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#1302337 - 12/10/09 03:25 AM
Re: Regulation Z changes - 10-01-09
nghcompliance
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10K Club
Joined: Jul 2001
Posts: 83,364
Galveston, TX
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Renew the loan in a manner that you don't trigger a refinance (226.20) and then there are no new disclosures and HPML is taken out of the picture.
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#1306421 - 12/15/09 06:33 PM
Re: Regulation Z changes - 10-01-09
Princess Romeo
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Power Poster
Joined: Oct 2009
Posts: 9,105
OK
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As far as figuring repayment ability for HPML loans....if we have a co-signer, are we supposed to verify their repayment ability as well? Also, what about giving the Credit Score disclosure to the co-signer? Required?
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#1310743 - 12/21/09 09:18 PM
Re: Regulation Z changes - 10-01-09
RR Joker
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Member
Joined: Sep 2009
Posts: 54
Kansas
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Is there a disclosure we have to provied to the customer if their mortgage loan is a high price mortgage loan?
We keep going back and forth over this, it would be great to have any help! Thanks!
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#1310757 - 12/21/09 09:23 PM
Re: Regulation Z changes - 10-01-09
JBledsoe
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Gold Star
Joined: Jun 2007
Posts: 447
New England
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You don't have to give the customer any disclosure if the loan is a HPML.
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Sometimes the questions are complicated and the answers are simple. - Dr. Suess
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#1324660 - 01/14/10 05:37 PM
Re: Regulation Z changes - 10-01-09
RR Joker
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New Poster
Joined: Mar 2008
Posts: 3
Georgia
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I am writing in reference to the below Q&A from the GURU section on 1/11/10
Question: When we are doing a modification to a five year balloon, do we have to take into consideration the repayment ability for Higher Priced Mortgages?
Answer: No, if you are not refinancing the loan, it is not subject to the HPML requirements. Refer to §226.20(a).
First published on BankersOnline.com 1/11/10
Like many community banks, we had for many years “renewed” maturing balloon loans with a new note but referenced it as a renewal loan. In preparation for the October 1 effective date of the rules for HPML loans, I prepared a consumer note Modification Agreement and had it reviewed by counsel. I believed that 226.20(a) gave us this ability. We had good procedures and even prepared a renewal form that demonstrated the lender was actually reviewing the borrowers current DTI, LTV, and other important factors including credit for any negative changes as part of their underwriting. I believed that this procedures more closely followed the original agreement with our borrowers in which we agreed to amortize for a certain period but modify the rate and term every 1, 2,or 3 years.
When our outside Audit firm came to do Loan Compliance, they explained that we could not do these modifications as they had been assured by FDIC that regulators would look on these modifications the same way they would look on refinancing into open end HELOCs; as a way to avoid compliance with this new regulation. We were urged to discontinue the practice of preparing modifications and to go to an adjustable product with a term greater than 7 years to stay in compliance with HPML.
I then structured several Adjustable Rate products to meet the needs of our maturing 1,2,and 3 year balloons; Not a popular product with our lenders or our borrowers.
This was a long way around to ask if you have further information from regulators that would assure us they will not look on the modifications as a means of avoiding compliance?
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#1344801 - 02/17/10 08:03 PM
Re: Regulation Z changes - 10-01-09
Sinatra Fan
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Member
Joined: Jul 2008
Posts: 92
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Was not sure where to put this questions-RESPA or Reg Z (HPML).
Our loan officers determine a HPML at loan approval with the APR in effect at that time and again re-verifying at consummation with the final APR.
If loan is not a HPML, we would not require an escrow account and this would be reflected on the GFE as “NO we do not require an escrow account for your loan”, however, at consummation a loan is determined to be a HPML now requiring escrow. Am I correct that this should not affect the GFE ? Am I comparing apples to oranges?
Last edited by Pounder; 02/17/10 10:14 PM.
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#1348400 - 02/24/10 05:47 PM
Re: Regulation Z changes - 10-01-09
RR Joker
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Gold Star
Joined: Nov 2003
Posts: 277
East Texas
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OK, point me in the right direction if this has been addressed.
Proving repayment ability for self-employed persons. As far as we can tell, the easiest way to confirm income would be the tax return. However, you then have to be able to determine what is business expense; what is actual personal income, etc. Has anyone found a way to do this that simplifies it at all? Would taking the deposits for the year that are from income and netting out expenses be just as acceptable? What are some of you doing for these cases?
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#1350690 - 03/01/10 09:04 PM
Re: Regulation Z changes - 10-01-09
4newt
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New Poster
Joined: May 2009
Posts: 15
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Here's another question that I know was partially addressed earlier in this thread, but still not sure if the "waiting period" applies.
For someone who is NOT a borrower, but has recission rights to the the property, as I undertand it, they would not need to get an early TIL, but must be given material disclosures (final TIL). I do not think the waiting periods would apply, is that correct?
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#1350710 - 03/01/10 09:17 PM
Re: Regulation Z changes - 10-01-09
ComplyFunatic
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10K Club
Joined: Aug 2002
Posts: 47,530
Bloomington, IN
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All persons entitled to the ROR must receive a copy of the ETIL. See 226.17(d).
The waiting period does not expire until all parties entitled to receive the disclosure receives them.
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The opinions expressed are mine and they are not to be taken as legal advice.
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#1351080 - 03/02/10 05:23 PM
Re: Regulation Z changes - 10-01-09
4newt
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Gold Star
Joined: Oct 2003
Posts: 474
Texas, USA
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OK, point me in the right direction if this has been addressed.
