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#325285 - 03/03/05 03:30 PM he said she said
beegee Offline
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Joined: Feb 2004
Posts: 1,092
South
We have a home equity loan in the name of the husband only. The wife is not on the note but did sign the mortgage. Not sure what is going on between the husband and wife, but the wife is calling in wanting information on the note.

Can we provide that to her given that she is not on the note without violating privacy regulations?

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Lending Compliance
#325286 - 03/03/05 03:35 PM Re: he said she said
Anonymous
Unregistered

She is not a customer, so you can't provide her with information without the husband's permission.

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#325287 - 03/03/05 06:57 PM Re: he said she said
Truffle Royale Offline

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What kind of information is she requesting? Are you in a marital property state? If so, wouldn't she have had to have been provided with some of the documentation when she signed the mortgage?

If she wants to know if the payments are being made and she's either on title or it's marital property, doesn't she have a right to know?

I've never had to deal with this but I'd love to know the answers just in case.

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#325288 - 03/03/05 07:06 PM Re: he said she said
TB 12 Offline
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Foxboro
If the spouse was not an applicant, she must have the husbands permission to discuss the loan information with the lender.
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#325289 - 03/03/05 08:22 PM Re: he said she said
rainman Offline
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I disagree; Reg. P section 216.15(a)(2)(iv) says you can share information with someone "holding a legal or beneficial interest relating to the consumer." Joint ownership of the collateral is good enough.

If you were foreclosing, you'd have to give notice of the foreclosure (presumably with balance and default info) to the spouse under state law; no reason you can't give the same info now.
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#325290 - 03/03/05 08:33 PM Re: he said she said
Jay-Risk Offline
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Joined: May 2004
Posts: 274
New England
Quote:


We have a home equity loan in the name of the husband only. The wife is not on the note but did sign the mortgage.




During the National Home Equity Mortgage Association's (NHEMA) annual fraud conference, one of the top-ten external mortgage fraud schemes discussed involved one spouse fraudulently attempting to draw the equity out of the home without the other spouse knowing. In those instances where a spouse does this, it is usually done as a precursor to a divorce filing.

While I understand and appreciate your concern to promote the dictums of customer information security and privacy, I'm wondering how your institution could have extended a home equity mortgage loan to one spouse, when both spouses are on the first mortgage and presumably both are named on the deed. This woman may be justifiably suspicious about something, but I can tell you there's definately something wrong about a home-equity mortgage loan having been extended to only one spouse in which the collateral is in the name of both spouses. Have you really looked at this whole thing carefully? Are you convinced the husband didn't bring a girlfriend to a loan closing to pose as the wife, or somehow forge the wife's name on closing documents? Instead of looking at this as merely a customer information security/privacy issue, I think you need to get the loan file and look at the details of the loan. There's something more going on here, and you may wish to involve your manager and possibly counsel.

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#325291 - 03/03/05 08:46 PM Re: he said she said
complylady Offline
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complylady
Joined: Jul 2002
Posts: 614
Michigan
I do not see anything suspicious about a HE or a mortgage loan in the name of only one person. All owners are required to sign the mortgage, but only the obligors sign the note. Even TIL addresses situations such as these, as the ROR and TIL disclosures are required to be provided to all persons with an ownership interest (principal dwelling), they do not have to sign the note. Reg B says that non applicants can be required to sign documents to give a security interest, but not required to sign the note.

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#325292 - 03/03/05 11:08 PM Re: he said she said
Jay-Risk Offline
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Joined: May 2004
Posts: 274
New England
Quote:


I do not see anything suspicious about a HE or a mortgage loan in the name of only one person. All owners are required to sign the mortgage, but only the obligors sign the note.




We agree. But the wife in this case would at the very least have to approve the lien on the house, would receive Truth-in-Lending disclosures, would have a right to rescission; and could, in fact, not permit the home equity loan to be granted in the first place. My point was that the loan can not legally be made without any knowledge or approval of the wife. If she is asking questions about the transaction as though she has no knowledge of it, then that might raise a small red flag. If, on the other hand, she is merely asking a routine question, then I don't see the privacy issue because she would have been part of the transaction by having to approve the loan's being in the husband's name only -- i.e., because she is an obligor on the first mortgage along with the husband.

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#325293 - 03/03/05 11:33 PM Re: he said she said
SMQ, CRCM Offline
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Between the lines
Don't let the fact that this is between husband and wife cloud your judgement. Ask yourself how you would respond if it were 2 siblings or business partners that were not related by blood or marriage. Are there some aspects of the transaction that you feel they are entitled to and others that they are not?

We had a similar situation with a customer who had pledged a CD against someone else's loan. He wanted copies of the payment history and all the collateral. Counsel advised on giving him a copy of the note and the history (theory--vested interest) but not all the collateral.
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#325294 - 03/04/05 04:01 PM Re: he said she said
complylady Offline
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complylady
Joined: Jul 2002
Posts: 614
Michigan
I would not give the non-obligor (spouse or otherwise) any information on the loan. By signing the documents allowing the collateral to be used as security they are aware the bank has an interest. If they want loan information, the signer must give permission, otherwise they are not on the account and are not entitled to information.

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#325295 - 09/02/05 07:35 PM Re: he said she said
Anonymous
Unregistered

Please point me to the section in Reg Z that states the "wife" in this case must be given a copy of the Truth-in Lending disclosure. I've been looking for this reference and can not find it. Thanks for your help!!

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#325296 - 09/02/05 07:56 PM Re: he said she said
Cowboys Fan Offline
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Joined: Dec 2002
Posts: 4,598
SC
If closed end, go to 226.23(a)(3):
"The consumer may exercise the right to rescind until midnight of the third business day following consummation, delivery of the notice required by paragraph (b) of this section, or delivery of all material disclosures,48 whichever occurs last. If the required notice or material disclosures are not delivered, the right to rescind shall expire 3 years after consummation, upon transfer of all of the consumer's interest in the property, or upon sale of the property, whichever occurs first. In the case of certain administrative proceedings, the rescission period shall be extended in accordance with section 125(f) of the Act.

48 The term ``material disclosures'' means the required disclosures of the annual percentage rate, the finance charge, the amount financed, the total payments, the payment schedule, and the disclosures and limitations referred to in Sec. 226.32 (c) and (d)."
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#325297 - 09/02/05 08:38 PM Re: he said she said
Dan Persfull Online
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Dan Persfull
Joined: Aug 2002
Posts: 46,762
Bloomington, IN
From the Commentary to 226.23:

23(b) Notice of right to rescind.

1. Who receives notice. Each consumer entitled to rescind must be given:

Two copies of the rescission notice.

The material disclosures.


In a transaction involving joint owners, both of whom are entitled to rescind, both must receive the notice of the right to rescind and disclosures. For example, if both spouses are entitled to rescind a transaction, each must receive 2 copies of the rescission notice and one copy of the disclosures. If E-mail is used, the creditor complies with 226.23(b)(1) if one notice is sent to each coowner. Each coowner must consent to receive electronic disclosures and each must designate an electronic address for receiving the disclosure.
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#325298 - 09/03/05 04:53 PM Re: he said she said
Anonymous
Unregistered

Any owner of collateral has the right to try and keep their property from being repoed or forclosed on. She has the right to know. Default letters are to go to owners as well as signers.

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