Vendor Guru Q&A - Lending

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.

Best Practice for Saving Emails into Document Management System

10/25/2020

What’s the best way to collect and organize important emails in our document management system?

Transferable Letter of Credit Precautions

10/18/2020

Please explain the precautions which should be used when issuing a transferable letter of credit.

Scanning Before Closing a Commercial Loan

10/18/2020

Why should we consider scanning documents before closing a commercial loan?

Reporting Revenue on Small Business LAR

10/18/2020

When reporting revenue on the small business LAR can you please clarify the following for me: We have a loan program called "Low Doc" in which financials are not used in making the credit decision based on a number of factors, however we do have the revenue information from the customer. In order that these loans are not reported as a code 3 – and not counted in our CRA totals, is it appropriate in using the business revenues that the customer provided?

State's Public Records-Record Retention

10/18/2020

We want to know if there is a vendor or website our bank can utilize to quickly retrieve public records online from various Secretary of State offices, tax cards & tax bills to pay escrowed taxes, retrieve recorded real estate docs i.e. recorded Warranty/Quitclaim Deeds, MTG-DOT and AOR's. The majority of states have their records available online but behind a paywall where you have to pay for each individual page of each document. There's 25+ of us between Lending, Legal, and Compliance that need access at our bank to these docs. In my previous banking career, we utilized a website called NETRONLINE.com with a paid subscription but it appears it is no longer available. Is there a substitute?

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