Proving repayment ability for self-employed persons. As far as we can tell, the easiest way to confirm income would be the tax return. However, you then have to be able to determine what is business expense; what is actual personal income, etc. Has anyone found a way to do this that simplifies it at all? Would taking the deposits for the year that are from income and netting out expenses be just as acceptable? What are some of you doing for these cases? This is exactly what I'm dealing with right now? Any direction from anyone on this one???
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#1351145 - 03/02/10 06:32 PM
Re: Regulation Z changes - 10-01-09
Lissa P.
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Power Poster
Joined: Oct 2009
Posts: 9,105
OK
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Was not sure where to put this questions-RESPA or Reg Z (HPML).
Our loan officers determine a HPML at loan approval with the APR in effect at that time and again re-verifying at consummation with the final APR.
If loan is not a HPML, we would not require an escrow account and this would be reflected on the GFE as “NO we do not require an escrow account for your loan”, however, at consummation a loan is determined to be a HPML now requiring escrow. Am I correct that this should not affect the GFE ? Am I comparing apples to oranges?
Was this ever answered? My biggest question i guess is: what if your loan should have been set up with escrows, but wasn't? How, if possible, is this corrected?
Last edited by raitchjay; 03/02/10 07:13 PM.
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#1355320 - 03/10/10 07:15 PM
Re: Regulation Z changes - 10-01-09
RR Joker
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Gold Star
Joined: Nov 2003
Posts: 277
East Texas
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David, I recently listened to your webinar on 2/24/10 on lessons learned in completing GFE's & HUD 1, etc. I learned a lot, but please tell me where the fee for odering tax certificates shoud go on both the GFE and the HUD stmt.
Thank you!!
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#1355406 - 03/10/10 08:23 PM
Re: Regulation Z changes - 10-01-09
raitchjay
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Power Poster
Joined: Nov 2008
Posts: 4,132
Somewhere in the middle
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I would think you would want to be monitoring your loans before it get to closing to determine if it is going to be a HPML.
You would know when and if you need to ESCROW by your testing. If it is determined the loan will be a HPML and need ESCROW, that is a changed circumstance under which you can issue a revised GFE changing only those items related to the changed circumstance.
The GURUS can correct me if I have this wrong.
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I'm only responsible for what I say, not for what you understand.
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#1355944 - 03/11/10 05:51 PM
Re: Regulation Z changes - 10-01-09
Dan Persfull
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10K Club
Joined: Nov 2002
Posts: 20,656
The Swamp
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All persons entitled to the ROR must receive a copy of the ETIL. See 226.17(d).
The waiting period does not expire until all parties entitled to receive the disclosure receives them. Dan, I've understood this differently and want to take a minute to clarify. We always prepare a FTIL and therefore have not delivered an ETIL to all parties in a RoR transactions (based on previous discussions regarding same). Are you saying you must, regardless, even tho the FTIL will be the actual material disclosure?
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My opinion only. Not legal advice. Say you'll haunt me - Stone Sour
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#1357838 - 03/15/10 09:06 PM
Re: Regulation Z changes - 10-01-09
RR Joker
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Junior Member
Joined: Jan 2010
Posts: 34
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On a regular transaction, if you have a changed circumstance and redisclose the GFE, but the APR does not change by more than .125% above or below the disclosed APR, we don't have to redisclose the TIL. right????
The borrower requested an additional $3,000 so our "Finance Charge" figure is off from the original by $1300...but the APR is in tolerance. Do we have to redisclose the TIL?? In the past wasn't there a dollar limit on the difference in the "Finance Charge".
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#1357927 - 03/16/10 06:40 AM
Re: Regulation Z changes - 10-01-09
Parluc
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New Poster
Joined: Mar 2010
Posts: 2
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Here's how I read the regs:
The APR is considered accurate if it does not vary from the initial disclosure by more than .125% on a fixed rate mortgage and .25% on an ARM. An exception to this is provided for when the APR varies by more than the accepted tolerances.
When the APR exceeds the accepted tolerances, it is also considered accurate if
a) the actual APR results from the disclosed finance charge; and
b) the finance charge is accurate. The finance charge is considered accurate if the actual amount is not higher than $100 from what was originally disclosed or if the actual amount is less than what was originally disclosed (overdisclosed).
To be safe, if you are resdisclosing the GFE, you might as well redisclose the TIL since resdisclosure of the GFE will delay the consummation anyway because of the timing requirements.
I have not confirmed the accuracy of my interpretation with anyone yet and would like to hear from others who are more experienced with this issue.
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#1358699 - 03/17/10 01:12 PM
Re: Regulation Z changes - 10-01-09
myahn
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Power Poster
Joined: Apr 2001
Posts: 4,828
Between the lines
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myahn, my understanding is that a revised GFE does not delay closing, whereas a revised TIL does. I believe that you can give a revised GFE at the closing table and as long as the APR is within tolerance (or overdisclosed), you can proceed with the closing.
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#1359168 - 03/17/10 05:28 PM
Re: Regulation Z changes - 10-01-09
SMQ, CRCM
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Power Poster
Joined: Oct 2009
Posts: 9,105
OK
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"To be safe, if you are resdisclosing the GFE, you might as well redisclose the TIL since resdisclosure of the GFE will delay the consummation anyway because of the timing requirements."
How does re-issuing a GFE delay consummation? My understanding has been that we could re-issue a GFE at closing, wait as long as it takes the ink to dry, and close the loan (assuming we have a changed circumstance of course, like the customer asks for more money).
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