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#1186762 - 05/19/09 08:46 PM
Re: New Reg Z Final Rule - Just Published
Jerod Moyer
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Platinum Poster
Joined: Sep 2005
Posts: 749
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Totally Confused with New Reg Z. This is the why we do our Real Estate Loans. Payments are amortized over 15 years to come up with the customers monthly payments. Loan is setup on these payments for two years. At maturity loan is extended for an additional two years same payment usually same interest rate this continues until loan is paid in full. For regulation purposes is this consider a regular transaction or irregular transaction concerning the variance in your annual percentage rate (-/+ 1/4 of 1 percent)or (-/+ 1/8 of 1 percent)
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#1187080 - 05/20/09 02:14 PM
Re: New Reg Z Final Rule - Just Published
theloanbug
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100 Club
Joined: Jan 2006
Posts: 190
TX
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Thanks KTACMitch! You don't know how long I have wanted to see everything in one place. ....and the business days for delivering early disclosures is business days substantially open for business...... while the "waiting" business days is not Sunday and certain legal holidays......Is that correct?
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#1187139 - 05/20/09 02:55 PM
Re: New Reg Z Final Rule - Just Published
QueenBB
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10K Club
Joined: Nov 2002
Posts: 20,656
The Swamp
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yes
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#1187548 - 05/20/09 06:03 PM
Reg. Z amendments - accuracy tolerance
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Joined: Jun 2007
Posts: 173
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My question relates to the new Reg. Z amendments scheduled to become effective on July 30, 2009. With respect to the need for a corrected early TIL disclosure--I know the 1/4% for regular transactions and the 1/8% tolerance for irregular, but am still unclear whether or not a new corrected early TIL is required if the final APR is LESS THAN the previously disclosed APR. In other words, if the APR was originally overstated (regardless of how much) from what the final APR ends up being, is a corrected TIL disclosure still required to be given 3 business days before closing?
Also, if the only irregularity about a balloon loan is the final payment, am I correct that that is still a regular transaction? Thanks.
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#1187558 - 05/20/09 06:12 PM
Re: New Reg Z Final Rule - Just Published
123comp
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Member
Joined: Dec 2007
Posts: 91
Central NY
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Ok, I have another question sorta related to this topic....if we begin collecting a commitment fee with a signed commitment letter, is this considered a “prepaid expense” that will effect my APR?
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#1187598 - 05/20/09 06:32 PM
Re: New Reg Z Final Rule - Just Published
Karen A. Luttrell
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Joined: Aug 2002
Posts: 47,673
Bloomington, IN
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Yes. It's a fee associated with the credit transaction and there would be no comparable fee in a similar cash transaction.
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The opinions expressed are mine and they are not to be taken as legal advice.
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#1187604 - 05/20/09 06:39 PM
Re: New Reg Z Final Rule - Just Published
Dan Persfull
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Member
Joined: Dec 2007
Posts: 91
Central NY
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Thanks Dan...you are always a big help!!
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#1187606 - 05/20/09 06:41 PM
Re: New Reg Z Final Rule - Just Published
Karen A. Luttrell
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Member
Joined: Dec 2007
Posts: 91
Central NY
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Another thought....what if we started charging a processing fee at closing instead?
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#1187627 - 05/20/09 06:53 PM
Re: New Reg Z Final Rule - Just Published
Karen A. Luttrell
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10K Club
Joined: Aug 2002
Posts: 47,673
Bloomington, IN
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Still a pre-paid finance charge that affects the APR.
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The opinions expressed are mine and they are not to be taken as legal advice.
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#1187821 - 05/20/09 08:30 PM
Re: Reg. Z amendments - accuracy tolerance
VRV
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10K Club
Joined: Jul 2003
Posts: 17,410
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Here's the thread with all the questions and answers on this topic. If you don't find your answer there, please feel free to restate your question.
Just trying to keep all this together in one place so we all learn together.
