Thread Options
#2198406 - 11/16/18 03:24 AM TRID Demand Feature under Commetary 1026.18(i)-2
Katherine Offline
Member
Joined: Aug 2017
Posts: 62
I was reviewing what was considered a demand feature under 1026.38(l)(2) as defined under Commentary 1026.18(i)-2 and am confused. The commentary provides, "The type of demand feature triggering the disclosures required by § 1026.18(i) includes only those demand features contemplated by the parties as part of the legal obligation. For example, this provision does not apply to transactions that covert to a demand status as a result of the consumer's default. A due-on-sale clause is not considered a demand feature."

If the legal obligation includes under the definition of default, such events such as materially false, incorrect or incomplete financial statements, representation, warranty, death, and other events/occurrences, does that mean because the legal obligation defined such as "defaults" then based on the commentary, we would disclose we do NOT have a demand feature? It would appear then that so long as circumstances or events that would trigger acceleration of the loan are defined under "Default" then "No" would be the disclosure under 1026.38(l)(2), specifically that the loan does not have a demand feature.

Any thoughts?

Return to Top
TRID - TILA/RESPA Integrated Disclosures Rule
#2198413 - 11/16/18 08:50 AM Re: TRID Demand Feature under Commetary 1026.18(i)-2 Katherine
rlcarey Online
10K Club
rlcarey
Joined: Jul 2001
Posts: 78,958
Galveston, TX
Correct. A demand feature gives the creditor the ability to demand full payment at anytime - default or not by the consumer
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#2198512 - 11/16/18 07:11 PM Re: TRID Demand Feature under Commetary 1026.18(i)-2 Katherine
Katherine Offline
Member
Joined: Aug 2017
Posts: 62
Thank you. That portion of the regulation seems surprisingly flexible.

Return to Top
#2198578 - 11/17/18 10:39 AM Re: TRID Demand Feature under Commetary 1026.18(i)-2 Katherine
rlcarey Online
10K Club
rlcarey
Joined: Jul 2001
Posts: 78,958
Galveston, TX
Well, the regulation only addresses what and when a demand feature must be disclosed. State law and other regulations will tell you if a demand clause is legal on any specific transaction.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top