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Latest Compliance - Lien Topics

Violation of Reg O Executive Officer Mortgage Prop

04/15/2013

Regulation O-we have an executive officer who has a first lien mortgage on his primary residence. He thought this residence was sold, and purchased another property which he mortgaged with us. The first property sale fell through so currently both properties are on the bank's books. I assume we are in violation but would like some verification.

Reg Z Escrow for Separate Tracts of Land

02/11/2013

I understand that Reg Z requires us to set up an escrow account for loans that qualify for HPML. If the security is made up of separate tracts of land and only one of the tracts includes the first lien on a principal dwelling are we required to escrow for taxes and insurance on the other tracts of land?

HMDA Reporting for Property Purchased w/Cash

09/03/2012

A question was previously posted in regards to HMDA Reporting for Property Purchased with Cash. Specifically, the question states: "We have a business customer that purchases property for cash, then applies for a mortgage loan using the property as collateral. Is this a HMDA reportable loan or not; if so, what is the purpose? He is not improving the properties. Should we consider this a refinance?" The answer provided states that it is not a refinance. However, it does not specify if its considered a purchase or if it is not HMDA reportable at all. Please let me know if this is HMDA reportable and if so, if it considered a purchase.

HMDA Reg C "Approved Not Accepted"-Which Amount

07/30/2012

HMDA - Reg C In the HMDA GIR it is very clear that on loans that are declined or withdrawn, you report the loan amount based on what the terms the borrower originally applied for. For counter offers, it is very clear if the counter offer is not accepted, to report the original loan amount. I cannot find any reference on Approved Not Accepted. My example: Borrower applied for a refinance of $100,000 (no cash out). Later that day, I discovered that pay-off on existing lien is less than $100,000 and I requested that the loan amount be changed to $98,000. The loan was fully approved by the lender. The borrower decided not to refinance. We reported the loan as approved not accepted. What loan amount is reported? We did not approve the $100,000 and this loan amount would have created a cash-out with different guidelines. We fully approved the $98,000.

Flood Policy Required-Abundance of Caution Lien?

06/18/2012

We have an existing unsecured loan that we are going to take "abundance of caution" liens on 2 improved properties (which also secure other debt with us and we are in the priority lien positions). One house is located in a flood zone. There is NO new money involved. Are we required to obtain a flood policy?

Disclosures for Consolidating 2 Home Equity Loans

05/07/2012

We have a customer with two home equity loans secured by a third and 4th lien. We want to consolidate these into one loan with a small principal payment instead of the current interest only payments. There is no new money. What Disclosures (TIL, RESPA) are required?

Higher Cost Loan Regulation for Renovation on Prop

02/06/2012

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 – 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 consumer’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: HELOC’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 isn’t a construction from the ground up, it’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.

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Opening Online Acct. & Funding w/ACH Debits

06/16/2019

Our digital channel team would greatly appreciate your comments and confirmation of our understanding in order to comply with online account opening and funding for new clients with ACH Debits and the ability to hold funds. The questions below relate to an online account opening process for new clients. After completing the online application, approved clients have the option to fund their new account with funds from an external source – an account they hold at another bank - via an ACH Debit and we are the ODFI. 1. Can we place a hold on the initial funds received as an ACH Debit? Our understanding is “yes” because: · an ACH debit does not fall under the definition of an electronic payment under Reg. CC (II.Section229.2 Definitions (p)) Electronic Payment, which imposes no availability requirement, and we are free to hold the funds for a period that we determine. Restricting access to those funds would be reasonable to allow for the debit entry to reach the RDFI and be returned to our bank, the ODFI, if there is a problem. · We are not receiving an ACH credit as we are the ODFI of the ACH debit, and NACHA has no say in when we credit the new account, so there would be no violation of NACHA rules.</ul> 2. Would we be required to provide a hold notice to our online account applicant of the delay in availability or a notice at the time the external funding option is selected that the funds may not be credited to the account for “2-3 days”, or available for “2-3 days” suffice? Our understanding is: · a notice that indicates funds may not be available for x days at the time the customer selects the external funding option and submits their authorization should suffice as it becomes part of our agreement when the customer selects that funding option. · Reg. CC does not impose an availability requirement for ACH Debit transactions, so no Reg. CC hold notice is required. 3. Would our Reg. CC Policy – Funds Availability Notice, need to be updated to refer to availability from ACH Debit transactions? · Model language is silent in this regard, any recommendations or suggestions are welcome.

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