Learn More - Click Here!

Thread Options
#1853929 - 09/19/13 07:01 PM skip a payment
bowlngirl Offline
Junior Member
Joined: Sep 2008
Posts: 25
My bank is looking at a skip a payment program. I am trying to find out if there are any state limitations or compliance issues for this type of program and if we choose to charge a fee. I am located in Kansas.

Thanks

Return to Top
#1854404 - 09/21/13 12:29 AM Re: skip a payment bowlngirl
RayLynch Offline
Platinum Poster
RayLynch
Joined: Oct 2003
Posts: 544
I see a potential UDAAP/unfair business practice issue in connection with how you may disclose the effect of a skip a payment program. If a customer is permitted to skip a payment then the customer will pay more interest over the life of the loan as compared to the interest they would pay on the loan as originally amortized (because the principal balance will not go down in the month the payment is skipped).

Will you adequately disclose to the borrower that if they decide to skip a payment, their cash flow will improve for the month in which the payment is skipped, but they will ultimately have to pay the skipped payment and more interest over the life of the loan? I can see regulators criticizing a skip a payment program if they think the bank isn't adequately disclosing the long term downside to the borrower in terms of having to pay more interest (which results in a greater profit to the bank).

Return to Top
#2012793 - 05/07/15 05:39 PM Re: skip a payment bowlngirl
JSD Offline
Platinum Poster
JSD
Joined: Oct 2000
Posts: 512
USA
Don't forget that if it is a real estate secured loan - then you need a new flood determination since you have 'extended' the loan.

Return to Top
#2013177 - 05/10/15 12:27 PM Re: skip a payment bowlngirl
Kathleen O. Blanchard Offline

10K Club
Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,277
_________________________
Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

Return to Top
#2233163 - 03/17/20 08:55 PM Re: skip a payment bowlngirl
Norman Paperman Offline
Diamond Poster
Norman Paperman
Joined: Aug 2012
Posts: 1,636
48.934476, -114.343735
Can I chime in on this? Are we required to pull a new flood determination on a renewal or extension if we have life of loan monitoring on the current determination? Seems redundant if so.
_________________________
Maybe you just wanna fly the plane yourself. Well good luck pressing take off, then auto pilot, then land.


CRCM

Return to Top
#2233164 - 03/17/20 09:01 PM Re: skip a payment bowlngirl
rlcarey Online
10K Club
rlcarey
Joined: Jul 2001
Posts: 77,266
Galveston, TX
The regulatory requirement is that a lender can use an existing FHD if it is less than seven years old and if there has not been a map change. Your FHD will reference the specific Flood Insurance Rate Map (FIRM) used to make the flood hazard zone determination. If that FIRM changes, they you would need an updated FHD form in file.

A lender is free to document this in a number of ways according to your own internal policies. That might include 1) pulling a new FHD, 2) internally reviewing to ensure the map used on the FHD has not been updated by using the FEMA Map Service Center (https://msc.fema.gov/portal/home ) and making a notation on the original FHD regarding the review, or 3) using an update feature provided from your FHD provider.

Any of those would be acceptable.

The fact that you might be notified if a property goes into or out of flood zone however may not mean that a map has not been updated, if the flood zone of the property has not changed with a map update.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#2233201 - 03/18/20 02:38 PM Re: skip a payment bowlngirl
Norman Paperman Offline
Diamond Poster
Norman Paperman
Joined: Aug 2012
Posts: 1,636
48.934476, -114.343735
Thank you Randy. We'll look into a way to re-cert those determinations and provide them to customers.
_________________________
Maybe you just wanna fly the plane yourself. Well good luck pressing take off, then auto pilot, then land.


CRCM

Return to Top
#2233202 - 03/18/20 02:41 PM Re: skip a payment bowlngirl
rlcarey Online
10K Club
rlcarey
Joined: Jul 2001
Posts: 77,266
Galveston, TX
Well, the FHD does not have to be given to a borrower, only the notice required if they are in a SFHA.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top