Question: Recently, I've been hearing that examiners are writing banks up for not including the survey fee for a construction loan in the finance charge.
This is a Lending and Compliance issue. We are a State Bank and Member of the Fed. We are in the process of beginning to offer a Automobile Extended Warranty Program. We have cleared the State, and are attempting to work through the Fed. The plan has been approved. However, we are having a disclosure problem. In my research, and information from the Warranty Company indicates that nobody is disclosing the upcharge on the contract as an Additional Finance Charge, which the Fed is indicating we need to do. The upcharge is $200.00 per contract, which really distorts the APR, if you disclose it as an additional finance charge. This is not an insurance product, but the product is insured. Any ideas on where to look and point the Fed to avoid having to disclose this as an additional finance charge?
1. True or False- In accordance with Reg Z, the disclosure of a finance charge would be considered accurate if the amount disclosed is greater than the actual final amount or if the amount of the finance charge disclosed is understated by $100.00 or less. 2. True or False- Prepaid escrows required by the lender for future payment of real estate taxes and hazard insurance premiums are considered finance charges for disclosure.
A conforming fixed rate, purchase money mortgage closed, and after a QC review it is discovered the amount financed was understated by $1,400+/-. The difference in the APR is .059%. Should the borrower be refunded the $1,400 to be in compliance with Regulation Z, or can a revised TIL be signed by the borrower?
Is the courier fee charged to the borrower to overnight the payoff of a mortgage considered a finance charge for Truth in Lending?
Question: Our mortgage department is making a purchase loan to a long-term customer. The customer needs a bridge loan to complete the sale and purchase transaction.
We are taking monetary hits for the cost of credit reports on Pre-approvals. Can we require a $20 up front fee to cover our costs? In addition, how must we disclose it since the reports range from $10 - $16 in actual cost?
Some questions recently arose about our OD protection plans and how they affect certain accounts that we offer.1. Our senior age is 50. Should we raise that to 62 or do we need to charge them the same for club checking that includes OD protection that we do for our other club members? 2. How does Reg Z affect the OD repayment plan? We offer customers 3 or 6 months to repay us.
Our bank does not have an overdraft protection program, however, we do, as a courtesy to our customers, make pay or return decisions on a case-by-case basis. We charge a fee for NSF items that are paid and a fee for NSF items that we return, however, the fee we charge for NSF paid items is $5 more than the fee for NSF returned items. Because we charge a larger fee for NSF paid items, is this fee considered a finance charge under Reg. Z?
Pre-paid finance charges. I argue that only Mortgage Broker and banking fees are PFC charges and that 3rd party fees (i.e. escrow, title, appraisal, etc) are not PFC's. What fees should be disclosed as PFC's?