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#2236432 - 05/08/20 09:15 PM 50(a)6 loan, 50(a)4 or neither
City Girl Offline
100 Club
Joined: Sep 2005
Posts: 159
Midwest
We sometimes have issues with the data integrity at application in determining if the new loan will result in a true Texas 50(a)6 loan or a 50(a)4 or neither.

Do you see any risk to the bank with sending this disclosures to the borrower when we are not sure if the loan will be a Texas 50(a)6 loan or a 50(a)4 or neither ? The thought is that we would have provide it so if it does turn into one or the other the borrower has received the disclosure. Thoughts on how to handle this?

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#2236443 - 05/09/20 12:07 PM Re: 50(a)6 loan, 50(a)4 or neither City Girl
rlcarey Online
10K Club
rlcarey
Joined: Jul 2001
Posts: 83,227
Galveston, TX
I would probably not recommend that the 12 day 50(a)(6) notice be delivered on loans where it is not applicable. There is no timing requirement on the 12 day disclosure other than allowing 12 days to pass after delivery to close.

That is a different situation than when a borrower requests a rate/term refinance of an existing 50(a)(6) loan, which requires a different 12 day disclosure that must be delivered within three days of application. However, it the lender later finds out that is the actual request, the lender can have the applicant modify their application to state their intent and you have three business days from that point to deliver the disclosure.
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