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#1127891 - 02/11/09 04:16 PM HELOC draw <$4000 - how to correct
CalifDreamin Offline
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CalifDreamin
Joined: Mar 2002
Posts: 2,215
Far from Calif
Teller made huge mistakes yesterday - First, she allowed customer to draw on HELOC using a temporary check (not allowed in our procedures). Second, she allowed the check to be made for $3200 and cashed it. How do we correct this? She cashed the check and he has no other accounts with us, so it's not like we can reverse the transaction. The only thing I can see that we can do is have him come back in today and take out $800 (so the two added together = $4000) - or if he hasn't spent the money already, we can have him bring it in and reverse the transaction that way and have him write a new check for $4000, them put a memo to the file documenting what happened.

Thoughts?
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#1127922 - 02/11/09 04:34 PM Re: HELOC draw <$4000 - how to correct CalifDreamin
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 78,597
Galveston, TX
Sounds like the only options available.
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#1128120 - 02/11/09 06:43 PM Re: HELOC draw <$4000 - how to correct rlcarey
swiggles Offline
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swiggles
Joined: Aug 2001
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Or let the sleeping dog lie.....

I think the cure for this falls under the "pay the borrower $1,000" rule.
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#1128126 - 02/11/09 06:46 PM Re: HELOC draw <$4000 - how to correct swiggles
M Cockrell Offline
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M Cockrell
Joined: Jan 2003
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Dallas, TX
And, what happens the next time the client asks for $3,200? How do you respond to, "Well, I've done it before and it wasn't an issue then."
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#1128211 - 02/11/09 08:09 PM Re: HELOC draw <$4000 - how to correct M Cockrell
swiggles Offline
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swiggles
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I think it's an incurable violation. I don't think that forcing the borrower to take another $800, after the fact, fixes the violation. I guess at some point, you may have to disclose the fact that the $3,200 draw violated constitutional law. But the bank's lien could not be invalidated as long as the Bank at some point dishes out the $1,000. I know my bank wouldn't be paying out the $1,000 unless threatened by the borrower during foreclosure proceedings or perhaps a savvy borrower who might force our hand on the matter.
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#1128569 - 02/12/09 02:47 PM Re: HELOC draw <$4000 - how to correct swiggles
CalifDreamin Offline
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CalifDreamin
Joined: Mar 2002
Posts: 2,215
Far from Calif
Thank you all for your input on this. Hate the incurrable mistakes!
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