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.
01/30/2012
If we are taking land but not the manufactured home the customer lives in on the property, is there a rescission?
01/16/2012
I have a customer who applied for a loan to purchase unidentified investment property (a house) at a Sheriff Sale. He did not have a specific property in mind but just wanted the money in case he found something he wanted. This did not involve a pre-approval. The collateral for this loan was his vehicle. The application was ultimately denied. I need to know if this is HMDA reportable? The purpose was to purchase an investment home using his vehicle as collateral (which would mean for lien status we would choose "not secured by a lien". When inputting this to our CRA Wiz program we came up with validity edits for lien status and loan purpose. Can you help us determine if this is or is not reportable?
01/02/2012
On page 13 of the handout for the new federal regulations, the 7th paragraph states "...the claim may serve as a continuing lien against future deposits that do not involve "benefit payments...". <i>Federal Register</i> Volume 76 Issue 36 page 18 paragraph 4 states "A small number of States authorize the issuance of a "continuing" garnishment order, i.e., an order requiring the garnishee to monitor, preserve and remit funds coming into the garnishees custody on an ongoing basis. The rule operates to prohibit a financial institution that is served with a continuing garnishment from complying with the order's ongoing requirements." My questions are: Do we monitor the account for 30 days as the garnishment states for deposits that are not protected funds? On page 9 of the same volume in the 8th(?) paragraph it states "The Agencies intend ... to ensure that after a garnishment order is received, the account holder continues to have the same degree of access to the protected funds that was provided prior to the receipt of the order." Does that mean that we cannot leave a hold on the account to avoid withdrawal of unprotected funds, still covering checks with protected funds? Also, would suspending the customer's debit card be against this?
10/03/2011
What are the rules for holding funds on an account when the bank receives a lien? Can they hold it for more than what is in the account?
07/18/2011
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?
07/18/2011
We received a Continuing Lien from the State of Washington/Department of Revenue. We have branches in Oregon and Washington. The lien was served on an Oregon customer and delivered to one of our Oregon Branches. Our question is, should this lien have been sent to our WA branch for the lien to be valid? Or does it not matter in this case?
07/11/2011
The following statement is in several reference materials on HMDA. "If the institution is unconditionally obligated to refinance the obligation, or if the institution is obligated to refinance subject to conditions within the borrower's control, the transaction is not HMDA reportable." What does these mean? First they state "unconditionally" obligated, then or "obligated with conditions". Can you clarify?
05/30/2011
I have a home improvement loan, which I am securing with a title lien on the vehicle. Do HMDA and HOEPA apply?
05/23/2011
We're processing a 1-year, interest monthly bridge loan, in which we are taking a 1st lien on the homestead being purchased, and a 2nd lien on their existing home which is currently for sale. Is Right of Rescission required on this transaction?