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#1190763 - 05/27/09 03:45 PM Re: New Reg Z Final Rule - Just Published Skittles
Andy_Z Offline
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So that we stay on point, I agree with Dan. But postal delivery is a good rule of thumb and I believe because things can be "delivered" when they're in the mailbox, it is a good one. But I contemplate if Congress, with nothing better to do, will increase this somehow because of limited delivery of the mail? They may do nothing, or they may make things more consumer friendly. And I assume ( smile ) you know what that means.

And Reg Z defines consummation as when the consumer becomes obligated on the debt. It also refers to your applicable state law, in the OSC.
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Lending Compliance
#1190966 - 05/27/09 05:50 PM Re: New Reg Z Final Rule - Just Published Jerod Moyer
KYbanker20 Offline
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For redisclosure purposes, does a business day include Saturdays?

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#1191020 - 05/27/09 06:40 PM Re: New Reg Z Final Rule - Just Published KYbanker20
waldensouth Offline
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FINALLY ABOVE the gnat line
A business day is defined as every day except Sundays and legal federal holidays - so Mon thru Sat is a business day.
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#1191028 - 05/27/09 06:45 PM Re: New Reg Z Final Rule - Just Published KYbanker20
ktac MITCH Offline
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Giant side of TX
There is the "General Definition" used for all parts of 226.xx (Reg Z) except for ROR & subsec 31 & and the first new piece of MDIA . . .

1. Sec 226.19 (a)(1)(i) = Early Disclosures Requires using the Genral Definition of Business Day,
which means it will vary depending on if The Institution is open for Substantially all Business on a Saturday.

2. For all other counting of Business Days
226.19 (a)(1)(ii) = Imposition of fees
(a)(2) = Waiting to Close
(i) 7 Days to close (ii) If redisclosure is required . . . 3days plus 3 if mailed
Requires using (as the Final Rule says) "the more precise definition" and only excludes Sundays and Holidays - same as ROR

- - - See bottom of pg 12 and top of page 13 in the final rule - - -
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#1191131 - 05/27/09 07:34 PM Re: New Reg Z Final Rule - Just Published Andy_Z
upstateNY Offline
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New York State
Originally Posted By: Andy Z
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.


Been at this close to 30 years and have seen a bona fide emergency once. Bad storm, roof gone and pouring rain. We let those funds go.

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#1191172 - 05/27/09 07:57 PM Re: New Reg Z Final Rule - Just Published Deena
Sara S Offline
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Does anyone know where I can read the actual act? The Mortgage Disclosure Improvement Act?

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#1191432 - 05/28/09 12:45 PM Re: New Reg Z Final Rule - Just Published Sara S
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#1191921 - 05/28/09 06:22 PM Re: New Reg Z Final Rule - Just Published Deena
Ninky Offline
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Can someone please clarify.....corrected disclosure timing. Is it: 3 bus days after mailed date = receipt
3 bus days after receipt for review before consumm.

So, is this correct? Don't count the mail day. Then you can close on the 6th business day after mail date, or do you have to wait until the 7th business day to close?

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#1191929 - 05/28/09 06:29 PM Re: New Reg Z Final Rule - Just Published Ninky
Dan Persfull Offline
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Bloomington, IN
This rule is similar to the HOEPA rule. You can close on the 6th business day after mailed or the 3rd business day after person to person delivery.
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#1192133 - 05/28/09 08:59 PM Re: New Reg Z Final Rule - Just Published Dan Persfull
BLB Offline
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Actual Practices of the new requirements:

1. How are most of you handling the new "Corrected" TIL Disclosure and "Final" TIL disclosure process? What I mean by that are most of you going to provide a "Corrected" TIL on all applicable loans as a standard practice so that the loan procesors don't have to mess with tolerances, etc. (similar to today's standard proctice of providing "final" TILs at consummation regardless if actually outside of tolerance or not)?

2. As a related item, are most of you going to still provide a "final" TIL at consummation even if a "corrected" TIL was already provided? Are you going to require the "corrected" TIL to agree to the "final" TIL (even though the APR tolerance may not be exceeded but the finance charge tolerance is)?

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#1192192 - 05/28/09 09:55 PM Re: New Reg Z Final Rule - Just Published BLB
swiggles Offline
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swiggles
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Originally Posted By: BLB
Actual Practices of the new requirements:

1. How are most of you handling the new "Corrected" TIL Disclosure and "Final" TIL disclosure process? What I mean by that are most of you going to provide a "Corrected" TIL on all applicable loans as a standard practice so that the loan procesors don't have to mess with tolerances, etc. (similar to today's standard proctice of providing "final" TILs at consummation regardless if actually outside of tolerance or not)?

