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#1238111 - 08/24/09 09:28 PM Re: New Reg Z Final Rule - Just Published ktac MITCH
Frank Offline
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Joined: Jun 2007
Posts: 133
Central Arkansas
The FDIC will be having a teleconference to discuss this and other Reg Z issues Thursday. It might be advantageous to you to sign up and listen in.

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Lending Compliance
#1238123 - 08/24/09 09:46 PM Re: New Reg Z Final Rule - Just Published Frank
Queen Mum Offline
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Queen Mum
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OK
I hadn't heard about this teleconference. Could you give us information please?

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#1238251 - 08/25/09 12:46 PM Re: New Reg Z Final Rule - Just Published Queen Mum
pacar Offline
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Joined: Jul 2007
Posts: 320
I found the info here:

http://www.fdic.gov/news/conferences/dallas_region_teleconf/mortgage.html

The site said that registration needs to be completed by 8/21. I submitted my registration anyway...we'll see.

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#1238434 - 08/25/09 02:29 PM Re: New Reg Z Final Rule - Just Published #Just Jay
123comp Offline
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Joined: Oct 2005
Posts: 38
If your HELOC'S are a revolving line of credit they are excluded from "higher Priced" rules

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#1238671 - 08/25/09 05:31 PM Re: New Reg Z Final Rule - Just Published DD Regs
CRAatBOK Offline

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Further South than I wanna be.
Originally Posted By: DD Regs
Has anyone read the "From the Examiner's Desk: Changes to Regulation Z Afford Increased Consumer Protections"?

On page 29 it discusses the loans under 7 yrs in term with a balloon issue.

Quote:
"But where a balloon payment comes due before the end of seven years, the balloon payment must be considered in determining repayment ability, in effect, prohibiting higer priced morgage loans with balloon payments due in less than seven years in almost all cases.


Further down they say:

Banks continuing to offer these mortgage loans on or after October 1, 2009, likely will have to reduce the APR charged to prevent these loans from being higher-priced morgages.


Then further down they discuss this out:

Of course, where the borrower has the right under the mortgage contract to renew the loan beyond seven years, there is no balloon payment that needs to be considered in determining repayment ability. While this right may be conditional, it is improtant to note that satisfying the conditions must be withing the borrower's control.

They refer to comment 17(c)(1)-(7) for conditions within the consumer's control.

So, does all this mean the examiners don't think it is possible to offer 3yr or 5 yr balloons?


DD, do you have a link to this?
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#1238672 - 08/25/09 05:36 PM Re: New Reg Z Final Rule - Just Published CRAatBOK
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#1238675 - 08/25/09 05:39 PM Re: New Reg Z Final Rule - Just Published Jerod Moyer
cindylou66 Offline
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cindylou66
Joined: Dec 2003
Posts: 25
Alabama
I've been out of touch on some things with the changes coming down the tube on Regulation Z. I think I've got the timing stuff down, but here's my question. What about the same day credit for loan payments on loans secured by a consumer's principal dwelling? Our cutoff time is 4:00. How are you guys handling the same day credit for payments taken after your cutoff time? My suggestion was to keep all loan payments separate after cutoff and have the loan ops. personnel key them all the next day, backdating them. My bank president didn't like this idea. Any other suggestions?

Thanks!
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#1238891 - 08/25/09 08:22 PM Re: New Reg Z Final Rule - Just Published David Dickinson
Still Complyin Offline
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Posts: 101
Texas USA
so... what if you have a guarantor and/or show no income for the borrower (loan made on guarantor income) or the borrowers' income does not service debt, are there issues?

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#1238922 - 08/25/09 08:54 PM Re: New Reg Z Final Rule - Just Published Bullseye
CRAatBOK Offline

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Further South than I wanna be.
Originally Posted By: Bullseye


Thanks Bullseye
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#1238948 - 08/25/09 09:29 PM Re: New Reg Z Final Rule - Just Published CRAatBOK
Tater Offline
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Joined: Jan 2006
Posts: 629
Missouri
Question regarding governing law:

We took a pre-approval application in July, prior to the effective date of the new rules. This week, the applicants found a house and signed a contract.

Obviously, we will send new disclosures but are we subject to the 3-day wait period for the initial disclosures before we can order services and incur borrower fees, or can we go ahead and order the appraisal, title work, etc?

Further, which set of rules (Pre-7/30 or Post-7/30) are we governed by if re-disclosure is required by an APR change...do we have to wait the additional days, or can we proceed to closing as soon as we are ready?

