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#2054185 - 12/15/15 03:42 PM
Re: Extension
ComplianceNewby
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10K Club
Joined: Jul 2003
Posts: 17,395
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read this Unless I'm misreading, if the loan hasn't yet matured, you can do a modification/change in terms and it won't be subject to TRID. Hopefully someone with experience doing modifications will weigh in here.
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#2054411 - 12/16/15 04:03 PM
Re: Extension
ComplianceNewby
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Power Poster
Joined: Jun 2003
Posts: 7,650
Florida
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You better check state law. I do not know of too many cases where one person can unilaterally bind another
_________________________
Integrity. With it, nothing else matters. Without it, nothing else matters.
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#2057581 - 01/08/16 07:31 PM
Re: Extension
ComplianceNewby
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Member
Joined: Apr 2011
Posts: 70
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Hi David, quick follow-up question about your joint intent statement.
Could you provide the regulatory requirement for getting an updated joint intent form when changing the terms of an existing account?
Thank you
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#2057762 - 01/11/16 03:46 PM
Re: Extension
ComplianceNewby
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10K Club
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
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(j) Credit means the right granted by a creditor to an applicant to defer payment of a debt, incur debt and defer its payment, or purchase property or services and defer payment therefor.
Official Interpretation
2(j) Credit.
1. General. Regulation B covers a wider range of credit transactions than Regulation Z (Truth in Lending). Under Regulation B, a transaction is credit if there is a right to defer payment of a debt—regardless of whether the credit is for personal or commercial purposes, the number of installments required for repayment, or whether the transaction is subject to a finance charge.
You are extending debit, deferring payment, for an additional 3 years. Without a POA the joint obligor does not have the right to further extend the obligation of the other joint obligor without their consent.
I can assure you I would have you in court in a heart beat if you extended a credit I'm obligated on without my joint intent to extend that credit.
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The opinions expressed are mine and they are not to be taken as legal advice.
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#2059884 - 01/21/16 10:15 PM
Re: Extension
Dan Persfull
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Gold Star
Joined: Nov 2007
Posts: 437
Nevada
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For years, we have been requiring re-verification of joint intent on renewals. Realizing this could be done a couple of ways, we chose to require an updated application to ensure joint intent is noted as our re-verification procedure.
Now, once again, this is coming into question.The argument is where in REG B this is noted. I've used yours and David's comments both now (and for several years), referencing REG B 2(j) credit. The argument I am now getting is from 2(f), the section highlighted that says the definition of application "does not include an amount of credit within previously established credit limit."
(f) Application means an oral or written request for an extension of credit that is made in accordance with procedures used by a creditor for the type of credit requested. The term application does not include the use of an account or line of credit to obtain an amount of credit that is within a previously established credit limit. A completed application means an application in connection with which a creditor has received all the information that the creditor regularly obtains and considers in evaluating applications for the amount and type of credit requested (including, but not limited to, credit reports, any additional information requested from the applicant, and any approvals or reports by governmental agencies or other persons that are necessary to guarantee, insure, or provide security for the credit or collateral). The creditor shall exercise reasonable diligence in obtaining such information.
So, once again, having to defend the Compliance stance joint intent must be re-verified on loans coming up for renewal. Your opinions, please, and any other supporting info you have, Dan and David? Thanks in advance so much for your help.
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#2059895 - 01/21/16 11:52 PM
Re: Extension
ComplianceNewby
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10K Club
Joined: Dec 2000
Posts: 21,293
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The statement you have highlighted is referencing use of credit in a situation such as a draw on a line. Each use of the line is not a new application. In the case of a matured loan, you need to ensure that all parties still want to be part of the transaction, which is essentially a new transaction. While not specifically on point, this presentation from the FRB speaks to the concept: "If an individual applicant does not qualify for credit, the bank may require an additional party, such as a co-signer or guarantor, but the creditor may not require that the additional party be the applicant’s spouse –Note on Renewals: If the borrower’s creditworthiness is reevaluated when the credit is renewed, a creditor must determine whether the additional party is still warranted, and, if not, release the additional party." https://consumercomplianceoutlook.org/ou...99ec6daa11.ashx
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