Is it illegal to charge a loan documentation preparation fee?
03/04/2002
Is it now illegal for us to charge a loan documentation preparation fee?
Lucy is Editor of Compliance Action and President of Compliance Resources, Inc., a company offering compliance support and services to banks. She is also a Senior Associate of Paragon Compliance Group, a company dedicated to providing compliance training. She has more than twenty-five years of experience working with regulatory agencies and financial institutions. Her extensive work experience with regulatory agencies includes the Federal Home Loan Bank Board, the Board of Governors of the Federal Reserve System, and the Federal Trade Commission. As the manager of the Compliance Division of the American Bankers Association, she worked directly with several of the association's banker committees and with regulatory agencies to identify compliance priorities, and to produce resources and programs.
You can reach Lucy via email at: griffin@bankersonline.com
03/04/2002
Is it now illegal for us to charge a loan documentation preparation fee?
03/04/2002
Borrower is a corporation with one shareholder. All business assets are pledged as collateral. Lender wants the spouse to also sign on loan docs, with the concern being that she may gain ownership of at least 1/2 assets should they divorce. Would asking her to sign be a violation of Reg B? If so, does the lender have a bona fide concern regarding assets or does the fact that the borrower is a coporation make this a non-issue? Flip side: What about if the borrower was a partnership or sole proprietorship and the spouse has no role in the affairs or function of the business? (e.g., farmer Bob who takes a loan secured by crops.) Lender wants to add wife to loan as a condition for the same reasons listed above. How should I advise my lender?
03/04/2002
Is it okay to file a mortgage before the loan is funded or before the rescission period ends?
03/04/2002
Does a wire transfer from a customer's account at our bank to the customer's account at another bank count as one of the 6 transfers? And if the customer is another financial institution, does this have any bearing on the transaction?
03/04/2002
I'm in a debate with one of our commercial lenders regarding spousal guarantees on commercial loans. I interpret the ECOA to mean that we cannot condition credit on whether or not a wife guarantees a commercial loan. This officer says the law only applies to consumer transactions and that we can require wives to sign a guarantee on a commercial loan.
03/04/2002
If the State Patrol issues a subpoena for information about a customer, do we also need a certificate of compliance? Also, do we need to have in writing the exact information they want, such as dates? Another question, when we file a SAR, do we have to include an amount if we aren't sure what the figure is?
03/04/2002
If you extend credit on a variablerate Demand Note for a consumer purpose and secure it with the borrower's primary residence, would it be considered an ARM loan under <a href="http://www.bankersonline.com/regs/226/22619.html">226.19(b)</a> and <a href="http://www.bankersonline.com/regs/226/22620.html">226.20(c)</a>? Since <a href="http://www.bankersonline.com/regs/226/22617.html">226.17(c)(5)</a> states that disclosures for a demand loan shall be based on an assumed maturity of 1 year, does that exempt this type of loan from the requirements of <a href="http://www.bankersonline.com/regs/226/22619.html">226.19(b)</a> and <a href="http://www.bankersonline.com/regs/226/22620.html">226.20(c)</a>?
02/11/2002
On a 2nd mortgage loan does the lender have to disclose taxes and insurance estimates on the GFE and HUD-1A? (There is no escrow.)
02/11/2002
Our bank charges a non-refundable $350 mortgage application fee to all customers. If the loan is made, the settlement sheet reflects amounts paid outside of closing from this fee for the appraisal, flood report, and credit report. Recently, in a refinance situation, the borrower exercised his right of rescission and requested the return of his application fee. <a href="http://www.bankersonline.com/regs/226/226-15.html">226.15</a> and its <a href="http://www.bankersonline.com/regs/226/regzcomm.txt">commentary</a> indicates to me that we must return the whole fee. Is this correct? If so, are we ok in retaining the fee in a purchase application where the request is declined?
02/11/2002
Mortgage BankingAdverse Action Prequalification (inquiry) process (no written application) The lender obtains credit information from the consumer, as well as pulls a credit report. If, based on credit information, the consumer can not be offered credit at this time (for example, because of a bankruptcy) and is counseled that once the bankruptcy is cleared up they are encouraged (never discouraged) to return and the mortgage divison would reevaluate, would this constitute a denial and require adverse action?