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#2200163 - 12/07/18 08:45 PM Taking Real Estate Loan Applications
newyork Offline
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Registered: 08/26/08
Posts: 375
what are the pros and cons of taking real estate loan applications via, Telephone or email or internet?
We are a small bank and we normally take all applications via face to face. Are there any draw backs when taking applications via other ways?

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#2200281 - 12/10/18 10:10 PM Re: Taking Real Estate Loan Applications [Re: newyork]
newyork Offline
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Registered: 08/26/08
Posts: 375
what are the pros and cons of taking real estate loan applications via, Telephone or email or internet?
We are a small bank and we normally take all applications via face to face. Are there any draw backs when taking applications via other ways?

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#2200319 - 12/11/18 02:46 PM Re: Taking Real Estate Loan Applications [Re: newyork]
Adam Witmer Offline
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Registered: 09/21/10
Posts: 1627
There are quite a few variables which will potentially change the answer to this.

For example, if you aren't seeing the applicants in person at all, your BSA/CIP policy may need adjusted. Also, if you are a HMDA bank, there are a few quirks in collecting Demographic Information if you don't see an applicant in person initially but do see them later. For TRID, I have seen challenges in the logistics of making sure disclosures go out at the right time.
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#2200414 - 12/12/18 01:53 PM Re: Taking Real Estate Loan Applications [Re: newyork]
newyork Offline
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Registered: 08/26/08
Posts: 375
ok, thank you for your input. On another question, do we have to have a paper loan application in the file, even if an over the phone interview or email interview is taking place? Does an actual paper loan application have to be signed and dated by borrower?

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#2200416 - 12/12/18 02:04 PM Re: Taking Real Estate Loan Applications [Re: newyork]
rlcarey Online
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Registered: 07/16/01
Posts: 68944
Loc: Galveston, TX
You are required to maintain written applications under Regulation B for certain transactions, but in practicality, if you don't maintain records of a home loan application in one form or another, how could you ever prove your HMDA reporting data is correct?

1002.4(c) Written applications. A creditor shall take written applications for the dwelling-related types of credit covered by §1002.13(a).


Official Interpretation

Paragraph 4(c)

1. Requirement for written applications. Model application forms are provided in Appendix B to the regulation, although use of a printed form is not required. A creditor will satisfy the requirement by writing down the information that it normally considers in making a credit decision. The creditor may complete an application on behalf of an applicant and need not require the applicant to sign the application.

2. Telephone applications. A creditor that accepts applications by telephone for dwelling-related credit covered by §1002.13 can meet the requirement for written applications by writing down pertinent information that is provided by the applicant.

3. Computerized entry. Information entered directly into and retained by a computerized system qualifies as a written application under this paragraph. (See the commentary to §1002.13(b), Applications through electronic media and Applications through video. )
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#2200447 - 12/12/18 03:57 PM Re: Taking Real Estate Loan Applications [Re: newyork]
newyork Offline
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Registered: 08/26/08
Posts: 375
What if the transactions are not HMDA reportable loans? They are just construction interim only loans, with no permanent terms. Will these type of loans require an actual written loan application ?

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#2200457 - 12/12/18 04:44 PM Re: Taking Real Estate Loan Applications [Re: newyork]
David Dickinson Offline
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Registered: 11/28/00
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Loc: Central City, NE
Reg B (not HMDA - Reg C) is what dictates the application requirement. Randy quoted the regulation for you in his last post. If you look at §1002.13(a) & 4(c) it says you must have written applications for loans to purchase or refinance a principal dwelling that is secured by the dwelling. There's nothing about temporary or permanent financing.

Again, the borrower never has to complete the application by regulation (although it is prudent). This is a loan officer requirement.
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http://www.bankerscompliance.com

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#2200463 - 12/12/18 04:55 PM Re: Taking Real Estate Loan Applications [Re: newyork]
burke116 Offline
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Registered: 06/23/14
Posts: 406
Loc: RVA
Quote:
There's nothing about temporary or permanent financing.


1002.4(c) points to loans covered by 1002.13(a). 1002.13(a) actually does provide an exemption for temporary construction loans in the official interpretation:

3. Temporary financing. An application for temporary financing to construct a dwelling is not subject to § 1002.13. But an application for both a temporary loan to finance construction of a dwelling and a permanent mortgage loan to take effect upon the completion of construction is subject to § 1002.13.

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#2200513 - 12/12/18 08:01 PM Re: Taking Real Estate Loan Applications [Re: newyork]
David Dickinson Offline
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Registered: 11/28/00
Posts: 18114
Loc: Central City, NE
Good point burke. I stand corrected.
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#2200514 - 12/12/18 08:04 PM Re: Taking Real Estate Loan Applications [Re: newyork]
burke116 Offline
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Registered: 06/23/14
Posts: 406
Loc: RVA
Given that however, I don't know why anyone wouldn't want an application in the file.

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#2200550 - 12/12/18 11:23 PM Re: Taking Real Estate Loan Applications [Re: newyork]
rlcarey Online
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Registered: 07/16/01
Posts: 68944
Loc: Galveston, TX
Most every compliance requirement starts its timing with the application date - how could you ever manage the compliance risks without a documented application and the date received??

Most bank have even implemented application processes for commercial loans - I know of no banks that do not document consumer loan applications in some manner including the date received.
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