2. As a related item, are most of you going to still provide a "final" TIL at consummation even if a "corrected" TIL was already provided? Are you going to require the "corrected" TIL to agree to the "final" TIL (even though the APR tolerance may not be exceeded but the finance charge tolerance is)?



I think we will adopt one of two methods......management will make the choice.
1. Provide a final TIL and automatically wait three days to close.
2. Test the final APR. If within tolerance, provide the final and close the loan same day. If not within tolerance, provide the final and wait three days.

I am positive that we will always provide a final disclosure. Remember....currently a final is not required if information hasn't changed, but most banks generally provide it anyway.

Some loans will be appoved within the 7-day waiting period. As soon as the loan is approved, a final could be provided, say on day 4 and closing could take place on the 7th day (if the final was not placed in the mail).
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#1193372 - 05/30/09 08:43 PM Re: New Reg Z Final Rule - Just Published swiggles
Princess Romeo Offline

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With respect to the question regarding the need for re-disclosure if the APR is LOWER than the ETIL or the latest CTIL, I was very frustrated with how the Fed did not DIRECTLY ANSWER that question, instead they came up with an answer that is as clear as mud:

Quote:
Commenters requested guidance on whether corrected disclosures are required if the APR initially disclosed under 226.19(a)(1)(i) overstates the actual APR. Comment 19(a)(2)(ii)1 provides that corrected disclosures are not required when the APR previously disclosed is considered accurate under the tolerances in 226.22.


So that makes us take the merry trip down the regulatory breadcrumb trail ***sigh*** Wouldn't it be nice if we could just get a straight "Yes" or "No"?

Okay - so we start at 226.22

226.22 Determination of annual percentage rate.

(4) Mortgage loans. If the annual percentage rate disclosed in a transaction secured by real property or a dwelling varies from the actual rate determined in accordance with paragraph (a)(1) of this section, in addition to the tolerance applicable under paragraphs (a)(2) and (3) of this section, the disclosed annual percentage rate shall also be considered accurate if:
(i) The rate results from the disclosed finance charge; and
(ii)(A) The disclosed finance charge would be considered accurate under 226.18(d)(1)
(B) For purposes of rescission, if the disclosed finance charge would be considered accurate under 226.23(g) or (h), whichever applies.
(5) Additional tolerance for mortgage loans. In a transaction secured by real property or a dwelling, in addition to the tolerances applicable under paragraphs (a)(2) and (3) of this section, if the disclosed finance charge is calculated incorrectly but is considered accurate under 226.18(d)(1) or 226.23(g) or (h), the disclosed annual percentage rate shall be considered accurate:
(i) If the disclosed finance charge is understated, and the disclosed annual percentage rate is also understated but it is closer to the actual annual percentage rate than the rate that would be considered accurate under paragraph (a)(4) of this section;
(ii) If the disclosed finance charge is overstated, and the disclosed annual percentage rate is also overstated but it is closer to the actual annual percentage rate than the rate that would be considered accurate under paragraph (a)(4) of this section.

So this means we also get to take a peak at 226.18
226.18 Content of disclosures.
(d) Finance charge. The finance charge, using that term, and a brief description such as "the dollar amount the credit will cost you."
(1) Mortgage loans. In a transaction secured by real property or a dwelling, the disclosed finance charge and other disclosures affected by the disclosed finance charge (including the amount financed and the annual percentage rate) shall be treated as accurate if the amount disclosed as the finance charge:
(i) is understated by no more than $100; or
(ii) is greater than the amount required to be disclosed.

And let's not forget 226.23 (which deals with Right of Rescission)

226.23 Right of rescission.

(g) Tolerances for accuracy.--(1) One-half of 1 percent tolerance. Except as provided in paragraphs (g)(2) and (h)(2) of this section, the finance charge and other disclosures affected by the finance charge (such as the amount financed and the annual percentage rate) shall be considered accurate for purposes of this section if the disclosed finance charge:
(i) is understated by no more than 1/2 of 1 percent of the face amount of the note or $100, whichever is greater; or
(ii) is greater than the amount required to be disclosed.
(2) One percent tolerance. In a refinancing of a residential mortgage transaction with a new creditor (other than a transaction covered by 226.32), if there is no new advance and no consolidation of existing loans, the finance charge and other disclosures affected by the finance charge (such as the amount financed and the annual percentage rate) shall be considered accurate for purposes of this section if the disclosed finance charge:
(i) is understated by no more than 1 percent of the face amount of the note or $100, whichever is greater; or
(ii) is greater than the amount required to be disclosed.
(h) Special rules for foreclosures.--(1) Right to rescind. After the initiation of foreclosure on the consumer's principal dwelling that secures the credit obligation, the consumer shall have the right to rescind the transaction if:
(i) A mortgage broker fee that should have been included in the finance charge was not included; or
(ii) The creditor did not provide the properly completed appropriate model form in appendix H of this part, or a substantially similar notice of rescission.
(2) Tolerance for disclosures. After the initiation of foreclosure on the consumer's principal dwelling that secures the credit obligation, the finance charge and other disclosures affected by the finance charge (such as the amount financed and the annual percentage rate) shall be considered accurate for purposes of this section if the disclosed finance charge:
(i) is understated by no more than $35; or
(ii) is greater than the amount required to be disclosed.



