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#1014851 - 08/07/08 04:43 PM Different HELOC products for Different People
Cornfed Turtle Offline
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Joined: Mar 2006
Posts: 1,323
"...Somewhere in Middle Americ...
We have a few different HELOC products that we offer. The differences are how rate is determined, how rate varies and how much repayment is achieved.

Over the last few months, our commercial lenders have offerred another product to their borrowers without our consumer lenders in the mix.

Any suggestions for rationalizing why there are handful of fixed rate HELOCs in our portfolio when we don't offer this product? Generally we add officer comments to the file when we make exceptions to policy, but I am not sure what would suffice here. It isn't really an exception to the policy - - - but we don't have a fixed rate line to offer to anyone else.

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#1014866 - 08/07/08 04:56 PM Re: Different HELOC products for Different People Cornfed Turtle
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
You have a greater potential issue to deal with than policy exceptions. If these are consumer loans then count the number of Reg. Z violation you have for not providing the applicable plan disclosures and other possible Reg. Z violations. And no your current variable rate disclosures will not suffice. The fixed rate product is a separate product and requires its own set of disclosures.

The department manager that allowed this needs to rationalize it.

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The opinions expressed are mine and they are not to be taken as legal advice.

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#1015701 - 08/08/08 01:54 PM Re: Different HELOC products for Different People Dan Persfull
Cornfed Turtle Offline
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Joined: Mar 2006
Posts: 1,323
"...Somewhere in Middle Americ...
That's how it ended up on my desk, Dan. The consumer department is having to create products and disclosures based on what a commercial lender may have promised. Our CO just wanted an auditor blessing.

I guess I was more worried about the fact that - - hey, I want one of those! In this rate environment, why are there five fixed rate HELOCs in our portfolio? Our commercial lenders aren't accustommed to there being a set "home equity plan" that we offer. For them, it is reasonable to adjust terms, rates, etc. But our personal bankers aren't offering this option to everyone.

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#1015731 - 08/08/08 02:14 PM Re: Different HELOC products for Different People Cornfed Turtle
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
Creating the disclosures after the fact does no solve the problem.

Quote:
The consumer department is having to create products and disclosures based on what a commercial lender may have promised.


No they don't. They simply tell the commercial loan officer we have no such product and they have to fit the product into the products that have been established and approved by the bank, not what they want to establish. The loan officer has no, or should have no authority to offer any product outside the bank's established and approved porducts.

If I were you I would apply for the fixed rate product. And if you are in a protected class and meet the eligibility requirements. Well then I would say your bank better be prepared to make you that loan and any other protected class that applies for a fixed rate HELOC because you now offer such a product.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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