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#115531 - 09/18/03 03:43 PM CIP and Loans
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As far as I can tell CIP Applies to all types of Loans including mortgages. It is my understanding that CIP should be done at the application. Does this mean that prequalifications do not need CIP?

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#115532 - 09/18/03 05:30 PM Re: CIP and Loans
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I would say no - it only applies to customers that actually open accounts.
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#115533 - 09/18/03 07:51 PM Re: CIP and Loans
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I agree with Deena. You don't have a customer until the account is opened. A prequal isn't an account and wouldn't have yet required CIP to be complete.
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#115534 - 09/19/03 03:06 PM Re: CIP and Loans
Peepers Offline
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Maybe I'm not seeing it, or maybe I'm thinking too much about this, but does CIP regs state that identification must be done at application?

According to Kirchaman, an "account" for CIP purposes is an ongoing, formal banking relationship, such as a deposit account, a loan or line of credit, a safe deposit box lease, trust services, and the like.

Is there an ongoing banking relationship at application or does the relationship start when the loan is originated?

I'm asking because our mortgage company would rather get verification at closing (this would be up to the title company that closes our loans). The L.O. would get social security number, address and date of birth. It would go through processing and a credit report would be obtained.

If only one applicant is there with the L.O. and they have to send disclosures home for the other applicant to sign, when would they get identification from the person not there?
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#115535 - 09/19/03 03:10 PM Re: CIP and Loans
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Our applicants are getting notice when they apply, if they apply in person, ID will be obtained at that time.

Also, notice that ID is required is given in the commitment letter as a condition of the loan.

Finally, in the closing instructions the closing agent/attorney will obtain and verify ID if it has not already been obtained and verified previously. The closing agent will also be signing a certification of obtaining and verifying the ID.

That's what we are doing.
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#115536 - 09/19/03 03:31 PM Re: CIP and Loans
Andy_Z Offline
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You have to provide a notice to the customer before the account is opened. "Before" can be a very long or a very short time. And you have to meet your CIP requirements before the account is opened, allowing that some requirements may be met afterward.

But an application is not a relationship, as you noted.
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#115537 - 09/19/03 03:38 PM Re: CIP and Loans
Peepers Offline
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Thanks for the input Maria and Andy.

Notification is simple. That will be on each L.O.s desk and in with the disclosures they provide.

Actually getting the verification can be a bit trickier (ie. drivers license for each applicant).

Maria's point about putting a statement on the commitment letter that verification will be obtained at closing is excellent. I'm going to add that to ours.
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#115538 - 09/19/03 03:53 PM Re: CIP and Loans
Elwood P. Dowd Offline
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Next to Harvey
Link to similar thread.
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#115539 - 09/19/03 05:04 PM Re: CIP and Loans
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I can't take credit for the idea about the commitment/closing letters. Our CLO thought of that. But when I read Ken's link, I realized maybe our CLO is a BOLer!
I hope he doesn't know it's me when I am lender-bashing...
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#115540 - 09/19/03 05:15 PM Re: CIP and Loans
Elwood P. Dowd Offline
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Sorry Maria, all your posts are automatically forwarded to him. Is that a problem?
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#115541 - 09/19/03 05:25 PM Re: CIP and Loans
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Quote:

Sorry Maria, all your posts are automatically forwarded to him. Is that a problem?




Ken:
AHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH!!!! Anyone looking to hire a reasonably priced, relatively new, compliance officer??
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