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#564431 - 06/08/06 04:21 PM
Notice to Home Loan Applicant ?
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Platinum Poster
Joined: Oct 2004
Posts: 822
midwest
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We initially provided the Notice to Home Loan Applicant on a residential real estate construction loan, we are now renewing the loan (there is no new money, the borrower simply needs more time to complete the construction). We do not need to disclose another Notice to Home Loan Applicant to the borrower with this renewal do we? Disclosing the notice initially should meet the FACTA requirement right? Thanks.
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#564432 - 06/08/06 04:49 PM
Re: Notice to Home Loan Applicant ?
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Gold Star
Joined: Jun 2006
Posts: 392
MN
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IMO - I don't think you would have to if you did not pull a new credit report.
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#564433 - 06/08/06 05:18 PM
Re: Notice to Home Loan Applicant ?
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10K Club
Joined: Aug 2002
Posts: 47,530
Bloomington, IN
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You have to provide the disclosure for each loan transaction. If this is a new loan transaction then you would need to provide the notice. Why not simply extend/modify the maturity date for the period needed.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.
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#564434 - 06/16/06 10:04 PM
Re: Notice to Home Loan Applicant ?
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New Poster
Joined: Jun 2006
Posts: 1
Arizona
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I see so we need to disclose on every home loan application even if it is for construction and the take out will come from another lender?
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Christina Moore
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#564435 - 06/16/06 10:16 PM
Re: Notice to Home Loan Applicant ?
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10K Club
Joined: Aug 2002
Posts: 47,530
Bloomington, IN
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Yes. The reg does not exempt construction or other temporary financing.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.
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#564436 - 06/29/06 09:58 PM
Re: Notice to Home Loan Applicant ?
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100 Club
Joined: May 2005
Posts: 220
Where the wind blows swiftly d...
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I have to respectfully disagree w/Dan. No new money, no new credit report, the disclosure is not required.
If this was new monies and using the same credit report, then yes, I do agree that the disclosure is again required even though it is the same credit score/report used.
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#564437 - 06/30/06 01:37 AM
Re: Notice to Home Loan Applicant ?
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10K Club
Joined: Aug 2002
Posts: 47,530
Bloomington, IN
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A no-cash out refinance is a new loan transaction initiated by a consumer for a consumer purpose, therefore the notice is required even if a previous obtained score is used. Part of the disclosure is when the score was obtained.
If the existing loan is modified then there is no new loan transaction and the notice would not be required.
However, no new money being advanced or no new credit report being pulled in the new transaction does not exempt the disclosure from being given.
(g) Disclosure of credit scores by certain mortgage lenders
(1) In general
Any person who makes or arranges loans and who uses a consumer credit score, as defined in subsection (f) of this section, in connection with an application initiated or sought by a consumer for a closed end loan or the establishment of an open end loan for a consumer purpose that is secured by 1 to 4 units of residential real property (hereafter in this subsection referred to as the "lender") shall provide the following to the consumer as soon as reasonably practicable:
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.
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#564438 - 06/30/06 04:13 PM
Re: Notice to Home Loan Applicant ?
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Diamond Poster
Joined: Sep 2005
Posts: 1,163
Georgia
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I think we are missing something. Would the Notice apply if comply girl has the loan officer state in his credit memo the old Credit Scorewas not considered?
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#564439 - 06/30/06 04:50 PM
Re: Notice to Home Loan Applicant ?
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10K Club
Joined: Aug 2002
Posts: 47,530
Bloomington, IN
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Not IMO, if the score is present how can you prove you didn't use the score in some form.
The key here, as I said in my original response, if this is a new loan transaction (refinancing) then the disclosure is required.
If it is a continuation of the existing transaction (obligation), it is not.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.
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#564441 - 07/23/06 12:35 PM
Re: Notice to Home Loan Applicant ?
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10K Club
Joined: Aug 2002
Posts: 47,530
Bloomington, IN
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Actually David, I'm not sure if we are disagreeing.
My original reply stated if this is a new loan transaction they would have to provide the notice.
If they are renewing, modifying or extending the existing transaction then I would agree because the notice is only required once for the same transaction, however, if they are refinancing where the existing transaction is being satisfied and replaced by a new transaction then I will have to stay with my opinion that a new NHLA disclosure is required.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.
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#564443 - 08/10/06 08:13 PM
Re: Notice to Home Loan Applicant ?
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10K Club
Joined: Aug 2002
Posts: 47,530
Bloomington, IN
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Yes if the rental dwelling is a 1-4 residential real property. The notice is required when a consumer initiates a credit request for a consumer purpose that is to be secured by a 1-4 residential real property. The 1-4 residential real property does not have to be the primary residence.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.
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