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#1704118 - 05/29/12 08:01 PM Property Tax Loans
QueenBB Offline
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Joined: Jan 2006
Posts: 190
TX
State of Texas---Person has property tax lien on property. Went to an established company that makes those types of loans (with all of the appropriate "licensing/credentials)for a loan to pay off tax lien with the property of collateral. Bank proposes to buy and service loans from said company. Any problems the bank needs to be aware of??? Is there any type of licensing/credentials required of the bank that purchases those loans?

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Lending Compliance
#1706508 - 06/05/12 01:19 PM Re: Property Tax Loans QueenBB
QueenBB Offline
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Joined: Jan 2006
Posts: 190
TX
Does anyone want to chime in with an opinion?

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#1706517 - 06/05/12 01:28 PM Re: Property Tax Loans QueenBB
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 79,293
Galveston, TX
If the borrower can't pay their taxes, what makes you think they can pay the loan to pay the taxes. You will need to review underwriting criteria carefully. These are usually collateral based loans and not made on the strength of the borrower and not the typical loans you see made by a bank. I also assume that they will be secured by the property and if residential, all TIL and RESPA disclosure will apply.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#1706637 - 06/05/12 03:03 PM Re: Property Tax Loans rlcarey
QueenBB Offline
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Joined: Jan 2006
Posts: 190
TX
The bank would be purchasing the loans from the company that made them to the borrower. The borrower would be repaying the loan to our bank. In that case, would our bank still need to have all of the disclosures? The loans are purchased.

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#1706663 - 06/05/12 03:29 PM Re: Property Tax Loans QueenBB
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 79,293
Galveston, TX
You might start by research what liabilities an assignee might have on the loans. Such as the new provisions to the TILA within the DFA:

SEC. 1413. DEFENSE TO FORECLOSURE.

Section 130 of the Truth in Lending Act (15 U.S.C. 1640)
is amended by adding at the end the following new subsection:

(k) DEFENSE TO FORECLOSURE.—

(1) IN GENERAL.—Notwithstanding any other provision of law, when a creditor, assignee, or other holder of a residential mortgage loan or anyone acting on behalf of such creditor, assignee, or holder, initiates a judicial or nonjudicial foreclosure of the residential mortgage loan, or any other action to collect the debt in connection with such loan, a consumer may assert a violation by a creditor of paragraph (1) or (2) of section 129B(c), or of section 129C(a), as a matter of defense by recoupment or set off without regard for the time limit on a private action for damages under subsection (e).
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#1706683 - 06/05/12 03:40 PM Re: Property Tax Loans rlcarey
QueenBB Offline
100 Club
Joined: Jan 2006
Posts: 190
TX
Thanks for the input.

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