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
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.
I know Reg B talks about a lender not discriminating when collecting on a debt. What other regulation talks about a lender fairly treating a customer during collection procedures? Fair Debt Collection Practices Act? I think a lender collecting their own debt is exempt as a "debt collector" definition.
Our bank has a 3% ownership interest in a title company and we provide an affiliated business arrangement disclosure on all loans. Should fees paid to the affiliated title company be included in the Qualified Mortgage points and fees test and/or the APR calculation?
We received a referral for a commercial construction loan from a small business that specializes in providing information to those who are building homes. The construction loan does not meet any of the triggers for RESPA coverage. The referring source is requesting a 1% referral fee. The bank would pass this fee onto the borrower. My questions are: (1) Are there any regulatory or legal prohibitions on the bank paying this fee and passing it onto the borrower, and (2) if the fee is permissible, how should it be listed on the loan documentation?