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#2050449 - 11/19/15 06:31 AM Loan Amt Exceeds Purchase Price HELP!!!
THEBANKERLADY Offline
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THEBANKERLADY
Joined: Nov 2013
Posts: 107
We have a loan that the customer is wanting to purchase a residence (to be future primary residence) and also refi their current primary residence and term out (to have lower payment) until their current home can sell. Let's just say the sales price is 200,000.00 and they are refinancing the 30,000.00 that they currently still owe on their current primary residence. Lets just say they are putting 10,000.00 down. In this case, the loan amount exceeds the purchase price. Since the CD that includes the seller does not show a Total Payoffs and Payments section like the Alternative cash to close, where would you include the payoff to our bank from our own borrower? Our LOS does not input that on our CD, but the "dummy" one that the attorney prepared, was manipulated to put it under Section K. My complete understanding is that the CFPB did not account for a transaction to where there is both a purchase and refinance situation. You don't even want to know what problems we encountered when we tried to produce the ROR forms... Nightmare loan! Has anyone come across a situation similar to this before and if you did, how did you handle it?

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TRID - TILA/RESPA Integrated Disclosures Rule
#2050472 - 11/19/15 02:34 PM Re: Loan Amt Exceeds Purchase Price HELP!!! THEBANKERLADY
Laurlee Offline
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Joined: Sep 2015
Posts: 20
We've had multiple of those types of transactions since starting. We disclosed the payoff in Section K (line 4). Only the Sale Price (vs Appraised Value of all properties) is disclosed since that is the requirement for a purchase.

I'm surprised your LOS will not let you enter any more items into Section K. You should not be limited to the three prefilled lines. I would definitely be contacting them!

The issue I have had is the "Calculating Cash to Close" section will not show cash to the borrower in a purchase transactions (and I have had a few of those!)--it will only disclose ($0). However, it will show on the Summary of Transaction Section.

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#2065274 - 02/22/16 05:01 PM Re: Loan Amt Exceeds Purchase Price HELP!!! THEBANKERLADY
DoubleNickel Offline
Junior Member
Joined: Jan 2013
Posts: 25

On a loan with multiple properties as collateral where one is a purchase, are we required to show the value of all properties securing the loan or just the 'sale price' of the property being purchased? Is there an interpretation to support the statement "Only the Sale Price (vs Appraised Value of all properties) is disclosed since that is the requirement for a purchase." ?
37(a)(7) Sale price.
1. Estimated property value. In transactions where there is no seller, such as in a refinancing, § 1026.37(a)(7)(ii) requires the creditor to disclose the estimated value of the property identified in § 1026.37(a)(6) at the time the disclosure is issued to the consumer. The creditor may use the estimate provided by the consumer at application, or if it has performed its own estimate of the property value by the time the disclosure is provided to the consumer, use that estimate. If the creditor has obtained any appraisals or valuations of the property for the application at the time the disclosure is issued to the consumer, the value determined by the appraisal or valuation to be used during underwriting for the application is disclosed as the estimated property value. If the creditor has obtained multiple appraisals or valuations and has not yet determined which one will be used during underwriting, it may disclose the value from any appraisal or valuation it reasonably believes it may use in underwriting the transaction. In a transaction that involves a seller, if the sale price is not yet known, the creditor complies with § 1026.37(a)(7) if it discloses the estimated value of the property that it used as the basis for the disclosures in the Loan Estimate.

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#2065313 - 02/22/16 06:47 PM Re: Loan Amt Exceeds Purchase Price HELP!!! THEBANKERLADY
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,710
Bloomington, IN
are we required to show the value of all properties securing the loan or just the 'sale price' of the property being purchased

.37(a)(7)(i) requires the sales price where there is a seller.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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