Most Popular Lending Content
Paying Past Due Taxes and Accruing Interest
08/29/2005
We have a mortgage loan that is delinquent. The property has back taxes owing in a large amount. Management wants to pay the back taxes and add the amount to the principal balance, which will accrue interest. Is this permissible?
Special Information Booklet Not Provided, Penalty?
08/29/2005
Is there a penalty for not providing a customer with the special information booklet at time of application (or within 3 business days) or a good faith estimate?
Voluntary Escrow Requirements
08/29/2005
We service loans and some non-escrow account borrowers want us to establish an escrow account to pay their taxes and insurance on their behalf. We informed them that they need to send us a letter with their signature requesting this. We alerted them to the fact they may possibly need to make a lump sum deposit into the escrow account. But would send an escrow analysis to determine what the amount would be in advance. Is any of this correct? Could you advise what else is required so that the escrow account can be established? And since this is voluntary and is not required in any of the loan documents, if RESPA became a hassle could we just stop with a 30 day notice to the borrowers?
Paying RESPA Referral Fees
08/29/2005
Is it a RESPA violation to pay somebody who is not employed by the broker for doing a loan or gathering information for the broker to do the loan?
Variable Rate Violations
08/29/2005
We have an overdraft product linked to a checking account. The bank switched to a new computer system for the product and the rates charged were wrong. The bank gave the customers an initial disclosure that told them the rate was variable and 11.5% plus prime. In actuality, the rate the bank wanted to give was prime plus 10%. In this case the customer uses the OD line and the bank sends the customer their first statement charging them a rate of Prime + 10%. The next month the rate changes in the system (system error) and the customer is charged Prime + 12%. The problem was systemic and occurred to all overdraft product customers after the conversion to the new system. Is there a violation and what should we do?