporting agency by sharing that notice with the dealer. Also, the dealer's can try to get a better rate even though they know what rate we set- the difference goes to the dealer. Not sure how to handle this one!
How do some of you plan to address this issue?

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