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#954983 - 05/06/08 04:04 PM REG B Intent to Apply Commercial Loans
donna.raisor Offline
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Doesn't this have to be indicated how the parties are applying and where can I find in the regulation?

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#955033 - 05/06/08 04:51 PM Re: REG B Intent to Apply Commercial Loans donna.raisor
Kathleen O. Blanchard Offline

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I am not sure what your question is. Can you clarify?
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#955043 - 05/06/08 04:57 PM Re: REG B Intent to Apply Commercial Loans donna.raisor
CalifDreamin Offline
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Far from Calif
I think you are looking for the joint intent rules. If you are, go to 202.7(d) in Reg. B and the Commentary .
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#955066 - 05/06/08 05:28 PM Re: REG B Intent to Apply Commercial Loans CalifDreamin
donna.raisor Offline
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I am sorry what I am trying to clarify is in regards to REG B - Business Credit and joint applicants is it a requirement to have them sign an Intent to Apply for Joint Credit form?

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#955087 - 05/06/08 05:57 PM Re: REG B Intent to Apply Commercial Loans donna.raisor
Kathleen O. Blanchard Offline

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If the borrowers are individuals, yes. This is especially important for business credit if a spouse is involved due to the prohibitions on spousal signatures.

FlamingoGal gave you the links above.
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Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

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#955100 - 05/06/08 06:15 PM Re: REG B Intent to Apply Commercial Loans Kathleen O. Blanchard
hij Offline
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Joined: Jun 2003
Posts: 168
Midwest
There is nothing in the regulation the refers to or requires an "Intent to Apply for Joint Credit Form". You need a process to document how the application is originally being submitted...i.e. individual or joint with more than one party. This could be done through the use of a written application or if no application is used, your lenders should ask who is applying and document that in the file.

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#955114 - 05/06/08 06:36 PM Re: REG B Intent to Apply Commercial Loans hij
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
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The regulation looks for at least initials next to something that says this is a joint application. From the commentary:

"3. Evidence of joint application. A person’s intent to be a joint applicant must be evidenced at the time of application. Signatures on a promissory note may not be used to show intent to apply for joint credit. On the other hand, signatures or initials on a credit application affirming applicants’ intent to apply for joint credit may be used to establish intent to apply for joint credit. (See Appendix B). The method used to establish intent must be distinct from the means used by individuals to affirm the accuracy of information. For example, signatures on a joint financial statement affirming the veracity of information are not sufficient to establish intent to apply for joint credit."

The lenders say so is not enough.
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Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

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#957300 - 05/10/08 03:48 AM Re: REG B Intent to Apply Commercial Loans Kathleen O. Blanchard
David Dickinson Offline
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David Dickinson
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Central City, NE
Applicants are not required to sign or initial anything. The Commentary states they "may be used". How would you handle a phone application if the applicant's had to sign something?

A loan officer can document what was stated by whom. It is a best practice to have the applicants sign/initial if they are present, but there are other ways to document the intent of the applicants.

This is exactly what we will be discussing in the Joint Intent webinar I'll be conducting on June 18th:
http://calendar.bollearningconnect.com/main.php?view=event&eventid=1210342468521
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#957315 - 05/10/08 03:13 PM Re: REG B Intent to Apply Commercial Loans David Dickinson
Kathleen O. Blanchard Offline

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What I see banks do for telephone applications is to ask at the time of application and have the applicants initial a statement confirming the status at closing. I see this in consumer and commercial loans.

For consumer loans, it is absolutely insisted upon for mortgages, apparently as a secondary market mortgage requirement. For commercial deals, banks I see obtain something from the borrower so that lenders are not just on their own saying it is joint so that they can require the spouse on the loan.
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Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

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#957978 - 05/12/08 10:17 PM Re: REG B Intent to Apply Commercial Loans Kathleen O. Blanchard
David Dickinson Offline
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David Dickinson
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Central City, NE
I see this a lot to Kathy, but I want to clarify that "at closing" is not what Reg B requires. The preamble (section by section analysis) to these requirements indicated this had to be done at the time of the initial application. The FRB felt there was too much duress at closing to ask this then. It is true that most people will sign just about anything at closing. The logical time to ask people "who is applying" is at the time of application.

That said, if a LO gets the documentation at closing, I believe this is not sufficient. They must get it when taking the telephone application. If they want to follow up with a "are you sure" at closing, that is fine, but it must be in addition to the earlier documentation.
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