Just listened to an FDIC webinar where a question was asked that if the bank accepts partial payments, do we show that as a non-amortizing feature on the LAR? FDIC said Yes, you report that as a non-amortizing feature. That doesn’t sound right to me.
1003.4(a)(27)(iv): Any other contractual term that would allow for payments other than fully amortizing payments, as defined in Regulation Z, 12 CFR 1026.43(b)(2), during the loan term, other than the contractual terms described in this paragraph (a)(27)(i), (ii), and (iii).
1026.43(b)(2) Fully amortizing payment means a periodic payment of principal and interest that will fully repay the loan amount over the loan term.
Our Note calls for fully amortizing payments, however on the TRID disclosures, we check the box under Partial Payments that says, “your lender may accept payments that are less than the full amount due (partial payments) and apply them to your loan.†We do this for all loans, we do not reject payments. It is not a "contractual term", it is just what we do. So, based on the webinar, all of our loans will show Code 1 for YES for non-amortizing feature on the LAR?
Is that how others interpret this??