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#1896984 - 02/13/14 07:17 PM
Re: HomeOwnership Counseling Notice
Alisha
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Joined: Apr 2009
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I thought you only had to give the list to HPML loans, not all loans. Do you have to give a list to all or just HPML? We are getting new software and it is only giving a phone number and email address to contact.
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#1896992 - 02/13/14 07:23 PM
Re: HomeOwnership Counseling Notice
Alisha
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You have to give the list on any RESPA loan. HPML status isn't your guide.
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#1896995 - 02/13/14 07:27 PM
Re: HomeOwnership Counseling Notice
Alisha
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Joined: Apr 2009
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thanks for clearing that up.
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#1896996 - 02/13/14 07:27 PM
Re: HomeOwnership Counseling Notice
Brenda
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Cape Cod
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I thought you only had to give the list to HPML loans, not all loans. Do you have to give a list to all or just HPML? We are getting new software and it is only giving a phone number and email address to contact. If the loan is subject to RESPA, you have to provide a notice under Regulation X, section 1024.20. Reg Z has two requirements that homeownership counseling be obtained before closing, not that the list of counseling organizations be supplied. One is for HCMLs under 1026.34(a)(5) [not HPMLs] and the other is for first-time borrowers in connection with a closed-end transaction secured by a dwelling, other than a reverse mortgage or a transaction secured by a consumer's interest in a timeshare plan, that may result in negative amortization. Simplifying -- The list goes to all applicants for RESPA-covered loans; pre-closing counseling is required for only some borrowers.
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#1905456 - 03/14/14 03:30 PM
Re: HomeOwnership Counseling Notice
Alisha
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Joined: Jun 2009
Posts: 89
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So just to confirm - even if the loan is not a HOEPA loan, if it falls under RESPA we are still required to provide the list, correct?
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#1905458 - 03/14/14 03:31 PM
Re: HomeOwnership Counseling Notice
Alisha
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Yes.
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#1905464 - 03/14/14 03:38 PM
Re: HomeOwnership Counseling Notice
Alisha
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#1905607 - 03/14/14 06:31 PM
Re: HomeOwnership Counseling Notice
Alisha
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Member
Joined: Jun 2009
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Ok, so it turns out we have not been providing the notice to our applicants as we should have been. Should we send now after-the-fact to all applications that came in after 1/10/14?
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#1905611 - 03/14/14 06:41 PM
Re: HomeOwnership Counseling Notice
Alisha
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It might not hurt (although for the loans that already closed, it wouldn't really help in any way either), but i don't think providing them after the fact does anything to "fix" the problem. If i were dealing with it, i think i'd do more training, document the fact that your bank hasn't been doing it correctly for the first couple of months, and be sure to test in the upcoming months that it is now being done correctly. JMHO.
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#1905614 - 03/14/14 06:45 PM
Re: HomeOwnership Counseling Notice
Alisha
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I think we'd probably send them with a brief letter explaining that they were missed from the original disclosure package. Then I'd document the problem, update procedures, retrain, and yes, as rj said, test in the future to make sure the problem has been fixed. Keep a file with all of this, because you'll want to have explanations ready for your auditor/examiner. They will appreicate that you self-identified and fixed the issue.
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#1905633 - 03/14/14 07:05 PM
Re: HomeOwnership Counseling Notice
Alisha
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Joined: Jun 2009
Posts: 89
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Yes, I think we'll do just that. Thanks both.
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#1905814 - 03/17/14 01:47 PM
Re: HomeOwnership Counseling Notice
Alisha
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Joined: Aug 2002
Posts: 47,532
Bloomington, IN
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Should we send now after-the-fact to all applications that came in after 1/10/14?
What would this accomplish? It won't cure the violation and it serves no purpose for the borrower after they've already obtained the loan.
I'd recommend just doing the following:
document the problem, update procedures, retrain, and yes, as rj said, test in the future to make sure the problem has been fixed. Keep a file with all of this, because you'll want to have explanations ready for your auditor/examiner. They will appreicate that you self-identified and fixed the issue.
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#1906672 - 03/19/14 03:13 PM
Re: HomeOwnership Counseling Notice
Alisha
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Gold Star
Joined: Aug 2007
Posts: 298
Kansas
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We are having the borrowers sign an acknowledgement that they received the notice, but are not retaining the actual notice. Thoughts on record retention for this notice?
