My department has a request to make a consumer unsecured loan with a parcel of land being taken as an abundance of caution. The customer more than qualifies for the loan on an unsecured basis. Is there anything compliance wise that is required or not required. I have worked for a # of Banks over the years and everyone seems to have a different definition of abundance of caution. Since these types of loans are normally reserved for small business and commercial, we have questions on this consumer request. I would appreciate any help you can provide. Specifically, I am looking to address three areas: 1) Valuation of the RE being taken as an abundance of caution, required or not 2) Title Insurance or Title Report, required or not and 3) Recordation of the Mortgage/DOT . I understand that 2 & 3 are probably policy issues not really compliance but any insight would be appreciated.

Abundance of caution gets you out of some appraisal requirements. It has no impact on most any other regulatory requirement, including consumer disclosures. How you choose to document the loan, is a question for your legal counsel.

Flood also applies.

Al

Just to confirm for my own understanding, from a consumer regulatory standpoint, if the bank takes the dwelling as collateral through AOC, then all disclosure requirements apply (i.e. TIL, HUD, GFE, flood, etc.) So these loans would also be subject to the new Dodd-Frank requirements for qualified mortgages, etc. is that correct? Thank you!