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#2055166 - 12/21/15 06:16 PM prequal certificate?
Chocaholic Offline
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Joined: Aug 2005
Posts: 443
Northwest
Is anyone doing these in the post TRID environment? Our lenders are saying must do to be competitive,. The information captured is:
purchase price (goal price no Purchase and sale yet); loan amount; Max. LTV%; Loan type; Term yrs; Max PITI; amount of funds to close; and we state the following wiggle room language.

This Pre-qualification is based on a preliminary interview. The information that was provided by Borrower has not
been fully substantiated. Final Approval is subject to submitting an application, satisfactory credit review, clear and acceptable preliminary title, identification of property and acceptable
appraisal of the subject property, verification of funds to close and any other pertinent documentation required by the investor.
This is not a commitment to lend and applies to Bank products only. This certificate expires 30 days from
the date below.
Any problems with TRID (in my mind since property is not yet identified it is not TRID- is this correct) ? Any other regs. (HMDA, ECOA etc.) Should we track these?

Any help would be greatly appreciated.

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TRID - TILA/RESPA Integrated Disclosures Rule
#2055174 - 12/21/15 06:49 PM Re: prequal certificate? Chocaholic
JC (Darth HMDA) Offline
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JC (Darth HMDA)
Joined: Dec 2013
Posts: 1,399
CA
We do not issue pre-qual certificates but we do allow people to allow for pre-qualification. (Note - this is different from an established pre-approval program which our Bank currently does not have).

IMHO, based on the information you collect, you have not triggered an application under TRID so I don't believe you would have any issues. Same for HMDA.

The applicant does not have a property identified, nor are you collecting income (based on what you have stated).

Good luck.
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The opinions expressed are mine, do not represent the opinions of my employer, and they are not to be taken as legal advice.

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#2055175 - 12/21/15 06:52 PM Re: prequal certificate? Chocaholic
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
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Posts: 21,293
Pay attention to B for timing, adverse action, and the appraisal disclosure.
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HMDA/CRA Training/Consulting/Mapping
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www.kaybeescomplianceinsights.com

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#2055188 - 12/21/15 07:46 PM Re: prequal certificate? Kathleen O. Blanchard
Chocaholic Offline
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Joined: Aug 2005
Posts: 443
Northwest
Kaybee,

When would Reg. B kick in... since we don't have the six items necessary to have an application... in my mind then, once the customer comes in to apply & has the property Identified... then the clock starts ticking.. Did I miss something?

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#2055189 - 12/21/15 07:47 PM Re: prequal certificate? JC (Darth HMDA)
Chocaholic Offline
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Joined: Aug 2005
Posts: 443
Northwest
Thank you for your insight Killin- hope you have a wonderful holiday!
Last edited by Chocaholic; 12/21/15 07:57 PM.
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#2055202 - 12/21/15 08:36 PM Re: prequal certificate? Chocaholic
Dan Persfull Offline
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Dan Persfull
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Posts: 47,517
Bloomington, IN
When would Reg. B kick in... since we don't have the six items necessary to have an application

There is no such requirement in Reg. B. Review 1002.2(f) and its Commentary.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#2055204 - 12/21/15 08:41 PM Re: prequal certificate? Chocaholic
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
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Reg B has a much much broader definition of application than the other regulations. The denial of a simple inquiry is a denied application.
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Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

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#2055238 - 12/21/15 10:49 PM Re: prequal certificate? Kathleen O. Blanchard
Chocaholic Offline
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Joined: Aug 2005
Posts: 443
Northwest
Thank you both...I read the section and commentary... I think keeping a tight reign on the process will be the challenge. Just for clarification then as long as I do not have a property identified in any of these, even if I need to issue a decline notice- there is no HMDA requirement. Correct?

A follow-up thought, as long as a pre-qual certificate is provided for some amount (even if it isn't what they thought they might want to borrow if they had an expectation which is not always the case) there is no requirement for an adverse action-correct?

Perhaps I am over simplifying this-

As it has been explained to me-this tool is to let potential borrowers know what price range, down payment & max. PITI they should consider shopping for given the limited information provided. It stands to reason, if a fully documented & verified application is provided they may be able to qualify for more.. and that option is covered in the wiggle language. Am I still not being cautious enough?

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#2055246 - 12/22/15 11:06 AM Re: prequal certificate? Chocaholic
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
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It would not be an application for HMDA or TRID.
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Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

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#2055260 - 12/22/15 01:18 PM Re: prequal certificate? Chocaholic
rlcarey Online
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rlcarey
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Posts: 83,223
Galveston, TX
I think you need to dig deeper on the claims of the loan officers. These are really worthless pieces of paper and in most areas mean nothing to R/E brokers or sellers anymore. Most R/E brokers do their own prequal calculations on their own clients. Your LO's might still be living in the 60's.
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#2055861 - 12/28/15 07:49 PM Re: prequal certificate? rlcarey
Chocaholic Offline
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Joined: Aug 2005
Posts: 443
Northwest
That is entirely possible,

However they assure me they are very much in evidence here and by not providing they are loosing deals- I am skeptical as in my past they were not all that well received, but want to make sure if done, we are not setting ourselves up for additional compliance risk and by providing I am eliminating one reason for not making lending goals...

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#2055864 - 12/28/15 08:13 PM Re: prequal certificate? Chocaholic
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
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Posts: 21,293
It can be very regional, and many banks do still offer them as a way for potential applicants to get an idea of their purchasing range, not necessarily to give to sellers or agents.
_________________________
Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

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