How are you going to accomplish training on the changes? I am working on training now (because examiner are coming for 3 weeks - CRA examination and then I am on VACATION for 2 weeks). Needless to say, I do not want to procrastinate!

I emailed the senior lender to find out if he already had a meeting scheduled that I could attend. I am working on a handout with bullet points - that even confuses me. I am still tweaking... Because our loan department is swamped... he wants me to send out an EMAIL for training.

Email training - that is FUNNY!

Another question - well, looking for verification really.

On Section 32 loans, all the MDIA provisions apply plus you have to make the HOEPA disclosure 3 business days prior to closing - Is this correct?

And.........if (this is so crazy) you happen to have a HOEPA loan where the borrower feels they have a bona fide financial emergency - would they then have to waive (assuming you sent corrected disclosures as well) all THREE waiting periods??????

(I'm not even going to get into rescission, because that would make it FOUR!)

Am I thinking to hard about this?

I need an aspirin.

It isn't only the borrower who may 'feel' they have a bona fide reason. The bank should agree. I don't think you can waive the 3 day HOEPA disclosure requirement, though.

I agree with Skittles, we don't make HOEPA loans, so I didn't look it up, but memory says there is no "out" on HOEPA waiting periods...regardless...most of us who have been in banking forEVER have MAYBE seen one instance of a true bonafide emergency...it really just doesn't happen!

Under 226.31(c)(iii) there is a waiver - or maybe I'm reading the reg wrong?

226.31 (c) has the timing of disclosures for 226.32

And yes, the bank would have to agree with the financial emergency (I made that an assumption - sorry).

I know this is a worst case scenario, but living in a hurricane prone area, I wonder about this.

Could you elaborate on the process you go through when the 5 year balloon is due? Ex.as long as you don't advance new money, you all do a loan modification in any case...without appl, credit check etc. What documents are signed/used along with the modification?

The only loans we underwrite that are subject to HOEPA are loans where the borrower wants to purchase credit insurance. Do you offer credit insurance? And if you do, if the insurance purchase throws the loan into HOEPA status, do you just inform the borrower that credit insurance is not available?

We don't sell credit insurance on real estate loans because it generally bumps the customer into HOEPA status.

Does anyone know the penalties for violations? I know someone is going to ask this in training.

So your management actually agrees to miss out on a fee opportunity just so you won't have a loan subject to HOEPA? What's the big stigma about having loans on your books (and on your LAR) subject to HOEPA? Credit insurance is easy to sell for real estate loans (especially homestead property) and the premiums in some cases are huge.

Sometimes when we inform a borrower that there will be an additional three day waiting period due to the decision to purchase credit insurance, the borrower changes his/her mind.

OK - I have read this whole thread, but am begging for a confirmation that the ONLY things changing on 7/30/09 are the following:

1. E-TIL on a consumer purpose loan secured by a dwelling.
2. E-TIL before any fees (besides credit report) can be charged.
3. New language required on E-TIL
4. Provide E-TIL add 7 -substanially open business days until first potential closing date. If APR on E-TIL is accurate, close loan; If APR on E-TIL is out of tolerance - must re-disclose and wait either 3 (not Sun or legal holidays) days plus 3 more (not Sun or legal holiday days) if corrected TIL sent by mail.

Does that sound right?

I believe the seven-day waiting period is the "more precise" definition of business day. The only thing (I think) that uses the other definition is the original three days after application to provide the ETIL.

That is correct.

Oh - then I am confused.

Receive application and deliver E-TIL at that time; wait 7 precise business days. Is that correct?

Receive application and mail E-TIL within 3 substantially open business days, then wait 7 precise business days. Is that correct?

I am sorry I am so dense.

The "substantial" business days is when you are required to deliver the initial early disclosures.

If you mail the disclosures then you must wait 7 precise business day to close. You can close on the 7th business day. This rule is like the HOEPA rule and not the rescission rule.

If you have to redisclose and mail the new disclosure then it is 3 precise business days before they are considered received and then another 3 precise business days before you can close.

Good morning. Has anyone worked through the tolerance rules for REg Z and how to best implement a redisclosure process? Seems to me that we must measure off of a finance charge tolerance of $35 rather than merely watching the APR. I'm wondering if the bank plans to sell the loan on the secondary market if we could take advantage of the additional tolerances in 226.23(g) since for loans sold we wouldn't have the more limited tolerance that would apply in a foreclosure situation.
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The opinions expressed by me are not the opinions of my employer and should not be considered legal advice.

Are the Reg Z changes that were to be effective 10/01/09 now to be in play by 07/30/09? (the new HUD / GFE)

The new HUD and GFE are governed by RESPA and that date has not changed.

Randy's right but let me add:
The MDIA rules (7/30/09) overlap the Reg Z changes (10/1/09) concerning P-TIL disclosures. The 10/1/09 amendments effect many other things (high priced mortgages, advertising and more). Then we have RESPA changes 1/1/10.

Just so I get this right, can someone confirm my though process. July 4th is on a Saturday.

If loan is applied for on July 1 and early TIL is mailed on July 1, 7 day waiting period expires on July 10. But if corrected disclosures are mailedo on Wednesday July 8, closing can't take place till July 15; when both the 7-day and the 3-day (3+3=6) have been fulfilled. Is that correct?

Would the new procedures for the early TIL exclude loans secured by a dwelling owned by a third party grantor? The reference from the revised 226.19(a), refers to a consumer's dwelling, and isn't a consumer defined as an applicant in this case?

I have looked every where, can someone tell me if a single pay loan is considered an irregular payment for the tolerance test (1/4%)? I know I am going to need to provide examples of these and the only one that seems to fit the definition is a construction loan...help appreciated!

I don't believe so. An irregular loan is (off the top of my head):
Draw loans (multiple advances)
irregular payment periods, or
irregular payment amounts.

Thank you David.

I know this has been beat to death but I have to ask...

Say you have a borrower who is purchasing a house. Due to timing issues, the sale of the house will be lost if we wait the full 7 days. Thus the borrower/purchaser will loose the house to another buyer because the seller is unwilling to extend the purchase sales agreement.

Is this a bonafide reason to waive the 7-day wait?