Most Popular Lending Content
Adding MBI And GAP To An Existing Loan
04/07/2003
Our customer wants to add MBI and GAP to his existing loan. What would it take to subsequently add mechanical breakdown insurance or GAP insurance to a closed-end indirect loan that was purchased from a dealer? After the costs of this insurance is added to his loan balance, is it possible to reamortize his loan so his payment remains the same and his maturity date is extended?
SSCRA: Definition Of Active Duty
04/07/2003
We have received our first request under the Soldiers and Sailors Civil Relief Act. In this instance the customer's orders are sending him to Korea. How do we determine what is considered being called to active duty? Does this request fall into the active duty category?
Is it acceptable to use community property income to qualify an applicant if the applicant is applying for separate credit?
04/07/2003
Is it acceptable to use community property income to qualify an applicant if the applicant is applying for separate credit? Our applicant (Mrs. X) works for her husband's business and is requesting a $100M unsecured line of credit for herself and a small business she operates. Her husband, who earns the majority of income of the household, is not a co-borrower or co-signer. Based on Mrs. X salary' alone she would not qualify for this loan under our underwriting requirements. But, if we use the combined income of Mr. and Mrs. X and use their combined annual expenses (included the proposed loan), she would qualify. The argument is community property income can be used to qualify an applicant because she lives in a community property state (California).
Requiring All Owners Of Jointly Held Accounts Used As Collateral To Sign The Security Agreement
04/07/2003
We have a debate going on in our bank and would like some advice on the best course of action. Some are advocating that whenever a CD or savings account is pledged as collateral that is joint with right of survivorship, all owners of the deposit account must execute the assignment/pledge. Others are saying this is not feasible. The UCC for joint accounts seems to indicate that any party on a joint account can pledge it as security on a loan and other parties do not have recourse against the creditor IF the proper assignment or pledge has been used as the security instrument. The language is, however, ambiguous. There are definitely benefits to obtaining all account owners' signatures but it presents difficulty in obtaining them also.
Is there a regulation that requires a loan to be priced 2% above a CD rate (if using the CD as collateral)?
04/07/2003
What is the regulation that discusses the requirement that a loan must be priced 2% above a CD rate if using the CD as collateral? I assume this is a Federal regulation, correct? Can we make the loan rate 2% BELOW the CD or deposit account rate?