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?
We have a borrower that is using their primary residence (that does not have an existing lien) to purchase a second home. If I am understanding Reg C correctly, I would be reporting the loan as a purchase because that is what the funds are being used for. Would I then report it as a primary residence because the property that will have the lien is their primary residence or would it be a second home because that is what the funds are being used for?
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.
Can we report adverse credit to the credit bureau on a commercial loan and the guarantor if we don't normally report our commercial loans to the credit bureau?
I have a question regarding modification fees on our construction-perm loans. If additional fees are incurred at modification (Appraisal fee, recording fees, title fees, etc.) and were not disclosed on the loan estimate or closing disclosure, are we able to collect and charge them or would this be a TRID tolerance issue?