BUT - When you go to the COMMENTARY for 226.22. you find THIS gem:


22(a)(4) Mortgage loans.
1. Example. If a creditor improperly omits a $75 fee from the finance charge on a regular transaction, the understated finance charge is considered accurate under 226.18(d)(1), and the annual percentage rate corresponding to that understated finance charge also is considered accurate even if it falls outside the tolerance of 1/8 of 1 percentage point provided under 226.22(a)(2). Because a $75 error was made, an annual percentage rate corresponding to a $100 understatement of the finance charge would not be considered accurate.
22(a)(5) Additional tolerance for mortgage loans.
1. Example. This paragraph contains an additional tolerance for a disclosed annual percentage rate that is incorrect but is closer to the actual annual percentage rate than the rate that would be considered accurate under the tolerance in 226.22(a)(4). To illustrate: in an irregular transaction subject to a 1/4 of 1 percentage point tolerance, if the actual annual percentage rate is 9.00 percent and a $75 omission from the finance charge corresponds to a rate of 8.50 percent that is considered accurate under 226.22(a)(4), a disclosed APR of 8.65 percent is within the tolerance in 226.22(a)(5). In this example of an understated finance charge, a disclosed annual percentage rate below 8.50 or above 9.25 percent will not be considered accurate.


What NONE of this really addresses is - WHAT HAPPENS IF THE RATES DROP BETWEEN THE TIME YOU SENT THE FRIGGIN' EARLY DISCLOSURE AND WHEN THE APPLICANT WANTS TO CLOSE THEIR LOAN? If the interest rate drops, the APR also drops and none of that seems to be addressed by 226.22 and its resultant bread crumb trail.

And an even MORE loaded question - what happens if the rate increases while the applicant is forced to wait the effective 6 days (3 to mail, 3 to wait)?

My guess is that EVERYONE will have to purchase a rate lock at some point, and as soon as that rate lock is purchased, send out a CTIL.


I just wish the Fed would have recognized that forcing out more disclosures and more waiting time when the rates DROP isn't going to do ANYONE any bit of good.

I recommend that everyone prepare front line staff for when their customers or members get angry that its taking so darn long to close a loan and that they miss rate drop opportunities and give them a standard response "These mandatory waiting times are the result of the law passed by Congress. We cannot change the law, so you should write to your Congressional representatives and tell them you want the law changed."


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#1193373 - 05/30/09 09:02 PM Re: New Reg Z Final Rule - Just Published Princess Romeo
Princess Romeo Offline

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You know what? I've thought about this just a bit and realized that if the RATE DROPS, that means the Finance Charge drops, and if the APR is overstated because the Finance Charge is overstated, then it IS still considered accurate.

At least that's how I'm reading it when I step back and look at it from the 20,000 foot level.

It would just be nice if the language wasn't so darn convoluted!
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#1194076 - 06/01/09 09:31 PM Re: New Reg Z Final Rule - Just Published Princess Romeo
Clint,,,,, Offline
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Clint,,,,,
Joined: Apr 2003
Posts: 382
Way Out West
Bonnie, please don't take this the wrong way. I'm with you,

But since the "breadcrumb trail" (loved it) is so long and the view from 20,000 feet is pretty high up there, do some of the other guru's on this site agree with Bonnie's opinion?

Just looking for some solid confirmations.
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#1194102 - 06/01/09 10:31 PM Re: New Reg Z Final Rule - Just Published Clint,,,,,
Princess Romeo Offline

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Where the heart is
Well, the regulation does point to 226.22 which then points to 226.18 which states:

(1) Mortgage loans. In a transaction secured by real property or a dwelling, the disclosed finance charge and other disclosures affected by the disclosed finance charge (including the amount financed and the annual percentage rate) shall be treated as accurate if the amount disclosed as the finance charge:
(i) is understated by no more than $100; or
(ii) is greater than the amount required to be disclosed.

