HELOC's

Posted By: mzachau, CRCM

HELOC's - 03/13/09 08:31 PM

If we provide a HUD-1A on HELOC's (per customer request) would we still be required to provide Taxes and Insurance as POC?
Posted By: Many Hats

Re: HELOC's - 03/16/09 03:33 PM

We always provide a HUD-1A when we close 2nd lien HELOCs...and we always put the taxes and HOI as POC. We typically put it in the "Additional Settlement Charges" section (1300's).

It is required to comply with Reg X (RESPA), as these are considered charges in connection with the settlement.

Here are the complete instructions:
http://www.bankersonline.com/regs/3500/a3500.html
Posted By: Dan Persfull

Re: HELOC's - 03/16/09 04:35 PM

You are not required to use a HUD 1-A for HELOCs. Therefore, why use them and take the chance of not completing them correctly and opening yourself up to legal issues if for some reason you end up in court?

The customer has a right to request the itemization of the lender and/or third party charges and fees to open the account. That can be done on a plain sheet of paper.
Posted By: Many Hats

Re: HELOC's - 03/17/09 03:43 PM

Hmmm, I was told that we were told that we were required to utilize the HUD1-A to comply with Reg X (whether it was an examiner or a consultant, I am not sure, but will look into it).

We have done it for at least the 4 1/2 yrs since I have been here and it seems odd to me that neither our examiners or consultants expressed a concern about the fact that we were doing it. It was probably stated that it was our bank policy to do it that way across the board. If so, then they would have probably nailed us on it if we forgot to do it on one.

Meanwhile, I see what you are saying Dan, if it's not required, don't mess with it. If a borrower requests it, in what fashion do you provide the information?
Posted By: Dan Persfull

Re: HELOC's - 03/17/09 03:58 PM

You were given misinformation.

GFE - 3500.7(f)

HUD 1 / 1A - 3500.8(a)

To the best of my knowledge we have never had anyone request an itemization. If we did we would just list the appropriate payees and charges in a tabular format with a simple statement that the following were the itemization of charges requested.
Posted By: Many Hats

Re: HELOC's - 03/17/09 04:56 PM

I am so glad this came up then...thanks Dan!