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#1906676 - 03/19/14 03:15 PM
Re: HomeOwnership Counseling Notice
Alisha
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We are keeping both in order to show that we printed the notice on a 'good' date and not just printing the notice once and using the same (stale) notice over and over.
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#1906781 - 03/19/14 05:57 PM
Re: HomeOwnership Counseling Notice
Alisha
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Galveston, TX
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Unless you are meeting some sort of investor requirement both are overkill in my mind. Address how you pull the disclosure in your written procedures and list the disclosure in your original cover letter to the applicant(s) that lists all the other disclosures given/mailed to the customer within 3 business days.
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#1907024 - 03/20/14 02:41 PM
Re: HomeOwnership Counseling Notice
Alisha
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Posts: 40,086
Cape Cod
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Amen to ^^^^. Mortgage document files are overstuffed enough as it is without adding such CYA documentation.
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John S. Burnett BankersOnline.com Fighting for Compliance since 1976 Bankers' Threads User #8
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#1907067 - 03/20/14 03:32 PM
Re: HomeOwnership Counseling Notice
Alisha
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The Swamp
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I agree to a point, but it makes it impossible to test compliance with the procedures if we don't have some type of checkpoint.
At this point in time, I'm asking that they keep a copy of the list. It gets imaged in with the rest of our early disclosure package. I figure virtual space is not that big of a deal.
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#1907096 - 03/20/14 04:20 PM
Re: HomeOwnership Counseling Notice
Alisha
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Posts: 83,393
Galveston, TX
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but it makes it impossible to test compliance with the procedures
Why?? When you are doing your testing have them deliver a copy of the initial disclosure package on several loans to you for audit purposes. Testing complete.....
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#1907226 - 03/20/14 06:47 PM
Re: HomeOwnership Counseling Notice
rlcarey
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a copy of the initial disclosure package That was kinda my point. How do you propose to have a copy of the initial disclosures without a copy retained...somewhere?
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#1907295 - 03/20/14 07:56 PM
Re: HomeOwnership Counseling Notice
Alisha
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Joined: Jul 2001
Posts: 83,393
Galveston, TX
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How about from a couple of current loans in the pipeline? Or just tell them to keep a copy of them for a week. It can't be that tough.
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#1907305 - 03/20/14 08:17 PM
Re: HomeOwnership Counseling Notice
Alisha
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The Swamp
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I get where you are coming from, Randy, but it totally flies in the face of actual proof. If I asked the processing staff to save me a few...don't you think they are going to be jam up and jelly tight? It's not worth my time reviewing if they have been forewarned. Personally, I know they are doing it correctly...but that doesn't hold water in a formal review, in my honest opinion.
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My opinion only. Not legal advice. Say you'll haunt me - Stone Sour
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#1907326 - 03/20/14 09:02 PM
Re: HomeOwnership Counseling Notice
Alisha
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Joined: Jul 2001
Posts: 83,393
Galveston, TX
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Show me where that compliance cannot be proven through procedural documentation and requires you to retain copies, and I'll change my tune. Until then, I'll stick by it is a waste of time.
Outside of 12 CFR 1024.10(e) and 12 CFR 1024.38(c)(1) there are no specific retention requirements in RESPA.
What are they going to cite you under?
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#1907332 - 03/20/14 09:04 PM
Re: HomeOwnership Counseling Notice
Alisha
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Posts: 40,086
Cape Cod
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"...flies in the face of actual proof."
I don't know where that standard was developed, but it's not required in the regulations, nor is it mandated in exam procedures that I have seen.
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John S. Burnett BankersOnline.com Fighting for Compliance since 1976 Bankers' Threads User #8
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#1907380 - 03/21/14 12:27 PM
Re: HomeOwnership Counseling Notice
Alisha
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Joined: Nov 2002
Posts: 20,656
The Swamp
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That would be fine if we opted to use the 'temporary' form...the print date would exist.
At least here, we are not using that, we are giving the list off of the website so no other evidence of a list within 30 days exists.
It might be overkill and I understand it's not required by regulation, BUT, it's a new requirement and I prefer to make sure it's being done correctly...so a copy it will be until further notice by me!
Regarding surprise checks of packages about to go out the door...I supervise that area, so, at least in my situtation, I feel a little more due diligence is needed.
Sorry, just felt a little more explanation was needed. Everyone's situation is different and must be handled how they feel best.
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My opinion only. Not legal advice. Say you'll haunt me - Stone Sour
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