Thanks!
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#1239030 - 08/25/09 11:06 PM Re: New Reg Z Final Rule - Just Published ktac MITCH
river girl Offline
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Posts: 1,005
Originally Posted By: ktac MITCH
QCL - correct that paragraph 1 on pg 10 indicates no matter if mailed / emailed / sent by courier other than USPS = the 3 additional days to assume the consumer receives the disclosure.

But, paragraph 2 indicats that a creditor can depend on evidence of delivery (proof of delivery by overnight, certified, etc)
But for me, why add more potential for confusion - just stick with the 3 additional days if it was not given in person


I would like to bring this part up again.

We have two options - the member can apply for an equity loan through our website and consent or decline to electronic application disclosures (which include the MDIA / GFE / etc). Or they can come into a branch, sit with a lender and still either consent to decline electronic disclosures. If they consent, the disclosures are emailed to them and they get no hard copy at that time.

In both these situations, where the member consents to the electronic early disclosures, our system notes that the member consented or declined. It also notes the time the disclosures were printed or it says Not Yet Printed.

If we deliver the disclosures electronically, whether the member printed them or not, can we then charge the borrower the AU underwriting fee and the fee for the appraisal at the time of application or do we have to wait the three days.

I know there are other posts that talk about the E-Sign Act but I have read it several times and I just get more confused. Does what we are doing comply with the E-Sign Act and allow us to collect the fees without waiting three days?

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#1239129 - 08/26/09 12:52 PM Re: New Reg Z Final Rule - Just Published Tater
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
Quote:
so... what if you have a guarantor and/or show no income for the borrower (loan made on guarantor income) or the borrowers' income does not service debt, are there issues?


You must document the repayment ability of the borrower(s). A guarantor is not a borrower.



Tater - if you gave a true pre-approval commitment letter (see 203.2(b) for a description) then I would say your application date is the date you received the pre-approval request.

If you only gave a pre-qualification letter then IMO your application date is the date the applicant came back to you with the identified property.
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#1239137 - 08/26/09 12:58 PM Re: New Reg Z Final Rule - Just Published Dan Persfull
RR Joker Offline
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The Swamp
Dan, this struck an interest to me...it's not all that unusual to make a loan on the strength of a guarantor. So, if the actual borrower(s) do not have the income to support the debt...what options are there? Other than lowering the rate and taking it out of an HPML category. I'm also thinking ahead to the proposed Z changes and more charges affecting the APR and throwing more loans into the HPML category. cry

Quote:
You must document the repayment ability of the borrower(s). A guarantor is not a borrower.
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#1239145 - 08/26/09 01:09 PM Re: New Reg Z Final Rule - Just Published RR Joker
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
If you are going to rely on the repayment ability of the guarantor then IMO you are going to have to counter offer the loan request for the proposed guarantor to become a co-borrower.

PS. But then you must also incorporate all the guarantor's debts and obligations, with the applicant's, into the debt to income ratio calculations.

Last edited by Dan Persfull; 08/26/09 01:11 PM.
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#1239215 - 08/26/09 01:52 PM Re: New Reg Z Final Rule - Just Published Dan Persfull
bstritecky Offline
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Joined: Feb 2005
Posts: 313
sd
I think I am missing something here. As far as same day crediting on loan payments - are loans that are in forclosure exempt from this requirement? We may have a loan in forclosure that is several payments past due and if the consumer sends us only one of those and we accept it it may change our foreclosure status. I would appreciate some guidance on this.

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#1239443 - 08/26/09 03:31 PM Re: New Reg Z Final Rule - Just Published Dan Persfull
David Dickinson Offline
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David Dickinson
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Posts: 18,762
Central City, NE
First, I'm having a tough time keeping all of the different discussions straight in this string. Anyone else? Maybe it would be better to break this up or start new questions in a new string. Just my thoughts.

Originally Posted By: Dan Persfull
If you are going to rely on the repayment ability of the guarantor then IMO you are going to have to counter offer the loan request for the proposed guarantor to become a co-borrower.

I understand what you are saying Dan, but you can't name applicants. I don't think it would be compliant with Reg B to say "we will consider this loan if Mr. Jones will be an co-borrower rather than a guarantor."
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#1239570 - 08/26/09 05:00 PM Re: New Reg Z Final Rule - Just Published David Dickinson
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,858
Bloomington, IN
David, I don't disagree in general. However, the guarantor has already been presented for consideration and apparently so has their income. Reg B allows you to require any person who's income is being relied on to repay the debt to also be obligated on the debt.

