For the past couple of years my bank has been closing first lien mortgages in our name, we fund the loan, then ship it off to a mtg. co. it never gets booked at my bank. If everything is done correctly the mtg. co. "purchases" the loan, if not, we put it on our books. One of our officers is saying that since we don't sell this loan out of our portfolio, it is not considered a sold loan, we are just originating it for the mtg. co. Due to this on the servicing disclosure where you state how many loans have been sold, assigned or transfered in the past 3 years should be 0%. I don't agree, but I can't find any specifics for proof. Any body care to point me in the right direction? Thanks!!

Are you aware of the short disclosure? See http://www.bankersonline.com/compliance/guru2006/gurus_cmp022706e.html (hope I did that right>)

Yes Suzie, you did that just fine.

Reg X states that if application is face to face, the transfer disclosure must be given at that time. If not face to face, it can be mailed within 3 business days of receipt of an application. The proposed amendments to the reg aren't as specific but still state that the disclosure must be given at time of application or within 3 business days from receipt of an app. If the short disclosure is added to the GFE, would the GFE then have to be given up front if the application is face to face?

I was told by Arta (our software people) that the ammendment was adopted by RESPA but not by HUD, and that we weren't suppose to use them until HUD adopted it too. If we can use it that's great, but what about the ones that are already done, since I've been here we've listed the percentage that we have assigned, but before about 2004, they all show 0%. So which half is wrong?

bump

That is not a true statement - HUD stated in 2002:

In 1990, Congress amended RESPA to
include a disclosure, which informs
borrowers that their loan or the
servicing of their loan, may be sold. 12
U.S.C. 2605, Public Law 93–533 section
6 (November 28, 1990). In 1997, HUD
proposed a rule to implement the
amended statute. Many comments were
received and the rule was never
finalized. 62 FR 25740. The Department
plans to finalize the 1997 proposed rule
shortly. However, in the meantime, the
Section 6 language in the statute may be
provided in conjunction with the GFE
instead of the language currently
indicated in § 3500.21 and Appendix
MS–1.

You close a loan, in your name, using your funds. While you have used investor criteria as a guide, you, not the investor, made the credit decision. In such a case the loan is, without qualification, yours. As such, it should be calculated into the servicing percentages (assuming you do not use the short form).

Thanks guys, that's what I needed, What about with Janec's question on the short form, about when would you then disclose the GFE? I would like to start using the short form, and will be sending an e-mail to Arta, if you wouldn't mind giving me some info on that. Thanks

SavannahOne is right on her statement about your bank making the credit decision. You need to be including any and all loans funded through your bank on the servicing disclosure. We are a national chartered bank. The OCC told us the exact wording that SavannahOne stated in her comment. Once again, this could be interpreted differently by different regulators, but if you are an OCC examined bank, you better be including these loans on your servicing disclosure and in your HMDA data.

You need to be including those numbers if you don't use the short form. Sorry.

We are FDIC regulated, but I also agree with savannahOne, I just couldn't find anywhere on paper that I could show my officer so that she will agree. She is saying that since the mtg. co does the underwritting, that they make the credit decision, however, if we do the loan and they decide later that it is not up to par, we have to shelf that loan, so essentially it's our decision. And she says because the loan is never booked, that we never service it, but since we are closing it in our name, we are making the documents, we are providing the initial services.

I did e-mail Arta about the short form, haven't heard anything, but if I can get this going at least it will be right from here on out, even if she doesn't agree with me.