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#1238111 - 08/24/09 09:28 PM
Re: New Reg Z Final Rule - Just Published
ktac MITCH
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100 Club
Joined: Jun 2007
Posts: 133
Central Arkansas
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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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#1238434 - 08/25/09 02:29 PM
Re: New Reg Z Final Rule - Just Published
#Just Jay
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Junior Member
Joined: Oct 2005
Posts: 38
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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
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Power Poster
Joined: Mar 2004
Posts: 6,172
Further South than I wanna be.
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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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Life is not the way it's supposed to be. It's the way it is. The way you cope with it is what makes the difference.
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#1238672 - 08/25/09 05:36 PM
Re: New Reg Z Final Rule - Just Published
CRAatBOK
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Platinum Poster
Joined: Jan 2004
Posts: 968
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#1238675 - 08/25/09 05:39 PM
Re: New Reg Z Final Rule - Just Published
Jerod Moyer
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Junior Member
Joined: Dec 2003
Posts: 25
Alabama
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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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I went to an office and was respected as a human being and my opinion was appreciated. Guess what? I was in the wrong office!
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#1238891 - 08/25/09 08:22 PM
Re: New Reg Z Final Rule - Just Published
David Dickinson
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100 Club
Joined: Nov 2004
Posts: 101
Texas USA
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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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#1238948 - 08/25/09 09:29 PM
Re: New Reg Z Final Rule - Just Published
CRAatBOK
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Platinum Poster
Joined: Jan 2006
Posts: 642
Missouri
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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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Born once? Die twice. Born twice? DIE ONCE!
Loan Review, HMDA, ALLL
Opinions are my own and do not reflect any others
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#1239030 - 08/25/09 11:06 PM
Re: New Reg Z Final Rule - Just Published
ktac MITCH
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Diamond Poster
Joined: Nov 2004
Posts: 1,005
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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
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10K Club
Joined: Aug 2002
Posts: 47,532
Bloomington, IN
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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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The opinions expressed are mine and they are not to be taken as legal advice.
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#1239137 - 08/26/09 12:58 PM
Re: New Reg Z Final Rule - Just Published
Dan Persfull
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10K Club
Joined: Nov 2002
Posts: 20,656
The Swamp
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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. You must document the repayment ability of the borrower(s). A guarantor is not a borrower.
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My opinion only. Not legal advice. Say you'll haunt me - Stone Sour
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#1239145 - 08/26/09 01:09 PM
Re: New Reg Z Final Rule - Just Published
RR Joker
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10K Club
Joined: Aug 2002
Posts: 47,532
Bloomington, IN
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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.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.
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#1239215 - 08/26/09 01:52 PM
Re: New Reg Z Final Rule - Just Published
Dan Persfull
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Gold Star
Joined: Feb 2005
Posts: 313
sd
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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
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10K Club
Joined: Nov 2000
Posts: 18,763
Central City, NE
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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. 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
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10K Club
Joined: Aug 2002
Posts: 47,532
Bloomington, IN
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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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The opinions expressed are mine and they are not to be taken as legal advice.
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#1239680 - 08/26/09 06:25 PM
Re: New Reg Z Final Rule - Just Published
Dan Persfull
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10K Club
Joined: Nov 2002
Posts: 20,656
The Swamp
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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!
_________________________
My opinion only. Not legal advice. Say you'll haunt me - Stone Sour
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#1239747 - 08/26/09 06:59 PM
Re: New Reg Z Final Rule - Just Published
Jerod Moyer
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Junior Member
Joined: Dec 2002
Posts: 31
Missouri
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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
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Power Poster
Joined: Aug 2001
Posts: 7,351
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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. 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!!!
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The more you sweat in training, the less you bleed in battle.......
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#1240022 - 08/27/09 12:20 PM
Re: New Reg Z Final Rule - Just Published
RR Joker
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Platinum Poster
Joined: Nov 2005
Posts: 614
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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! 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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CRCM
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#1240028 - 08/27/09 12:37 PM
Re: New Reg Z Final Rule - Just Published
MarieR
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Power Poster
Joined: Nov 2008
Posts: 4,132
Somewhere in the middle
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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! 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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I'm only responsible for what I say, not for what you understand.
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#1240034 - 08/27/09 12:41 PM
Re: New Reg Z Final Rule - Just Published
DD Regs
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Junior Member
Joined: Mar 2007
Posts: 33
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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
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10K Club
Joined: Nov 2002
Posts: 20,656
The Swamp
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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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My opinion only. Not legal advice. Say you'll haunt me - Stone Sour
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