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Vendor Guru Q&A - Lending

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Latest Lending - Forced Placed Topics

Property Not In A Mandatory Purchase Flood Zone

10/09/2016

What approach do other lenders take when a property is not in a mandatory purchase flood zone, but "maps-in" during the origination of the loan? In some institutions, we've had a process to verify the flood zone prior to close, but others have allowed loans to close and immediately put the loan into the 45-day flood letter cycle?

Backdating of Force Placed Insurance

07/17/2016

I have a question related to long backdating (or just backdating) for force placed insurance. I am not finding a lot of information regarding backdating polices other than the standard 45 days that is required when placing a policy that has lapsed or expired. Does anyone know if there are current lawsuits concerning backdating a policy to an 'effective date' and charging the customer for that time even if nothing happened to their dwelling? For example, when we charge the customer on the 45th day of a new policy, but it is back dated to when their policy expired or lapsed, is this seen as a UDAAP issue with consumers? In essence we are charging them for a policy when they did not have a claim, so I am unsure what recommendations I should make regarding backdating polices. And, there are no kickbacks, this is simply a backdating question and premiums for servicing. I hope this makes sense! I am having difficulty finding any litigation and/or trends regarding this. Any feedback is welcomed. I am familiar with the process of 1024.37 however am looking a little deeper into the effective dates of polices placed, hazard or flood. Also cannot find much on Fannie Mae or Freddi Mac.

Expiration of Flood Premiums

07/03/2016

We are on a loan audit at a client's bank. Loans with collateral located in a flood zone are escrowed to pay the premiums. This bank allowed a policy to expire and didn't pay the premium until 3 days after the expiration of the policy. I know I read somewhere in the new rules within the last 2 years that bank's have the responsibility of paying flood premiums timely, before the expiration of the policy. Did I dream this or is it part of the new rules? If so, where can I find it.

Mortgage Impairment​ Policy

12/12/2015

The bank has a mortgage impairment​ policy that states the lender is covered in the event of a loss due to flood​ damage​ in the amount equal to the outstanding loan amount or the limits imposed by​ the flood regulation, whichever is less. Is this type of coverage​ sufficient to serve as a "force placement of flood insurance" in the event a borrower allows their flood policy to lapse and they have not responded to​ the banks request for a new policy? In the regulation it reads we have to​ force place on behalf of the borrower...the borrower is not covered in this case, only the outstanding loan amount is. I am interested in your thoughts. Also, we do not charge the borrower for any force place coverage in this situation.

Most Popular Lending Content

Dwelling as secondary collateral

02/17/2019

The primary collateral for a loan is business assets, although a dwelling was also taken as collateral. Is this loan not reported for HMDA?

Updated Index for Discounted Rate on ARM Product

02/17/2019

We offer a discounted rate with some of our ARM products. We use the index at the time the rate was set to calculate the fully indexed rate throughout the entire loan and that is what is disclosed on the LE and CD. Under what circumstance would we locate an updated index from a the date of closing or within 45 days of closing and disclose a blended APR. Would this be a 2 time construction closing? We disclose based on once the rate/index is locked that is the rate/index we use when we close. Unless of course the loan is re-locked for any reason.

CFPB Update On Construction Loans (Perm Financing)

02/17/2019

We are being told that the CFPB has given an update on construction loans at the time of perm financing. We are understanding it to read that if you do the modification into perm financing (no new loan) it is not HMDA reportable. Does this mean a construction loan would never to reported if this is the case?

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