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#971361 - 06/09/08 12:40 AM Joint Intent Ci-maker at time of application
goingtoexperts Offline
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If, at the time of application, an applicant applies with a co-maker (i.e. daughter applies for an auto with father as co-maker; father's name is not on the car title), must joint intent be obtained? Is this considered "joint credit"? TY!

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#971374 - 06/09/08 10:21 AM Re: Joint Intent Co-maker at time of application goingtoexperts
goingtoexperts Offline
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Sorry for the typo...meant co-maker in the subject line.
Last edited by goingtoexperts; 06/09/08 10:50 AM.
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#971376 - 06/09/08 10:51 AM Re: Joint Intent Co-maker at time of application goingtoexperts
rlcarey Online
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How the property is titled has no bearing on how or who applied for the loan. Yes, they would be considered joint applicants unless the father specifically asked to act only as a guarantor on the loan.
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#971452 - 06/09/08 02:18 PM Re: Joint Intent Co-maker at time of application rlcarey
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You may want to look at Reg. AA-227.12(b)(1)(2)(3) in deciding whether the father is a co-applicant or cosigner.
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#971476 - 06/09/08 02:41 PM Re: Joint Intent Co-maker at time of application CRC
Dan Persfull Offline
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CRC, for the purposes of Reg. B's joint intent they would be joint applicants because they applied contemporaneously.
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#971599 - 06/09/08 04:43 PM Re: Joint Intent Co-maker at time of application Dan Persfull
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Dan, I have to disagree. The intent of the change to Reg. B with respect to joint applications was to protect certain classes of applicants from the presumption that they were applying for joint credit; for example, a married woman submitting a joint financial statement to support an application. The mere fact that she submitted the joint f/s is not sufficient evidence that she is applying for joint credit; hence the need for the separate affirmative statement. The Federal Register – 2003, page 13150 – talks about this in more detail.

With the above in mind, I believe “contemporaneously” means, in the context of 7(d)(2) in the OSI, “beginning at the same time or during the same period of time” and not the exact instant. Intent; and not whether individuals visit the bank together or at different times is the determining factor.

The commentary states at 7(d)(3), “A person's intent to be a joint applicant must be evidenced at the time of application.” In the father-son example, depending on the situation, they could be joint-applicants or an applicant and cosigner (or guarantor). In the following 2 scenarios; I’m a co-applicant (a/k/a joint applicant) in the first and a cosigner in the second:

1-My son (who’s now out of college and working full-time) and I apply for joint credit to purchase a classic car. He applies on Monday, I visit the bank on Tuesday; in this case we are co-applicants. It’s clear we intend to purchase the car together; and, on Monday he signed the joint application statement.

2-My son (who is in college, working part-time) applies for a car loan. Knowing he’s a full-time college student with limited income – I visit the bank with him and tell the loan officer I’m willing to sign the loan if need be. On the basis of the bank’s lending policy my son doesn’t’ qualify, so the loan officer takes me up on my offer; in this case I’m a cosigner or guarantor (depending on the bank’s procedure). Whether or not the bank provides the co-signer notice depends on whether or not my name will be on the title to the car (and perhaps, state law).
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#971620 - 06/09/08 05:02 PM Re: Joint Intent Co-maker at time of application CRC
Dan Persfull Offline
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From Reg. B 202.2

(e) Applicant means any person who requests or who has received an extension of credit from a creditor, and includes any person who is or may become contractually liable regarding an extension of credit. For purposes of § 202.7(d), the term includes guarantors, sureties, endorsers, and similar parties.


#1

If the loan officer is doing his job correctly they established with your son on Monday that he would be applying for joint credit with you but you would not be able to complete your portion of the application until Tuesday. In this case there was an intent of joint credit established at the time of application.


#2

You didn't apply with your son in the this scenario. You told the LO you would co-sign if your son did not qualify. Your son did not qualify therefore the LO countered the application with you applying as co-signer as you offered to do. You applying as a co-signer was an underwriting requirement, therefore there was no joint intent at the time of your son's application.
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#972006 - 06/09/08 10:30 PM Re: Joint Intent Co-maker at time of application Dan Persfull
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Two things: 1) We don't know the definition of "co-maker" used in the original question (is it a cosigner or joint applicant?); and 2) You can't look at Reg. B alone; Reg. AA has to be taken into consideration; Reg. AA states:
(b)(1) Cosigner means a natural person who assumes liability for the obligation of a consumer without receiving goods, services, or money in return for the obligation…
(2) Cosigner includes any person whose signature is requested as a condition to granting credit to a consumer…The term does not include a spouse whose signature is required on a credit obligation to perfect a security interest pursuant to state law.
(3) A person who meets the definition in this paragraph is a cosigner, whether or not the person is designated as such on the credit obligation.

I think we’re on the same page – it’s the intent of the applicant(s). The issue I’m having is, in my scenario 2, regardless of what I call myself, I’m a cosigner, not a joint applicant. For example, if the conversation starts, “We’re here for a loan to buy a car for my son…” It may appear we’re applying for joint credit; however, if as the application process progresses it becomes apparent I will receive no tangible benefit from the transaction; I’m a cosigner and must be given the notice under Reg. AA.
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#972018 - 06/09/08 11:49 PM Re: Joint Intent Co-maker at time of application CRC
rlcarey Online
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You have to look at Reg AA and Reg B separately. They are two totally separate regulations and implement two totally different laws.

Whether they apply jointly under Regulation B is determinied solely by intent, while Regulation AA could deem one of them a co-signer due to the tangible benefit aspect and require a notice to co-signer even with a joint application.

The worse thing anyone can do with these regulations is start mixing definitions between two of them.
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#972020 - 06/10/08 12:17 AM Re: Joint Intent Co-maker at time of application rlcarey
goingtoexperts Offline
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Thanks to all. "Co-maker" in the original scenario was a co-signer/guarantor. To me, the Reg AA/Co-signer notice is separate and distinct from Reg B's joint intent and was not something I was considering when I posed the question. I was trying to confirm that a co-sginer originally applying with an applicant (not a co-signer that has been added as a condition for the loan) falls under the requirements of joint intent. My initial thought was yes and that seems to be accurate. Thanks again!

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