We have a customer requesting a HELOC instead of a short term construction loan in an attempt to avoid the draws. After construction is complete, a closed end mortgage would be provided. Since there is no equity in the home at this point, because it is not built, are we able to offer a HELOC for their home construction? Also, since they plan to pay off the HELOC at the end of construction, does the requirement for "repeated transactions" apply?
We have a customer who has a home equity loan. We found that about $8,000 in draws which were not posted to his account from a year ago. His loan is now almost maxed out. Is it too late to charge his account? Is there a time limit to correct our error?
If a customer uses a HELOC access check to advance funds, does a transaction
description other than "Advance" need to appear on the periodic statement?
XYZ is our service provider for mortgage loans. They are telling us that there is no way to split out the daily interest to only calculate it based on the initial draw at closing. The system is going to calculate interest owed on the total available balance of the HELOC.
Our core provider cannot charge prepaid interest on the full amount of a HELOC, just the total of the first advance. So they are both different and it does not seem permissible to charge a customer money on something they have not borrowed yet.
Please let me know if XYZ can even accrue on the full amount?
Is the servicing disclosure required on Home Equity Lines of Credit?
Can a Home Equity Line of Credit be done for a borrower who has PMI insurance on their first mortgage?
We know that HELOCs are exempt from 12 CFR 1026.43. Our borrower is applying for a HELOC. He has four residential properties which he owns and is paying the taxes and insurance on these. None of these are his primary residence nor are they investment properties. The taxes and insurance are not on the borrower’s filed tax return . Do we need to include the taxes and insurance for these other non-primary residence real estate properties as expenses when qualifying the borrower for a HELOC?
Our HELOCs are tied to prime. We disclose that. If prime increases do we need to send rate change notices?
Is there any reason why we are not allowed to have First Reserve/LOC statements and HELOC’s to be estatement?
The previous Commentary to Reg Z at 1026.5b contained the following statement regarding a matured HELOC: "...A new plan results; however, if the plan is renewed (with or without changes to the terms) after the scheduled expiration. The new plan is subject to all open-end credit rules, including sections 226.5b, 226.6 and 226.15."
I have not found any comparable interpretations by the CFPB since the CFPB took over responsibility for Regulation Z. I'm looking for any information that will support the need, or lack thereof, to require a Notice of Right to Cancel when a new HELOC note is executed after the existing HELOC has matured.