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#1188255 - 05/21/09 03:27 PM
Re: Reg. Z amendments - accuracy tolerance
Truffle Royale
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100 Club
Joined: Jun 2007
Posts: 173
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Thanks for the link, Truffle. Actually, I had already read that thread and still wasn't positive that I know where we had come out on this. It appeared as though several posters believed that an overstated APR (outside of 1/4% or 1/8%) would necessitate corrected disclosures. But someone quoted a knowledgeable source as saying that overstated APRs did not trigger the need for corrected disclosure, so I was interested in knowing what our resident experts on here think.
If we have to provide corrected disclosures for overstated APRs, it is going to have a major impact on our business. It is not unusual for us to discover at closing that the applicant actually qualifies for a 1/4% discount on their rate due to some factor we had not realized previously, or the applicant decides at closing to open a checking account (which gives them a 1/4% discount on their loan rate) or they want to sign up for ACH payments on their loan (which also qualifies them for a 1/4% discount on their loan rate).
If the new rule requires corrected disclosure for overstated APRs, our customers would have to scratch the closing that day and come back in 3 more days in order to get the lower rate. So I'm just looking for some conclusive guidance on this issue. It's unclear to me from reading the amendments what the correct answer is.
I also wanted to confirm that if the only irregularity on a balloon is the final large payment, that it is still considered a regular transaction, and not an irregular one. Thanks.
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#1189240 - 05/22/09 03:50 PM
Re: Reg. Z amendments - accuracy tolerance
VRV
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Power Poster
Joined: Jan 2008
Posts: 6,389
Looking for My Happy Place....
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I've probably read this thread a hundred times already and perhaps I missed this.....
Is there a timing difference for when you can charge a fee (other than the credit report) if you mail the ETIL as opposed to providing it face to face?
My head, stomach and eyes all hurt now................
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My opinion only.
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#1189254 - 05/22/09 04:01 PM
Re: Reg. Z amendments - accuracy tolerance
Tigg
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Power Poster
Joined: Aug 2002
Posts: 3,094
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If you give disclosure in person, you can chg fee any time after delivery. If you mail, you can impose fee after the consumer receives the disclosure, in any case after midnight on the 3rd business day following mailing of the disclosures.
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#1189269 - 05/22/09 04:13 PM
Re: Reg. Z amendments - accuracy tolerance
ahou
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Power Poster
Joined: Jan 2008
Posts: 6,389
Looking for My Happy Place....
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Thanks, ahou. That's what I thought.
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My opinion only.
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#1189433 - 05/22/09 06:25 PM
Re: Reg. Z amendments - accuracy tolerance
VRV
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Junior Member
Joined: Feb 2003
Posts: 35
OH
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VRV --
Second question first...Footnote 46 to section 226.22(a)(3) states that "an irregular transaction is one that includes one or more of the following features:...irregular payment amounts (other than an irregular first period or an irregular first or final payment)." Since the balloon (final) payment is the only irregularity, such a loan is not "irregular" for APR tolerance purposes.
Now, the tough question...My first reaction was to think that an overstated APR on a mortgage loan is not considered inaccurate. So, I went looking for the proof.
All I can find is section 226.22(a)(5)(ii), which gives us a little leeway for an APR that is outside the usual APR tolerance on the high side, it is caused by an overstated finance charge, and the APR is closer to the "actual" APR than an overstated APR that would be considered accurate under 226.22(a)(4). So, an APR that falls within this upside window is not "inaccurate" and a later lowering does not "correct" an "inaccurate" APR, so no corrected estimated TIL would be required.
And a note to everyone on this thread -- Don't forget that your mortgage loan folks aren't the only ones who have to be up to speed on these changes by July 30th. The tougher part of your transition/implementation will probably be getting your consumer loan people/systems/etc. up and running on this new (to them) world of early estimated disclosures, never mind learning two definitions of "business day" and all the rest. Maybe consumer folks should refer anyone wanting to do a dwelling-secured loan to the mortgage area.
