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#1576076 - 07/11/11 02:33 PM
Re: Reg B-Notice of Intent to Apply For Joint Credit
ougirl
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10K Club
Joined: Aug 2002
Posts: 47,530
Bloomington, IN
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Reg B has always applied to business (commercial) purpose credit. See the Commentary to 202.1.
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The opinions expressed are mine and they are not to be taken as legal advice.
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#1576079 - 07/11/11 02:38 PM
Re: Reg B-Notice of Intent to Apply For Joint Credit
Dan Persfull
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Diamond Poster
Joined: Mar 2003
Posts: 1,035
OK
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We don't always have a business credit application on our commercial loans but we have been able to use a signed guaranty agreement by all owners of the account as joint intent. If we do not have those in the file then our lenders have to have them sign the joint intent. This has been fine with our external auditors and examiners.
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#1576094 - 07/11/11 02:59 PM
Re: Reg B-Notice of Intent to Apply For Joint Credit
ougirl
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10K Club
Joined: Aug 2002
Posts: 47,530
Bloomington, IN
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The joint intent has to be established at the time of application, whether it's written or oral. If you have not been doing this and getting by with it you have been lucky.
If your written loan policy requires that all closely held businesses must be guaranteed by the principals then the joint intent is not needed, or if the the guaranty is an underwriting condition placed on the request the intent is not needed.
Also: We have several that are companies owned by husband but wife guarantees.
I hope you have some very strong and compelling reasons asking the wife to guarantee the debt if she is not part of the corporation otherwise you have more serious issues than not getting the intent established.
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The opinions expressed are mine and they are not to be taken as legal advice.
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#1576192 - 07/11/11 04:51 PM
Re: Reg B-Notice of Intent to Apply For Joint Credit
ougirl
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10K Club
Joined: Jul 2001
Posts: 83,364
Galveston, TX
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"We have several that are companies owned by husband but wife guarantees."
I hope the wives bring something to the party, otherwise these are classic examples of signature rule violations.
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#1595202 - 08/23/11 04:06 PM
Re: Reg B-Notice of Intent to Apply For Joint Credit
rlcarey
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100 Club
Joined: May 2010
Posts: 180
Alabama
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Just to make sure I understand - if we have a loan that is in the names of the individuals (husband and wife) and the purpose of the loan is business (put cash into the business) - we should have the Intent to Apply for Joint Credit" form completed - Correct?
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#1595209 - 08/23/11 04:14 PM
Re: Reg B-Notice of Intent to Apply For Joint Credit
traveler
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Posts: 21,293
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#1595766 - 08/24/11 03:32 PM
Re: Reg B-Notice of Intent to Apply For Joint Credit
rlcarey
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Diamond Poster
Joined: Feb 2008
Posts: 2,207
Deleted
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"We have several that are companies owned by husband but wife guarantees."
I hope the wives bring something to the party, otherwise these are classic examples of signature rule violations. I just found one of these. Arg. I know we have a violation... so where do we go from here? So far I know we'll have to re-train and I want to do a full scrub of all loans with joint spouses or spouses that guarantee to see if this was an isolated incident. What else? Is it worth it to try and obtain her intent to guarantee now? Anyone have any Advil?
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Innerpartysystem
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#1595772 - 08/24/11 03:40 PM
Re: Reg B-Notice of Intent to Apply For Joint Credit
manimal
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10K Club
Joined: Aug 2002
Posts: 47,530
Bloomington, IN
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Is it worth it to try and obtain her intent to guarantee now? The intent must be established at application, not at some point after consummation. Getting their intent now would not resolve the issue. If the signatures were obtained in violation of law then most likely in a court proceedings their liability for the debt will be dismissed. The only way to effectively cure a spousal signature requirement violation is to release them from their liability/guaranty.
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#1595798 - 08/24/11 04:02 PM
Re: Reg B-Notice of Intent to Apply For Joint Credit
Dan Persfull
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Diamond Poster
Joined: Feb 2008
Posts: 2,207
Deleted
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Thank you for your insight!
I think releasing her liability is what I will recommend to the LO.
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Innerpartysystem
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#1597801 - 08/29/11 07:57 PM
Re: Reg B-Notice of Intent to Apply For Joint Credit
manimal
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100 Club
Joined: May 2010
Posts: 180
Alabama
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Clarification needed: If loan is in the name of tow businesses - is Intent to Apply for Joint Credit required?
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#1597842 - 08/29/11 08:27 PM
Re: Reg B-Notice of Intent to Apply For Joint Credit
traveler
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10K Club
Joined: Aug 2002
Posts: 47,530
Bloomington, IN
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Yes. They are applicants under Reg. B.
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The opinions expressed are mine and they are not to be taken as legal advice.
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#1771071 - 12/28/12 06:30 PM
Re: Reg B-Notice of Intent to Apply For Joint Credit
ougirl
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100 Club
Joined: Feb 2012
Posts: 196
GA
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If I have an application with XYZ Corp I and XYZ Corp II as borrowers and Mickey Mouse and Donald Duck as Guarantors - I would need a Notice of Joint Intent for the two business entities, but not for the guarantors correct?
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#1854382 - 09/20/13 09:32 PM
Re: Reg B-Notice of Intent to Apply For Joint Credit
ougirl
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100 Club
Joined: Jun 2010
Posts: 207
Chatsworh PA
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If there is only 1 owner of the business is this still required?
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#1854455 - 09/23/13 12:57 PM
Re: Reg B-Notice of Intent to Apply For Joint Credit
ougirl
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10K Club
Joined: Aug 2002
Posts: 47,530
Bloomington, IN
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If you are referring to the one owner being a required guarantor then see Jerod's above comment.
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The opinions expressed are mine and they are not to be taken as legal advice.
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#2010174 - 04/24/15 05:26 PM
Re: Reg B-Notice of Intent to Apply For Joint Credit
Dan Persfull
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Power Poster
Joined: Jul 2007
Posts: 3,298
only if I want to....
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I know this is beating a dead horse slap to death and I'm sorry but we are having some disagreements with LO's...know you guys never have that around your place right Reading the regulation does not seem to get us seeing eye to eye either b/c one will interpret one way and one another... I have a loan that is to ABC, LLC. We have done a line of credit loan for them b/c they have a car lot and purchase individual cars at different places one at a time. John Apple and Jane Apple own the business. Financials are submitted for LLC once a year...credit pulled on both (once a year not every time they do a loan)...guarantor forms signed by both once a year and each loan... In a case such as this does Joint Intent need to be indicated in each file each time they purchase a new car for their fleet?
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#2010281 - 04/24/15 07:28 PM
Re: Reg B-Notice of Intent to Apply For Joint Credit
David Dickinson
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Power Poster
Joined: Jul 2007
Posts: 3,298
only if I want to....
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You could OR at the beginning of the year, you could establish one application for all credit requests anticipated. 1 Joint Intent at that time would cover all future loans already discussed, applied for and anticipated.
However, any loans outside of what was already jointly applied for at that time would trigger a new application/new join intent requirement. Thanks David! So the Loan Officer's argument is that this is an LLC "managed" by 1 member...but we in compliance say that is incorrect and at some point like as you state either at the beginning of the renewal process for this "fleet" of vehicles or at each application...one of the two we need to have them indicate joint intent since they are both owners and guarantors. Did I interpret that correctly as to what you are saying?
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Trust in the Lord with ALL your heart...Prov 3:5-6
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