I guess I get so focused on PRE-PAID Finance Charges (i.e. points, processing, etc.) that I plumb forgot that the most basic finance charge is INTEREST. If the Finance Charge is overstated (presumably because the interest rate that was used was higher than the rate will be at closing), and the APR was then overstated because of that, it is still considered accurate.

Yeah - it is a bread crumb trail although in the case of Regulation Z, it's getting to be more and more like Regulatory Twister!


Edited to add You know if LOVE the FDIC's site for having all of the regulations and related commentary posted, but I really really wish, especially when it comes to Regulation Z, that they would include a hyperlink on each section to the corresponding Commentary. At one point I had every Commentary section of Reg. Z separately bookmarked, but I lost that when my Favorites file got erased. So now, when I want to read the Commentary for the section I'm reviewing, I have to keep clicking Next Page, Next Page, Next Page. crazy
Last edited by Bonnie QoR; 06/01/09 10:37 PM. Reason: additional thought
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#1194179 - 06/02/09 12:51 PM Re: New Reg Z Final Rule - Just Published Princess Romeo
Deena Offline
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Deena
Joined: Nov 2000
Posts: 2,701
PA
BOL has separate links for each section of the Reg Z Commentary. Maybe that will help you (I know I love it!).
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#1195120 - 06/03/09 03:26 PM Re: New Reg Z Final Rule - Just Published Deena
ahou Offline
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ahou
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Posts: 3,094
To assess fees: If only one spouse comes into to bring the completed application and right of rescission will apply, if I provide the early TIL to spouse that is present (and one for her to bring to her husband) - when can I chg fees other than the cr rept fee?
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#1195198 - 06/03/09 04:44 PM Re: New Reg Z Final Rule - Just Published Deena
NCBanker Offline
Member
Joined: Jan 2008
Posts: 61
I need some response to help clear up a debate:

Does the statement, "You are not required to complete this agreement merely because you have received these disclosures or signed a loan application", go on the TIL or the RESPA GFE?

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#1195209 - 06/03/09 04:53 PM Re: New Reg Z Final Rule - Just Published NCBanker
Amos Offline
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Posts: 237
USA
It's a Reg. Z requirement. It goes on the TIL.

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#1195288 - 06/03/09 05:46 PM Re: New Reg Z Final Rule - Just Published Jerod Moyer
scottb Offline
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Joined: Sep 2006
Posts: 77
If a covered real estate loan is set up to ballon in five years, on the ballon date has a refinance occured requiring a new early truth in lending disclosure and 7 day waiting period?

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#1195296 - 06/03/09 05:55 PM Re: New Reg Z Final Rule - Just Published scottb
RR Joker Offline
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The Swamp
If you refinance the balloon payment, you start the 7 day initial "wait" period as soon as you take the application for the renewal..that could be at or prior to maturity, IMO.
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#1195367 - 06/03/09 06:51 PM Re: New Reg Z Final Rule - Just Published RR Joker
scottb Offline
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Joined: Sep 2006
Posts: 77
Subpart A 226.1 paragraph 1 - Effective date regulation states: covered loans ...for which a creditor recieves an application. So, what if there is no application taken when the loan ballons?

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#1195390 - 06/03/09 07:13 PM Re: New Reg Z Final Rule - Just Published scottb
ktac MITCH Offline
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ktac MITCH
Joined: May 2005
Posts: 1,813
Giant side of TX
Quote:
If a covered real estate loan is set up to ballon in five years, on the ballon date has a refinance occured requiring a new early truth in lending disclosure and 7 day waiting period?

Thinking out loud here - If you don't actually do a new note but just do a modification = this (as well as all parts of Reg Z) would be N/A.
But if you do a new note - then I would think there has to be an application ???? Yes / No. And therefore, all these new requiremetns apply (again).
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#1195424 - 06/03/09 07:45 PM Re: New Reg Z Final Rule - Just Published ktac MITCH
swiggles Offline
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swiggles
Joined: Aug 2001
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Originally Posted By: ktacMITCH
Quote:
If a covered real estate loan is set up to ballon in five years, on the ballon date has a refinance occured requiring a new early truth in lending disclosure and 7 day waiting period?

Thinking out loud here - If you don't actually do a new note but just do a modification = this (as well as all parts of Reg Z) would be N/A.
But if you do a new note - then I would think there has to be an application ???? Yes / No. And therefore, all these new requiremetns apply (again).


Moot issue at my shop as we would never have a new promissory note signed in order to refinance a balloon. We would have a modification agreement signed which wouldn't trigger anything.
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#1195441 - 06/03/09 08:11 PM Re: New Reg Z Final Rule - Just Published swiggles
stella Offline
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Joined: Nov 2006
Posts: 61
does this apply to single pay notes?

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