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Lending Compliance
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Is anyone still 'manually' running GSA/LDP checks on all parties associated with a loan application? If so, what reference are you using for your procedures?
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Deposits and Payments
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Thank you everyone. This is very clear. We will continue with our current practice of requesting, but not requiring, written notification of error, and will provide these citations to our auditors
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Chat! - BOL Watercooler
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Like A Rocket - The Reverend Horton Heat
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Chat! - BOL Watercooler
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Ditto!
What happened to the flu since Covid? Never really hear about that these days...
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BSA/AML/CIP/OFAC Forum
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my guess is to OFAC both sides of the transaction
I would be. When it comes right down to it, since this is a trick to avoid Federal taxes, I would think that the bank would want to know exactly who they are dealing with all the way around.
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Need to Remain Anonymous
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Re: WFH
by ACBbank
@ 09/06/24 08:10 PM
I am going to second what Happy posted. No one is working 24/7/365. That's nonsensical and sets unrealistic expectations. If non-officers worked above their forty hours, overtime would kick in, and budgets across our shop be destroyed.
Even Officers have enough common sense and don't bother people after hours, unless it's absolute time sensitive matter or an emergency. There are very few emails that need a response at 11 PM, as opposed to 8 AM.
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Lending Compliance
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The black hole fix was actually proposed at the same time the final TRID 2.0 rule was published and was finalized separately, so it's technically not part of TRID 2.0. Right after the language you quoted, the preamble to the final TRID 2.0 states "For this reason, the Bureau is issuing a new proposal, concurrent with this final rule, that would address this issue."
That proposal resulted in a final rule to fix the black hole, which was published at 83 FR 19159 and became effective on June 1, 2018.
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Deposits and Payments
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Even if it is the case that LMorgan's customer is the criminal, if the money is already gone and the bank is in the position of taking a loss, you have without entry claim rights against the issuing bank under Section 3-411 of your state's Uniform Commercial Code. If the issuing bank still refuses to make good on the check, you'll have to sue them.
Before it gets to that, the two calls I would make would be to the issuing bank and to your legal counsel.
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Chat! - BOL Watercooler
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Sergio Mendes, 83- latin jazz pop funk musician...
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Chat! - BOL Watercooler
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Dance The Night - Dua Lipa
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eBanking / Technology
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If the check was mobile deposited, does that make a difference? I was thinking (or dreaming) that if the BOFD did not have the original check then they really couldn't prove it wasn't altered and were liable.
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Lending Compliance
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Give it a rest folks. Do whatever you think is best for your organization and we can let the regulators, or the courts sort it out. This is no longer being productive as we are dealing with opinions now and not facts. If you think you can "make an error" which does not abide by both 1026.19 and 1026.37 and not treat it in the most favorable light from the consumer standpoint, then so be it.
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Deposits and Payments
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Thanks, Brian. I appreciate that.
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BSA/AML/CIP/OFAC Forum
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Sounds easy enough - Thanks for the fast answer, Brian!
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Lending Compliance
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You can argue that these fees shouldn't need to be disclosed but as it stands they do.
No, I actually agree with you. These fees do need to be disclosed. As far as I'm concerned, nothing has changed there. What I AM concerned with, is what happens when the fees are not disclosed, or an "unreasonably low" estimate is disclosed? Now, we're in rocky territory.
I've thought through this portion of the regulations a million times and I just do not understand why they would have been stealth-edited this way, with zero fan-fair from the regulators. Prior to 2.0, lets say you did not disclose a buyer's attorney fee in New York -- a state where buyers typically hire an attorney. You'd maybe have a technical violation, but you definitely wouldn't cure the fee at zero percent tolerance.
However, post revision, the comments are so vague that it could possibly be read to mean that ANY fee that was "unreasonably low" is now subject to 0%. What's even crazier, the comments gives us absolutely no direction or definition on how exactly a lender is to determine something is "unreasonably low." Take the comment below:
3. Good faith requirement for property taxes or non-required services chosen by the consumer. Differences between the amounts of estimated charges for property taxes or services not required by the creditor disclosed under § 1026.19(e)(1)(i) and the amounts of such charges paid by or imposed on the consumer do not constitute a lack of good faith, so long as the original estimated charge, or lack of an estimated charge for a particular service, was based on the best information reasonably available to the creditor at the time the disclosure was provided. For example, if the consumer informs the creditor that the consumer will obtain a type of inspection not required by the creditor, the creditor must include the charge for that item in the disclosures provided under § 1026.19(e)(1)(i), but the actual amount of the inspection fee need not be compared to the original estimate for the inspection fee to perform the good faith analysis required by § 1026.19(e)(3)(iii). The original estimated charge, or lack of an estimated charge for a particular service, complies with § 1026.19(e)(3)(iii) if it is made based on the best information reasonably available to the creditor at the time that the estimate was provided. But, for example, if the subject property is located in a jurisdiction where consumers are customarily represented at closing by their own attorney, even though it is not a requirement, and the creditor fails to include a fee for the consumer's attorney, or includes an unreasonably low estimate for such fee, on the original estimates provided under § 1026.19(e)(1)(i), then the creditor's failure to disclose, or unreasonably low estimation, does not comply with § 1026.19(e)(3)(iii). Similarly, the amount disclosed for property taxes must be based on the best information reasonably available to the creditor at the time the disclosure was provided. For example, if the creditor fails to include a charge for property taxes, or includes an unreasonably low estimate for that charge, on the original estimates provided under § 1026.19(e)(1)(i), then the creditor's failure to disclose, or unreasonably low estimation, does not comply with § 1026.19(e)(3)(iii) and the charge for property tax would be subject to the good faith determination under § 1026.19(e)(3)(i).
