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#1255286 - 09/23/09 02:49 PM Borrower using someone else's home as collateral
mstark Offline
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Joined: Mar 2006
Posts: 336
We a debt consolidation loan in which the borrowers are using their father's house as collateral on the loan. Who signs the early docs? (GFE, ETIL, Servicing) There is no debt owed on the house.

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Lending Compliance
#1255333 - 09/23/09 03:29 PM Re: Borrower using someone else's home as collateral mstark
David Dickinson Offline
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David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
The borrower(s) sign all disclosures. They are prepared with only the borrower's names on them. However, the father gets the RofR. Here's an excerpt from our Lending Manual about 3rd party releases. You can find this Manual in the BOL Store:

When a 3rd party release of a principal dwelling is involved:
If the 3rd party lives in the house and has an ownership in the house, the 3rd party must receive all disclosures (prepared for the borrowers) and a rescission notice. Bankerís Compliance Consulting suggests that the bank prepare a letter that may be signed by the 3rd party that attests to the fact that the 3rd party received a copy of the note, Truth in Lending disclosure, Right of Rescission notice, HUD-1 settlement statement and HOEPA disclosure if applicable.
David Dickinson

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