Most Popular Lending Content
"Self-reporting" Utility Accts. on Credit History
07/14/2019
Credit Bureaus are now allowing consumers to "self-report" utility accounts on their credit histories. These accounts show as payments and performance does affect their credit scores. For ATR compliance, should these reported accounts now be considered in DTI calculations or can they be excluded? As a side note, I am seeing automated software pulling these utility accounts into the calculations as any other credit account.
E-SIGN Applicability to Compliance & Law
07/14/2019
I am doing some research around E-SIGN and its applicability to both compliance and the law. While I know we have members in different states, and each state is different and any case law or state law, mentioned may not be binding in our "home" state, I would still be interested in how other jurisdictions are handling this. What is your take on courts requesting original signature cards? We have an in-house collections department, that will go to court to file judgement on charged-off checking accounts or past due loans. In our local courthouse a certain judge has often asked our collections manager for the original signature card, when she is trying to obtain judgement. At our bank, customer signature cards can be obtained a number of different ways. The most common is via a digital topaz screen (electronic screen that the customer physically signs when they open a new account). There are some situations however where the customer can not come to the branch and sign, so we will go to the customer and have them sign a “wet” signature paper form, and then we come back to the branch and scan that paper form to our customer accounts team. I am trying to find out if that scanned wet signature will hold up in court as an original (since after it is scanned we destroy the paper copy). Additionally we have circumstances when the customer is out of area, or someone is opening a joint account where only one party is present in the branch and we send out the signature form electronically to the other party via email and they “remote E-sign” via a digital signature (which is just a printed version of their name). I am wondering if these will hold up in court? Furthermore, have you ever seen where a bank will allow customers to completely doc-u-sign/ remote E-SIGN a loan application and all associated closing documents? Even the big players in this space (Rocket mortgage, Quicken loans) usually send a mobile Notary once all the paperwork is completed to come meet with you and obtain a wet signature on the paperwork. Our mortgage department has asked if instead of that wet signature at closing if an electronic signature would suffice in the courts. What about Deeds of Trust, can they have electronic signatures? I really appreciate your help or any insight you can provide via your years in banking. If you find or know of any relevant case law please let me know as that would certainly help in my analysis.
Loan to New Entity-Short Term Line of Credit
07/14/2019
We are trying to make a loan to a new entity and provide a short term line of credit to help fund the costs of there first contract as a company. We are wanting to take an assignment of the contract and have their customer issue joint checks for their payouts. I have been unable to find any document that works on our compliance software. Any ideas of how I would perfect this transaction?
Reliance on another financial institution
07/14/2019
If two separate, unrelated banks have a mutual customer that is engaging in an unrelated loan at each bank that is NOT a participation loan, can one bank rely on the other bank's beneficial ownership efforts? Again, there is no relation between the two banks or the loan being conducted, the only common denominator is the each bank is working on a loan for the same legal entity. We have a situation to where the legal entity's beneficial owner does not want to supply his information to us as he already provided it to the other bank that is working on a separate loan for him. It was basically suggested for us to ask the other bank for the beneficial owner information. It is also being suggested that this falls under the reliance provision listed below. I am thinking it does not as there is nothing connecting us to the other bank or the loan they are working on. (j)Reliance on another financial institution. A covered financial institution may rely on the performance by another financial institution (including an affiliate) of the requirements of this section with respect to any legal entity customer of the covered financial institution that is opening, or has opened, an account or has established a similar business relationship with the other financial institution to provide or engage in services, dealings, or other financial transactions, provided that: (1) Such reliance is reasonable under the circumstances; (2) The other financial institution is subject to a rule implementing 31 U.S.C. 5318(h) and is regulated by a Federal functional regulator; and (3) The other financial institution enters into a contract requiring it to certify annually to the covered financial institution that it has implemented its anti-money laundering program, and that it will perform (or its agent will perform) the specified requirements of the covered financial institution's procedures to comply with the requirements of this section
Right to Rescind H-9 form & "Original Lender"
07/07/2019
A question has come up about when to use of the Right to Rescind H-9 form and who is the "original lender". Here is my scenario: The Original Lender, ABC Bank, closed the loan and is on the original Note and Mortgage. They immediately sold it to XYZ Company, and XYZ Company reports the mortgage to the credit bureau and is now going to refinance the existing Mortgage. Does XYZ Company have to use a Right to Rescind Model H-9 form because it is the Current Lender and the payoff is coming from them, or is the H-9 form only used for the Original Lender on the Original Note/Mortgage? I cannot find a concrete answer, I did notice that the H-9 form seemed to have changed. It did say Original Lender but newer versions seem to say Current Lender, but I don't know if this is in the regulation.
