Most Popular Lending Content
Change to Loan One Day Before Initial Closing
12/01/2019
If you have changes to a loan product or loan amount, etc. one day prior to the initial closing disclosure being issued, can you use the initial CD to disclose the changes or do you have to reissue the loan estimate and restart the clock, or is there another solution?
Affiliate or affiliated business arrangement?
12/01/2019
My compliance officer says we have an affiliated business arrangement with a title insurance company that is 20% owned by our holding company. I thought the rules kicked in with 25% ownership. Who’s right?
Bank Required to Pay Interest on Escrowed Funds?
11/24/2019
Are there any regulatory requirements that a bank must pay interest on escrowed funds? This would be borrowers funds held for construction not tax and insurances.
Section 8: Every mortgage lender’s concern
11/24/2019
We are not examined by the CFPB. Should we be worried about Section 8 violations?
Bank Responsibility for Flood Insurance Coverage
11/24/2019
Our secondary mortgage department underwrote a loan for a property and ordered a flood determination/SFHD on the property from our vendor. The SFHD issued noted that the property was located in flood zone X. Based on this, the loan closed without flood coverage in place. Subsequent to closing it was determined that the loan would need to be retained in-house. The bank's credit department ordered another SFHD from a different vendor. This SFHD came back noting that the property was located in zone AE, requiring flood insurance coverage. When contacted the first vendor they reissued a SFHD and updated the flood zone to AE. Obviously, the property must now be insured and any recourse against the first vendor would depend on the terms of the contract with the vendor. The question from management is whether the bank can (with proper notice) now require the borrower to obtain flood insurance or will the bank have the responsibility to provide coverage? I believe that the responsibility lies with the borrower - it would be no different in the particular set of circumstances than if there was a map change placing the property in zone AE where it was previously in zone X. Whether management elects to provide none, all or part of the cost is a business decision. I would agree that the Bank (or original vendor) should pay for the insurance (force place) for the gap period.
