Most Popular Lending Content
Discussing Credit Report Information
10/04/2004
How much information can a bank representative discuss with a loan applicant regarding their credit report without any lending regulations? I've heard everything from "nothing" to all but providing a copy to the applicant.
Late Fee Begets Late Fee
10/04/2004
If a customer makes a payment from his scheduled payment book, but it arrives late, the bank charges a late fee. The bank now deducts a late fee from the next scheduled payment, and this continues to roll every time the customer is late, which forces the account to go delinquent each month. This customer went through a bankruptcy 4 years earlier, so the bank has not communicated with them in the form of an annual statement of account, annual terms and agreements, or privacy notice, even though the customer did not include this loan in the bankruptcy and never missed a payment. Now their account is reporting 7-8 months of 30 days late. Has a violation occurred?
Short Year Escrow Statements and Overages
10/04/2004
When we have an overage in an escrow account for a loan that has been paid off, where do the funds go and when do they have to be disbursed? What regulations address this?
ARM Rate Disclosure Rules
10/04/2004
We have a product type is a 5/1 Arm based on a 30 year payout. The note rate is 4.875% with a margin of 2.875% and index of 1.210. The payments on $93,000 are being calculated at $492.17 for payments 1 - 60. The second stream of payments after the fixed period are being calculated starting with the 61st payment of $455.88, resulting in an APR is 4.399% (which is lower than the note rate). But the second stream of payments are calculated at todays index plus the margin and rounding to the nearest eight (4.125%). Our Auditing Dept. was questioning whether the second stream of payments of the TIL should be at the highest rate? The cap is 9.75%.
Reg. AA and Pyramiding Late Fees
10/04/2004
My read of Reg. AA is that taking a full regular payment and applying it to accrued but unpaid late charges, instead of to the current regular payment, is in violation of the regulation. This practice then causes the customer to become unfairly delinquent again. Is this correct?