Good luck to all who enter here.
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Opinions expressed are mine only & are not legal advice.
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#1189840 - 05/26/09 02:36 PM
Re: Reg. Z amendments - accuracy tolerance
Bill S
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100 Club
Joined: Jun 2007
Posts: 173
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Bill, thanks for confirming my thoughts on the balloon payment. I thought I was correct, but really appreciate the confirmation.
And I especially want to thank you for your thoughts on the overstated APR question. This is obviously a question that many of us are struggling with, and I very much appreciate your taking the time to provide your insight. That is very helpful.
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#1189885 - 05/26/09 03:31 PM
Re: New Reg Z Final Rule - Just Published
swiggles
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10K Club
Joined: Sep 2002
Posts: 13,965
TN
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I went to a seminar Friday hosted by Jack H. It was very good, and scared the h*ll out of me. This is a monster.
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#1190300 - 05/26/09 09:00 PM
Re: New Reg Z Final Rule - Just Published
swiggles
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Platinum Poster
Joined: Apr 2005
Posts: 684
Jersey Shore
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I didn't see it but does the regulation provide any allowance for the consumer to waive the 7 day or 3/6 days for the final TIL? Similar to waiving R of R in an emergency.
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#1190304 - 05/26/09 09:04 PM
Re: New Reg Z Final Rule - Just Published
Jerseygirl
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Joined: Sep 2002
Posts: 13,965
TN
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Exactly like ROR - rarely, rarely, rarely used.
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#1190329 - 05/26/09 10:20 PM
Re: New Reg Z Final Rule - Just Published
Skittles
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Joined: Oct 2000
Posts: 27,763
On the Net
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Under a "bona fide financial emergency" which I'd still like a definition on. To date I've never had it requested, but if it isn't a real emergency, and not poor prior planning, my conservative judgment always says I'll have an answer for you in three business days.
With the increased reliance on mailing disclosures, I worry too what will happen if Saturday mail is stopped as the USPO wants.
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#1190341 - 05/26/09 10:48 PM
Re: New Reg Z Final Rule - Just Published
Skittles
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Diamond Poster
Joined: May 2005
Posts: 1,813
Giant side of TX
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Exactly like ROR - rarely, rarely, rarely used. I agree; for training I plan to ask the lenders (with a total of XX Years experience togeter) how many times have they seen ROR waived due to Bonafied Financial Emergency ? This should be just as rare.
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#1190437 - 05/27/09 01:19 PM
Re: New Reg Z Final Rule - Just Published
Andy_Z
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Power Poster
Joined: Jan 2008
Posts: 6,389
Looking for My Happy Place....
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With the increased reliance on mailing disclosures, I worry too what will happen if Saturday mail is stopped as the USPO wants. I forgot about this! One of our branches is in a city where they will be discontinuing Saturday deliver in the next couple of weeks. Can we still use the precise definition for that branch?
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What would you do if you knew you could not fail? ~ Dr. R Schuller
My opinion only.
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#1190664 - 05/27/09 02:55 PM
Re: New Reg Z Final Rule - Just Published
Tigg
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10K Club
Joined: Aug 2002
Posts: 47,673
Bloomington, IN
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IMO, yes. The definition has never depended on the post office being open, that was just a rule of thumb people used.
As an example. If July 4th fell on Sunday and the Post Office closed on Monday July 5th to observe the holiday you still would count Monday as a rescission day even though the post office is closed becuase Monday the 5th is not a designated holiday.
Until they amend the regulation Saturdays will be a rescission day whether the post office is open or not.
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The opinions expressed are mine and they are not to be taken as legal advice.
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#1190724 - 05/27/09 03:22 PM
Re: New Reg Z Final Rule - Just Published
Ninky
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10K Club
Joined: Sep 2002
Posts: 13,965
TN
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Closing
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