I have a question regarding the government monitoring information requirements under Section 202.13 of Reg B</a>. We are not a HMDA reporting bank. If we were to do a home equity loan for a customer and then that same customer requested additional money on that home equity (or a refinance), would you then at that point be required to collect government monitoring information?
We have a client who currently owns their primary residence and they are wanting to do a major renovation to the property The bank is looking at extending them a future advance â€“ non-revolving loan for 12 months. The loan will be used to pay-out the 1st lien holder and provide funding for the renovations. We have a conditional permanent take out for the loan upon completion and/or the maturity of the loan. Monthly payments will be interest only during the 12 months- renovation phase. The regulation states a Higher Cost loan is: a closed end loan, secured by a consumerâ€™s principal dwelling, for consumer purpose and has an APR exceeding the average of prime offer rate by 1.5% for a 1st lien or 3.5% for a subordinate lien. It excludes: HELOCâ€™s, reverse mortgages, construction only loan and bridge loans with a term of no more than 12 months. Due to some of the variables of our scenario, we are unsure how to treat it. This isnâ€™t a construction from the ground up, itâ€™s not a revolving credit and the permanent take out that we have is conditional. We have conflicting opinions on how this particular situation fits in with the reg. The biggest difference is in how we treat it, on whether or not we have to have the taxes and insurance escrowed during that 12 month period. Our bank does not escrow for any other loans other than Higher Cost Loans which we are required to. Any insight you can offer will be greatly appreciated.
We have a customer who refuses to get Flood Insurance for their home equity loan. I let our loan officer know that without the coverage we could not originate the loan. Our loan officer has decided that we will get the insurance for the customer with the same company we force place with and take the premium out of our customers loan proceeds. Can we actually do this?
I recently attended a Harland Laser Pro Regional Conference. It was indicated that the SAFE ACT states that mortgage lenders must register for a NMLSR. Does this include loan officers that just take Home Equity Loan and HELOC applications?
Is verification of income required on a home equity line of credit? If yes, is there a maximum DTI that the lender should not go beyond?
What are the rules for reporting Consumer Loans on Land for CRA purposes? More specifically, would you use the geo info of the consumer or the land being bought or refinanced?
For CRA, if you book a loan in Feb 2010 for $10,000 and then renew that loan for $15,000 in June 2010, you would report the $10,000 loan for February and then report the $5,000 new money for June as two separate loans. Does this also apply for HMDA with home equity loans? Would you report only the new money the second time? Would you only report one?
A local attorney has informed one of our bank officers that the SAFE Act would require a lender to be a registered mortgage loan originator in order to close loans for lot purchases (land only). I haven't heard that in any of the seminars I have attended. Is this true?
In a first lien home equity loan against a dairy and primary residence where the funds are to pay commercial taxes, not for a consumer purpose, would the escrow requirements under the HPML come into play?
Under the new Reg Z requirements for Higher Priced Mortgage Loans, I understand that home equity lines are exempt. Am I correct? If so, what are the rate and term restrictions for a closed end line?