Most Popular Lending Content
Consumer Term Loan with Quarterly Payments?
04/21/2019
Can we no longer make a consumer term loan with quarterly payments?
Additional Borrowers
04/21/2019
How many borrowers can apply using a single Uniform Residential Mortgage Loan Application?
Denial for a Commercial Loan
04/21/2019
In regards to the check box options on an adverse action notice, as a commercial lender, I would like to add “Length of time in business is too short” as we do deny credit to many newly established companies (per our credit policy), so my question is this: Can I create my own reason(s) or are there a specific set of reasons that I need to adhere to? Where does ‘length of time in business too short’ (or verbiage to that effect) fit on an adverse action notice?
TRID Violation on Loan for Purchase
04/21/2019
A lender submitted a loan for purchase and I need help with a TRID violation that I found on the loan. The lender forgot to include two fees in the finance charges and the final closing disclosure signed by the borrower is understated by $535. Typically, we've always asked for a refund cure from the lender for the amount understated and a revised closing disclosure. The lender reviewed the situation and responded to me with this: "After reviewing this loan I concur that neither the Purchase Review Fee ($500) nor the Wire Transfer Fee ($35) were included in the finance charge. These fees are setup to be included in the finance charge. Support has looked into the issue and it appears that a user mistakenly or accidentally removed the check boxes. We are in the process of modifying our security settings to ensure that only limited users will have the security to change the prepaid finance status of any fees. I have generated new calculations and the Finance Charge is now $93,017.70; Amount Financed is $97,496.59; and APR is 5.076%. The APR did not increase beyond tolerance. The change does not impact the amount of closing costs nor does it change the cash to close required form our member therefore this does not constitute a post-consummation event (1026.19(f)(ii)) nor does it fall under the clerical error carve out (1026.19(f)(2(iv)) so there is not a way to cure but rather it is a technical violation that we will report to stakeholders." The lender is stating that the yes the finance charge was understated, but this is not something that can be cured as it is was not a good faith estimate of itemized charges 1026.19(f)(2)(v), and it was not a clerical error. At this point we have two options: • non-purchase for non-compliance with TRID • allow even though there may be harm to borrower. Would issuing a refund (cure) for an understated Finance Charge (assuming the Finance charge was understated by more than $100) bring the loan into compliance with TRID similar to issuing a tolerance cure for a specific closing cost fee increase?
Modifications Construction Perm-Reduce Rate
04/14/2019
I have a question about modifications on our construction perm loans to reduce the rate to sell on the secondary market. We have our construction perms, that after completion and when the loan is closed out, that upon completion of the construction, a “float-down” of the interest rate may be allowed if it meets the guidelines to sell on the secondary market. Does this trigger anything for Reg B or Adverse Action?
