Lucy,
I think the disclosures for RESPA have gone from the sublime to the ridiculous. My main question concerns junior lien loans.
Our bank will not make a junior lien loan if any of the following are in arrears: 1) Senior Lien(s) loan payments; 2) taxes; 3) insurance; 4) repairs/maintenance necessary for the property to be habitable/saleable.
Now we aren't asking that these items be PAID in full at the time of the loan - they just can't be delinquent. But - if I take HUD's reasoning to its logical(?) conclusion - will I need to disclose as POC all future payments on the Senior Lien, all future taxes, all future insurance premiums, all future repairs?
While we are at it, we won't fund a loan if the credit report shows any other loan payments are behind. The borrower would have to current on those loan payments. Do we need to show those on our GFE/HUD-1a as well?
Where do I stop? Or can I take the reasoning that I am not requiring these items to be PAID IN FULL before I fund my loan, but that the items simply be in a current status? And if that's my line of reasoning, does "current status" need to shown as POC?
I am envisioning a GFE/HUD-1A with so many POC entires that it will become not only meaningless for the consumer, but dangerously confusing as well.
I wish HUD would say that for refinances and junior lien loans, a statement to the effect: "BEFORE LENDER WILL MAKE THIS LOAN, YOU MUST BE CURRENT FOR THE PAYMENT OF ANY SENIOR LIEN LOANS, YOU MUST BE CURRENT IN THE PAYMENT OF ANY PROPERTY TAXES FOR THIS PROPERTY, YOU MUST BE CURRENT IN THE PAYMENT OF THE FIRE/HAZARD (FLOOD) INSURANCE FOR THIS PROPERTY, AND AN APPRAISAL OR INSPECTION OF YOUR PROPERTY MUST SHOW NOT INDICATE ANY DEFICIENCIES THAT REQUIRE REPAIR. Since you have been paying any senior loans, property taxes, and insurance, you know what those payments cost."
Whad'ya think?