We are still struggling with HOEPA. None of us wants to originate HOEPA loans but if we do, we have the disclosures ready to issue the borrower (3 days prior). Is anyone aware of how many or what percentage of a bank's portfolio can be identified as HOEPA loans before the bank is viewed unfavorably by the regulators and/or Community Groups? Has a benchmark been published or discussed somewhere? Any ideas?
Is there a simplified summary of the current, pending HOEPA changes/regulations, pertinent to a mortgage nondepository lender?
We are confused as to what is considered a prequalification and what is an application. According to your definition it's a prequalification if a specific property is not identified. We have a situation where a borrower came in and got prequalified without a specific property in mind. At this point we are classifying the file as a prequalification. Several days later he calls and says he has found a property and is signing the purchase agreement that day. Our loan officer does not send out disclosures until a week later when she gets the purchase agreement. Should her three days have started when he told her he had found a property and was signing the purchase agreement? Our loan officer is saying that the borrower did not state the specific address (the loan officer did not ask for it either). Therefore our loan officer said it was still a prequalification until she received the purchase agreement. Is the loan officer correct? If it is not considered an application until we have the specific address what obligation do we have to ask for the address? This loan officer also stated that she never does the disclosures until she has a purchase agreement. Any information you have on a prequalification versus application and when we are required to send disclosures would be great. We argue about this all the time!