From the Commentary to 202.7(d)(5)


2. Reliance on income of another person individual credit. An applicant who requests individual credit relying on the income of another person (including a spouse in a noncommunity property state) may be required to provide the signature of the other person to make the income available to pay the debt. . . .
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#1239680 - 08/26/09 06:25 PM Re: New Reg Z Final Rule - Just Published Dan Persfull
RR Joker Offline
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RR Joker
Joined: Nov 2002
Posts: 20,654
The Swamp
Quote:
First, I'm having a tough time keeping all of the different discussions straight in this string. Anyone else? Maybe it would be better to break this up or start new questions in a new string. Just my thoughts.


yes...it's beginning to make me dizzy! crazy
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#1239747 - 08/26/09 06:59 PM Re: New Reg Z Final Rule - Just Published Jerod Moyer
Farm Girl Offline
Junior Member
Joined: Dec 2002
Posts: 31
Missouri
I've been out of touch on some things with the changes coming down the tube on Regulation Z. I think I've got the timing stuff down, but here's my question. What about the same day credit for loan payments on loans secured by a consumer's principal dwelling? Our cutoff time is 4:00. How are you guys handling the same day credit for payments taken after your cutoff time? My suggestion was to keep all loan payments separate after cutoff and have the loan ops. personnel key them all the next day, backdating them. My bank president didn't like this idea. Any other suggestions?

Thanks!


I also was wondering about how to handle payments made after our cutoff time. I called our Senior Review Examiner at the FDIC and he told me that we would be fine as long as we had our cutoff time posted and the fact those payments would post to the account the next day.

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#1239895 - 08/26/09 08:48 PM Re: New Reg Z Final Rule - Just Published CRAatBOK
swiggles Offline
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swiggles
Joined: Aug 2001
Posts: 7,333
Originally Posted By: KCGeoQueen

Thanks for your response Swiggles. That is what I thought but since I have been out of the compliance world for so long I wasn't sure. I have decided to go back and start at the beginning - going to National Compliance school this fall. I am sure it will be a lot harder than it was the first time I went thru it. Hopefully once I get started I will remember some things. Of course so much has changed it might be best if I forget what I knew. smile


Well, more power to 'ya. I've NEVER been to National Compliance School.....just a state-run program.....

You're right...if I were to go through it again, I'm sure I'd find that it's A LOT harder now.....way, way, way more to it than the first go 'round. It's easier to have learned it piece by piece over the years than it would be to try to comprehend the whole ball of wax at once!!! eek
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#1240022 - 08/27/09 12:20 PM Re: New Reg Z Final Rule - Just Published RR Joker
MarieR Offline
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Joined: Nov 2005
Posts: 614
Originally Posted By: RR joker
Quote:
First, I'm having a tough time keeping all of the different discussions straight in this string. Anyone else? Maybe it would be better to break this up or start new questions in a new string. Just my thoughts.


yes...it's beginning to make me dizzy! crazy


I agree- what if there was a thread for each Reg Z change- MDIA, HMPLs, student loans, etc- that way there is some seperation but still a central place for discussion? Just a thought
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#1240028 - 08/27/09 12:37 PM Re: New Reg Z Final Rule - Just Published MarieR
DD Regs Offline
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DD Regs
Joined: Nov 2008
Posts: 4,132
Somewhere in the middle
Originally Posted By: MarieR
Originally Posted By: RR joker
Quote:
First, I'm having a tough time keeping all of the different discussions straight in this string. Anyone else? Maybe it would be better to break this up or start new questions in a new string. Just my thoughts.


yes...it's beginning to make me dizzy! crazy


I agree- what if there was a thread for each Reg Z change- MDIA, HMPLs, student loans, etc- that way there is some seperation but still a central place for discussion? Just a thought


I second that motion.
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#1240034 - 08/27/09 12:41 PM Re: New Reg Z Final Rule - Just Published DD Regs
lscy Offline
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Joined: Mar 2007
Posts: 33
I also agree, it would be best to have a separate thread for each of the Reg Z revisions - there are just so many of them!!!

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#1240045 - 08/27/09 12:49 PM Re: New Reg Z Final Rule - Just Published lscy
RR Joker Offline
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RR Joker
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The Swamp
Yes, and placed static at the top of this forum, just like this thread is.

I think the staggered timing of all of this is making it doubly difficult...It's like...what to do next?

I don't want to even think THAT hard about the January changes until I'm done with the October changes...ya know?
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#1240124 - 08/27/09 02:13 PM Re: New Reg Z Final Rule - Just Published RR Joker
Truffle Royale Offline

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I don't think there's a way to do what you're asking without a new forum just for Reg Z. That would be Admin's call.

Originally this thread started as a general discussion of the Reg changes rather than questioning and answering specific instances. Some people are making seperate posts with their specific questions and that seems to be working well. If others would do the same, this thread could go back to being a discussion of the next Reg Z change.

Maybe the thing to do would be to notify a mod to ask that a specific type question be moved to a seperate thread rather than left in here.

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