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#2196050 - 10/22/18 02:26 PM Pricing Exception to HELOC Product
Likes to Comply Offline
Diamond Poster
Joined: Nov 2008
Posts: 1,060
In the mountains
We currently have one HELOC product and therefore have one HELOC application disclosure. To meet a competitors pricing, one of our Lenders would like to offer a lower rate, a pricing exception for this one applicant. Is this going to be problem since the application disclosure would not have been for that particular pricing?
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Lending Compliance
#2196081 - 10/22/18 05:17 PM Re: Pricing Exception to HELOC Product Likes to Comply
Rocky P Online
Power Poster
Joined: Jun 2003
Posts: 7,425
Florida
LTC, I'm not going to opine about the disclosure, but about the pricing exception.

IMHO - Make sure that pricing exceptions are in policy. I usually get scared to death about ANY exceptions, because 99 out of 100 times they are to good customers, a/k/a middle age white guys, to the exclusion of minorities. If the customer asked, make sure that the bank has fully documented the other bank's pricing. Some banks will voluntarily offer all the competitor's rate, since mostly non-minorities are the ones asking, leaving lop-sided statistics for exceptions. If the LO brings up to match the other bank's rate, it should be done for all.
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#2196093 - 10/22/18 06:20 PM Re: Pricing Exception to HELOC Product Likes to Comply
burke116 Offline
Platinum Poster
Joined: Jun 2014
Posts: 542
RVA
I believe the requirement for the HELOC disclosure is to discuss how the rate is determined (index plus a margin) and to "ask us about" the current rate. Does your current product's disclosure list an actual rate?

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#2196111 - 10/22/18 07:16 PM Re: Pricing Exception to HELOC Product burke116
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Diamond Poster
Joined: Nov 2008
Posts: 1,060
In the mountains
It does not, but the historical and maximum payment examples use our current rate.

I really didn't think there was a disclosure issue, but just wanted to be sure.

With regards to any Fair Lending - the risk/compliance department has frequently reminded the LOs, CLO and CCO of the risks of pricing deviations. We can only do so much.
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#2196143 - 10/22/18 10:15 PM Re: Pricing Exception to HELOC Product Likes to Comply
Rocky P Online
Power Poster
Joined: Jun 2003
Posts: 7,425
Florida
With regards to any Fair Lending - the risk/compliance department has frequently reminded the LOs, CLO and CCO of the risks of pricing deviations. We can only do so much.

I had a wise _ _ _ LO who decided to tell me he made a loan just before the management meeting started:

LO - Hey Rocky, I made an exception to Joe and Cindy and made them a mortgage loan yesterday!
RP - That's nice Ken. How many others did you discriminate against by not giving them the same exception?
LO - Gee, I thought you would be happy.
RP - I will be if the examiners don't look at that loan during the fair lending exam.
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