We have an existing customer that is a home builder. Our customer is
partnering with a new individual to purchase and develop a small subdivision.
Our preliminary due diligence (do not have a formal application, run a credit
report or OFAC) reveals the new individual was convicted of a felony (failure
to complete a Form 8300 with a prior mortgage company he owned) and served 7
months in federal prison. Information shows he was well aware of what he was
doing in order to facilitate the laundering of money for a drug dealer
through his attorney.
Can we decline a loan request based upon an individual’s criminal past? We
are also trying to measure Fair Lending at the same time here.
I have an entity assuming the debt of another to purchase a residential property. Since the loan will be secured by a first lien on a residential dwelling, will I need a new business loan application for the new borrower? Our original business loan application specifies the original borrower.
In our residential mortgage loan application in process, an application was completed (6 pieces of information collected) on 2/28. Our lender mailed out the initial disclosure package on 3/1. This package includes the loan application which contains our joint intent notice. Is this in compliance with ECOA given that the notice was not mailed on 2/28, or is it acceptable to send it on 3/1?
"..3. Evidence of joint application. A person's intent to be a joint applicant must be evidenced at the time of application. Signatures on a promissory note may not be used to show intent to apply for joint credit. On the other hand, signatures or initials on a credit application affirming applicants' intent to apply for joint credit may be used to establish intent to apply for joint credit. (See Appendix B.) The method used to establish intent must be distinct from the means used by individuals to affirm the accuracy of information. For example, signatures on a joint financial statement affirming the veracity of information are not sufficient to establish intent to apply for joint credit."
Can a bank require a co-signer on the first loan a borrower has ever had even if they qualify on their own?
Is an adverse action/counter offer determined by the loan product or the loan amount? If I am doing an 80% LTV cash out Mortgage refinance (ex: $80K loan on $100K estimated value) but the appraisal value comes in for less than estimated, I now have to change the loan amount to 80% of the actual value (ex: verified value = $90K therefore new loan amount is $72K).
Does this mean that I have to do an adverse action/counter offer in addition to re-disclosing an updated loan estimate for the change in loan amount? My product is still the 80% LTV cash out mortgage refinance. My product did not change and I am still giving the borrower cash out that he requested, it just isn't as much as we estimated.
If the bank receives a joint application but one of the joint applicants is a minor, can the bank deny the loan based on age of one
individual (the minor) without facing possible discrimination? Under ECOA an institution may treat credit applicants different when under the age of majority based on state laws. But what if it is joint and the other applicant is of age?
What should the application date on the HUD 1003 be based on, the applications definitions for Reg B, HMDA, RESPA & TRID?
If an applicant is declined for a loan but then decides to re-apply with a co-borrower is this considered a counteroffer, meaning an adverse action for the first request would not need to be sent?
We are trying to set up mortgage application online. We are having debates on what disclosures we need and how to provide the disclosures. Is it something as simple as sending a PDF or does it require us to follow E-SIGN? If the mortgage is submitted online, do the disclosures need to be sent online?
Two years ago we granted a new loan and took a first mortgage on a piece of vacant land as collateral. The loan is now going through a renewal. While completing the evaluation, we learned that the borrower; using his own cash, built a home on the property that’s encumbered. The way our mortgage reads, we have interest in ... all existing or subsequently erected or affixed buildings, improvements, and fixtures...
When we complete the valuation report, should the value of the home be included in the report and furthermore, if so, should the report be mailed to the borrower under Regulation B?