Timing of Insurance Disclosures
12/06/2004
Should the Federal Sale of Insurance Disclosure be given to customer at the time of application, or once the loan has been approved? What if the loan is declined?
Dan Persfull
Bio:
Dan is Vice President and Compliance Officer for The Peoples State Bank with its main office located in Ellettsville, IN and supporting nine branches in surrounding communities. The bank is a privately owned bank that began its existence in 1904.
Dan entered the financial services arena in 1974 when he went to work for Commercial Credit Corporation. He worked eighteen years with Bank One and three years with the Indiana University Employees Federal Credit Union. In addition to serving as a Compliance Officer, he has served as a Collection Officer, Consumer Loan Officer, Commercial Loan Officer and Loan Operations Officer. His primary duties falls within lending compliance, training and consumer loan reviews.
He attended Three Rivers Junior College in Poplar Bluff, MO and Arkansas State University in Jonesboro, AR. He is also a graduate of the ABA Bank Card School, ABA Commercial Lending School and ABA National Truth-in-Lending Compliance School.
Questions Answered
This Marketing Arrangement Smells Like Trouble
11/29/2004
We are considering a relationship with a non-affiliated real estate broker. Here's how it works: If a homebuyer purchases a home through this broker and then finances the loan with us, the customer will get a $500 reduction in real estate commissions from the broker and a $500 credit from us toward our typical closing costs. We are one of nine banks that are being offered this opportunity brought to us by the broker. No money changes hands between us and the broker. If the buyer does not use one of the nine banks, they don't get the commission reduction, and if they don't buy their home through that broker, we will not give a discount. Do we have a potential violation of Section 8 of RESPA if we participate? The definition of "thing of value" includes the "the opportunity to participate in a money-making program." A referral "includes any oral or written action directed to a person which has the effect of affirmatively influencing the selection by any person of a provider of a settlement service or business incident to or part of a settlement service when such person will pay for such settlement service or business incident thereto or pay a charge attributable in whole or in part to such settlement service or business." It seems that we may meet both of these definitions, but I'm not sure if I'm misinterpreting or just plain missing some important exclusions.
Related Law Firm and Mortgage Company
11/15/2004
I am an attorney in Florida. I own a mortgage company and a law firm that provides title insurance and closing services. The mortgage company refers title work to the law firm. Does this situation fall within the purview of disclosure, and if, so, exactly what charges for services have to be disclosed?
Collecting Government Monitoring Information
11/15/2004
My question is in regards to Regulation B Monitoring Infomation. We are a non HMDA reporting bank. We have received mixed information concerning the collection of the monitoring information on telephone, mail and internet applications. Does the creditor need to complete the monitoring information on telephone, mail or internet applications to purchase or refinance the applicant's personal residence?
Action Date for CRA Small Business Loans
11/15/2004
CRA Question: The action date should be the note date, correct? We are booking commercial loans with the "funding date" as the original date on the system, not the note date. Shouldn't the loan processing department use the "actual" note date as the original date?
If a Condo Association Decides Not to Rebuild ....
11/15/2004
When financing a condo unit suppose the entire building is wiped out by a flood and insurance does not cover mortgage balance. Suppose the association decides not to rebuild but to sell very valuable land. Can the mortgage holder get to customer's portion of land sale proceeds directly as a result of the mortgage?
Retaining Construction Advance Documentation
11/15/2004
In commercial construction loans, once the construction is complete and you have received the Certificate of Occupancy, how long should you retain the construction advance information (photos, memos, advance request forms)?
Do We HUD-1 This HELOC?
11/15/2004
HELOCs subject to Section 226.5 of Regulation Z do not require a GFE or HUD-1. However, if our customer is using a closed end first mortgage and a simultaneously issued HELOC to purchase a home, do we need a separate HUD-1 for the HELOC?
Fee for Force-Placed Flood Coverage
11/15/2004
Are banks allowed to charge a fee (say $25) for doing force-placed flood insurance? The regulation reads "The bank may charge the borrower for the cost of premiums and fees incurred in purchasing the insurance." Does this mean only direct fees? Also, can this fee be recurring, say monthly or quarterly?
Residential Mortgage Tied to Prime Rate
11/15/2004
Have you ever heard that a bank cannot tie a 1st mortgage loan secured by a borrower's residence to Prime?
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