Home Equity Disclosures

Posted By: SouthoftheBorder

Home Equity Disclosures - 02/04/02 04:43 PM

On our initial Home Equity Disclosure we list the fees charged by the bank (lender valuation and loan processing fee) plus the range of fees charged by 3rd parties.
Our loan processing system does not add these fees to the final disclosure/note signed at closing. Are the fees required to be disclosed again?
Posted By: rlcarey

Re: Home Equity Disclosures - 02/04/02 10:44 PM

Yes, the disclosure of other fees is required on the initial disclosure for open-end credit. Refer to 226.6(b):

(b) Other charges. The amount of any charge other than a finance charge that may be imposed as part of the plan, or an explanation of how the charge will be determined.

Posted By: SouthoftheBorder

Re: Home Equity Disclosures - 02/05/02 03:38 PM

The initial disclosure lists the fees....it's the final agreement/disclosure that I question. Since we are not required to prepare a HUD 1a, how does the consumer know the actual fees paid to third parties?...JUST WONDERING!
Posted By: redsfan

Re: Home Equity Disclosures - 02/06/02 05:12 AM

In this case, the "initial" disclosure means the one provided before/at consummation. This is how the customer discovers what you actually paid. If you are not providing those at closing, you should be.

The good news is that this disclosure is not a "material disclosure" for purposes of rescission, so your rescissions have not been extended to three by failing to disclose.

The disclosure provided at application is a "program disclosure," required by 225.5b.

If this is confusing to you, welcome to the club!

Posted By: SouthoftheBorder

Re: Home Equity Disclosures - 02/05/02 09:00 PM

thanks! makes perfect (??) sense...the initial disclosure is not the initial disclosure given with application.....
Posted By: J Hunt

Re: Home Equity Disclosures - 03/08/02 07:16 PM

I have a further question - Variable rate, 119 months interest only, 1 balloon payment Home Equity Lines: preliminary disclosures state range of anticipated third party fees and borrowers are told that they are responsible for actual costs at close (bank pays flood, credit report) (borrower pays appraiser directly). Our notes disclose third party fees (such as escrow, title policy, etc); however, we have some very savvy borrowers who negotiate those costs at close with the title company; therefore, our disclosed third party fees are not accurate. As these are not material disclosures, do we have the same tolerance restrictions we would otherwise? Thanks