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Latest Compliance - Bankruptcy Topics

Collection Communication for Demand Deposit Accts.

04/22/2018

Collection communication for demand deposit accounts (i.e., overdraft notices, NSF notices, request for payment, etc) - are we allowed to send ​such notices ​if we are aware of an active bankruptcy case? What if we are not made aware of the bankruptcy case?

Credit Reporting on Bankrupt Accounts

12/20/2015

We are dealing with the problem of credit reporting on bankrupt accounts. Our reporting is done at the loan level therefore non bankrupt co-borrowers are affected. Can we just suppress reporting?

Adverse Action Notices for Loan Declines

01/02/2012

If we have two applicants and one has excellent credit and one has bad credit and we decline the loan, is it required that we send out an Adverse Action Notice to the applicant with the good credit and indicate that the co-applicant does not meet the minimum standards?

Bank Responsibility: Refunding Provisional Credit

11/07/2011

REG E Question: A customer authorized a purchase for a product. The product has not been received and the customer contacted the company and found out that the company has filed for bankruptcy. Our customer then filed an unauthorized affidavit for his refund. Is the bank responsible for refunding the provisional credit when the customer did say in his response that he did authorized the purchase?

1099-C Cancellation of Debt - Personal Bankruptcy

11/16/2009

In the case of a personal bankruptcy, I noticed that the IRS rules say we are not required to file. Can we file anyway, and can we file at any time during the year, or should we wait until we prepare the 1098 statements?

Print Ad - Mortgage Lending Compliance

09/21/2009

One of our mortgage lenders would like to place an ad in the classified portion of the local newspaper. The ad reads: Have you filed bankruptcy or had your home foreclosed on in the past two years? Call [name] to get your credit checked. You may be eligible to purchase a home. Numerous programs available to be a homeowner again. Then she lists her name and cell phone. The bank is not mentioned. Does it need to be? Would this ad be considered compliant? What would make it compliant? Is this a bad idea?

Report Cancellation of Debt - Continue Collecting?

08/17/2009

If we report on a 1099-C cancellation of debt to the IRS, can we continue to pursue the debt or only accept voluntary payments? If we report, are we limiting ourselves on the possibility of recovery? I'm excluding bankruptcy issues. Can you provide the citation or source document information for further research?

HMDA Reporting - Loan Application Correction

06/11/2007

For HMDA reporting purposes, if a bank knows that information submitted by a prospective borrower on a standard residential loan application is not correct, can the bank modify the application itself or just leave it as is, which means the HMDA reporting would not be accurate? I am a regulator asking this question on behalf of one our bankers. He explained that his bank has noted errors and/or discrepancies throughout the application form, including: <ol><li>The borrower refinancing a present residence marks on the declarations that he or she has had no ownership interest in a property in the last three years. <li>The borrower indicates he or she has not filed bankruptcy in the past seven years but a credit report and public records indicate there has been a filing. <li>The borrower indicates he or she is both a U.S. citizen and a permanent resident alien. <li>A borrower indicates he or she intends to occupy the property as a primary residence but elsewhere in the application it is evident the property is for investment purposes. </ol>Perhaps the question about what to do on a loan application when these instances are discovered needs to be answered separately for each instance. I will relay your response(s) to my banker.

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TILA and RESPA: Pending Rules for Telling Customers What They Owe

Periodic statements are routine for open-end creditors. Both credit card customers and HELOC borrowers have been getting periodic statements for longer than most people can remember.

Escrow Account Rules

The CFPB used the final rulemaking on mortgage servicing as an opportunity to address and update several issues in the escrow rules of Regulation X.

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Most Popular Compliance Content

Real Estate Loan-Property Owner Is Trust Scenario

03/17/2019

Our borrower is an individual. The purpose of the loan is refinancing a first lien with another lender. The property owner is Trust. Is this acceptable and do you have any recommendations for dealing with this scenario?

Flood for Condo-No Replacement Cost on Building

03/17/2019

The maximum amount of flood insurance that can be purchased on a condo is 80% of the replacement cost of the building or the total number of units in the condo building times $250,000, whichever is less. What if there is no documented Replacement cost on the building, should we use the appraisal value as the basis of our calculation?

Bridge LE: Expedite w/ Investment Acct./TRID Loan

03/17/2019

We issued a Loan Estimate for a bridge loan to purchase a home to be secured with the purchase​d​ property and the applicant's current residence. Due to timing circumstances with the applicant and the sellers, the applicant now wants to expedite the purchase by using an investment account and use the TRID loan to get reimbursed. Can I use the same application and re-disclose the LE as a refinance or home equity purpose?

Credit Score Disclosure Exception Notice

03/10/2019

We recently switched credit bureau vendors. This vendor automatically includes the credit score disclosure exception notice with the credit report. We in turn provide this disclosures to those who apply for consumer credit. There are times when a lender will use a consumer report for a business purpose loan. If we provide the credit score disclosure exception notice on a business purpose transaction/application are we asking for trouble with examiners? Could we be subject to fines?

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