What exactly does this mean? Note that it says if you do not disclose the attorney fee or disclose an unreasonably low estimate, then you are not in compliance. It then states that if you do not disclose property taxes or disclose an unreasonably low property tax estimate, then you are not in compliance and the charge for property tax would be subject to the good faith determination under § 1026.19(e)(3)(i). So how do we interpret this? Do all unreasonably low disclosures automatically subject the fee to zero percent tolerance? Or does 0% only apply when the property taxes are unreasonably low, and not the attorney fees? If both, then why does the commentary not clearly state that zero percent tolerance applies to both scenarios, and not only the property taxes?
But I'm not done. The comment prior to it states:
For example, if the consumer informs the creditor that the consumer will choose a settlement agent not identified by the creditor on the written list provided under § 1026.19(e)(1)(vi)(C), and the creditor discloses an unreasonably low estimated settlement agent fee of $20 when the average prices for settlement agent fees in that area are $150, then the under-disclosure does not comply with § 1026.19(e)(3)(iii) and good faith is determined under § 1026.19(e)(3)(i)
Again, what is the objective criteria for determining whether something is "Unreasonably Low ?" If, for example, I have a preferred title company with whom I've negotiated a reduced settlement fee of $100, when the common fee in that area is $300, and the borrower goes and selects the title company recommended by their realtor and gets charged $300, must I then cure $200 because my estimate was "unreasonably low", even though my estimate was low because I negotiated a lower rate for my borrowers ? The entire thing is bonkers and is impossible to operationalize or implement. From my point of view, these edits to this section of the commentary are a massive back-door that can potentially put ANY fees in the zero percent tolerance category. Prepaid interest, home owners insurance, property taxes, realtor commissions, home warranty, HOA fees, HOA transfer fees, Condominium capital contributions, even roof or foundation repairs. If the lender has a whiff of a fee that might exist, you need to not only disclose an estimate, you have to make sure that estimate is not "unreasonably low". And oh, there is no telling on what "unreasonably low" means. Good luck lenders !
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Need to Remain Anonymous
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P2P transfers didn't exist when Reg E was penned. The official interpretation relating to a transfer performed under duress was solely focused on a withdrawal at an ATM. There has been no subsequent guidance from any agency on this topic.
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BSA/AML/CIP/OFAC Forum
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FinCEN Advisory on Tax Evasion may be of help.
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HMDA
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Yes. It meets the definition of a home purchase loan under 1003.2(j). You report the property that will secure the loan.
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General Discussion
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Well, I assume there are going to be other changed terms. Whether you need to give them all new disclosures will depend on what those are, maybe the age of the accounts, how sure they have received all changed term documentation since the accounts were opened. All those are risk factors.
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BSA/AML/CIP/OFAC Forum
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Thank you!
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Lending Compliance
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According to the below text a servicer is not required to submit an escrow account analysis to the borrower if they are more than 30 days overdue when they conduct the escrow account analysis. Does this mean an analysis still has to be conducted on the loan, but we just aren't required to mail the analysis to the borrower or send any surplus to them until they have brought their loan current?
There have been questions about this with some thinking it means an analysis is not ran at all, but if a borrower remains perpetually over 30 days past due and an analysis is never run the payment would never adjust for the increased taxes and insurance each year. Of course, if it can't be sent to the borrower, they wouldn't be notified their payment was changing.
No annual statements in the case of default, foreclosure, or bankruptcy. This paragraph (i)(2) contains an exemption from the provisions of § 1024.17(i)(1). If at the time the servicer conducts the escrow account analysis the borrower is more than 30 days overdue, then the servicer is exempt from the requirements of submitting an annual escrow account statement to the borrower under § 1024.17(i).
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BSA/AML/CIP/OFAC Forum
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You could do a victim filing and put the payee name in as the name used in the transaction. You would not be filing on your member but on the instance and the narrative information would include the info on the check. IMO that is the best you can do as you are correct, you do not know if that truly is the name of the person or not. I would also strongly advise my member to file a report with local PD, if they have been a victim of a crime
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Deposits and Payments
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Let's count days.
Deposit 8/30/24 meaning that the Federal Reserve received the check on 8/31/24. Due to the holiday, the drawee bank received the check on 9/3/2/4 and has until midnight the next business day to return the check as NSF. The Federal reserve receives the retuned check on 9/4/24 and you bank receives it on 9/5/24.
It is unlikely that this is a late return.
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Lending Compliance
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It's not a specific loan. We have seen a substantial increase in escrow deficiencies because of insurance premiums increasing so much. In some cases, a borrower will switch insurance companies and not bring in the refund from the old company even though they're told to do so. It results in a substantial payment increase for them at analysis and they've sometimes spent the insurance refund already on something else.
Other times we have had borrowers request to cancel escrows because they'd like a lower loan payment because they are struggling to make their payment, but the balance is negative, and we won't allow them to be cancelled until their positive. We still have to disburse funds as long as we're still escrowing for them even if they are past due which can result in the escrow balance remaining negative. If we were able to cancel the escrows but keep an escrow payment in place until the negative escrows were paid it would reduce the borrower's payments faster.
I know taxes and insurance still have to be paid, but we've had borrowers more than once ask about canceling escrows with a negative balance. I was just looking at available options for them.
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Regulation B Small Business Loan Reporting (section 1071)
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How often do you get an estate borrowing money?
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