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#1732723 - 08/20/12 03:26 PM Cosigner Notice
country girl Offline
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Joined: Jul 2004
Posts: 102
Mother and daughter apply jointly for a loan that is used to consolidate the daughter’s debt and to make improvements on the daughter’s home. The loan is secured by the daughter’s home. Mother does not live in the home. If the loan proceeds check is made payable to both mother and daughter, is the mother required to receive a cosigner notice?

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Lending Compliance
#1732737 - 08/20/12 03:35 PM Re: Cosigner Notice country girl
swiggles Offline
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swiggles
Joined: Aug 2001
Posts: 7,350
Yes. The mother is not materially benefitting from the loan. See the definition of "cosigner" in Reg A. 227.12(b)(1),(2)&(3). An examiner "caught us" on a couple of these during an exam....didn't have any trouble locating the loans in which the "co-borrower" met the definition of "co-signer" under Reg AA.
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The more you sweat in training, the less you bleed in battle.......

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#1732757 - 08/20/12 03:53 PM Re: Cosigner Notice swiggles
country girl Offline
100 Club
Joined: Jul 2004
Posts: 102
Thanks. I read the definition and I agree with your reply; however, I was getting some push back. I appreciate the confirmation that I am on the right track!

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#1732760 - 08/20/12 03:56 PM Re: Cosigner Notice country girl
swiggles Offline
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swiggles
Joined: Aug 2001
Posts: 7,350
You're welcome. It's a hard concept to get across to lenders sometimes. But the citation says it all. Just show that to whoever is pushing back!!!!
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The more you sweat in training, the less you bleed in battle.......

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