Most Popular Lending Content
HMDA- Primary Residence Used to Purchase 2nd Home
12/01/2019
We have a borrower that is using their primary residence (that does not have an existing lien) to purchase a second home. If I am understanding Reg C correctly, I would be reporting the loan as a purchase because that is what the funds are being used for. Would I then report it as a primary residence because the property that will have the lien is their primary residence or would it be a second home because that is what the funds are being used for?
Delivery of a Closing Disclosure by Email
12/01/2019
In search for further guidance on compliance for delivery of a Closing Disclosure (CD) by way of email (with a borrower's E-Sign consent) we have varying differences in the interpretation of the word "Receipt". It has been our department's practice to deliver the CD within no less than 3-business days prior to closing. Documentation to evidence delivery has been by including a printed copy of 1) email showing our department's delivery of the CD to the borrower by way of email, and/or 2) a printout showing the "Arrival Date" of the email/attachments to the borrower. Some have interpreted the "Receipt" rule as evidence the email and attachment(s) was "OPENED". Are we in violation if a loan is scheduled to close on a Monday and the borrower did not “OPEN” the email until the 2nd business day (Thursday) prior to closing – even though we have evidence to show “ARRIVAL” of our CD on or before the 3rd business day prior to closing?
Bank Responsibility for Flood Insurance Coverage
11/24/2019
Our secondary mortgage department underwrote a loan for a property and ordered a flood determination/SFHD on the property from our vendor. The SFHD issued noted that the property was located in flood zone X. Based on this, the loan closed without flood coverage in place. Subsequent to closing it was determined that the loan would need to be retained in-house. The bank's credit department ordered another SFHD from a different vendor. This SFHD came back noting that the property was located in zone AE, requiring flood insurance coverage. When contacted the first vendor they reissued a SFHD and updated the flood zone to AE. Obviously, the property must now be insured and any recourse against the first vendor would depend on the terms of the contract with the vendor. The question from management is whether the bank can (with proper notice) now require the borrower to obtain flood insurance or will the bank have the responsibility to provide coverage? I believe that the responsibility lies with the borrower - it would be no different in the particular set of circumstances than if there was a map change placing the property in zone AE where it was previously in zone X. Whether management elects to provide none, all or part of the cost is a business decision. I would agree that the Bank (or original vendor) should pay for the insurance (force place) for the gap period.
Reporting Commercial Loans to Credit Bureau
11/24/2019
Can we report adverse credit to the credit bureau on a commercial loan and the guarantor if we don't normally report our commercial loans to the credit bureau?
Modification Fees on Construction-perm Loans
11/24/2019
I have a question regarding modification fees on our construction-perm loans. If additional fees are incurred at modification (Appraisal fee, recording fees, title fees, etc.) and were not disclosed on the loan estimate or closing disclosure, are we able to collect and charge them or would this be a TRID tolerance issue?
