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#1654919 - 01/24/12 03:48 PM Discounted rate for autodraft disclosure
FBH Offline
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Does anyone happen to have a sample disclosure for fixed rate mortgage loans with a rate discount for for an autodraft of the mortgage payment with the same institution?
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#1654936 - 01/24/12 04:08 PM Re: Discounted rate for autodraft disclosure FBH
rlcarey Online
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This will make the loan an adjustable rate mortgage. Most banks do not do this on mortgage loans.
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#1654941 - 01/24/12 04:11 PM Re: Discounted rate for autodraft disclosure FBH
FBH Offline
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That's interesting. The last two mortgages I took out had this feature; I thought it was fairly common. I was looking at the ARM disclosure language in Reg Z as a comparison, but I didn't think it was considered an ARM.
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#1654946 - 01/24/12 04:15 PM Re: Discounted rate for autodraft disclosure FBH
rlcarey Online
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226.19(b) commentary:

5. Examples of variable-rate transactions.

(i) The following transactions, if they have a term greater than one year and are secured by the consumer's principal dwelling, constitute variable-rate transactions subject to the disclosure requirements of 226.19(b).

(B) Preferred-rate loans where the terms of the legal obligation provide that the initial underlying rate is fixed but will increase upon the occurrence of some event, such as an employee leaving the employ of the creditor, and the note reflects the preferred rate. The disclosures under 226.19(b)(1) and 226.19(b)(2)(v), (viii), (ix), and (xii) are not applicable to such loans.
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#1654951 - 01/24/12 04:17 PM Re: Discounted rate for autodraft disclosure FBH
FBH Offline
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Thanks!
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#1681395 - 03/23/12 01:14 PM Re: Discounted rate for autodraft disclosure FBH
Beachbum, CRCM Offline
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only consumer property/dwelling secured loans would be affected by this, correct?
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#1681428 - 03/23/12 01:51 PM Re: Discounted rate for autodraft disclosure FBH
DD Regs Offline
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Somewhere in the middle
Here was our work around at the CU I used to work for. Close the loan at the disclosed rate. Then, signed a "Auto Pay Credit Agreement" (or something of that title), then the system would look for Auto Pays each month.

When the sytem saw the Auto Pay, it would generate a "Auto Pay Credit" into their share draft account. (We used this for Direct Deposit and other "Auto" or "Green" type transactions)

If they stopped auto pay or Direct Deposit, they no longer got the "Credit". No tracking, no ARM agreement, and the customer can see the savings.
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#1681852 - 03/23/12 08:30 PM Re: Discounted rate for autodraft disclosure FBH
rlcarey Online
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Your TIL has to reflect the legal obligation regardless of how many documents it may be spread out upon.
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#1695036 - 05/02/12 08:32 PM Re: Discounted rate for autodraft disclosure FBH
Snowgirl Offline
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I am having trouble finding the commentary to 226.19(b) can someone direct me to where I can find it? Thank you!!!

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#1695045 - 05/02/12 08:37 PM Re: Discounted rate for autodraft disclosure FBH
Richard Insley Offline
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It's here. Scroll about half way down the page.
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#1695077 - 05/02/12 09:04 PM Re: Discounted rate for autodraft disclosure FBH
Snowgirl Offline
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Found it! Asked a little too soon - Sorry.

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