07/15/2002
If a bank provides a right of rescission but disburses a loan before the 3-day cooling off period ends, what are the consequences to the bank if the customer then rescinds within the 3-day cooling off period (after disbursement and assuming no special emergency waiver)? Does this represent the cancellation of the contract itself or just the cancellation of the security interest? If the contract is still valid, though unsecured, can the bank charge interest on the loan while trying to collect? (Basically, what is the bank's legal recourse in regards to the improper disbursement?) Also, what are the possible regulatory penalties for such a violation?
07/01/2002
07/01/2002
No matter how you count or measure compliance risk, Truth in Lending has led the list for decades. The number of errors that translate into violations is always high.
07/01/2002
Is there a simplified summary of the current, pending HOEPA changes/regulations, pertinent to a mortgage nondepository lender?
06/03/2002
I have an old mortgage loan file that has a mobile home and land as collateral. The mortgage specifically lists the mobile home and all of its identifying information, however, we don't have a recorded UCC-1 on the mobile home itself. Are we considered a true lienholder on the mobile home or would we need a recorded UCC-1?
06/03/2002
With regard to a closed end home equity loan requiring a right of recission, can interest begin to accrue on the date the loan documents are signed or does interest accrual have to begin at disbursement of the proceeds?
06/03/2002
On a home equity loan, if there is anyone over the age of 18 living in the home at the time the loan is approved, do they have to sign the deed of trust even though they are not on the original deed of trust?
05/06/2002
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!
04/01/2002
On occasion, we have had customers who want to substitute collateral (such as wanting to sell the car that is being held as collateral and substitute with another car of same or greater value). We use a substitution form which is signed by the customer. I'm questioning if that is enough. Should the customer sign a new security agreement? Also, we have a difference of opinion when it comes to filing the new lien. Some people use the date of the collateral substitution as the security agreement date and some use the original security agreement date. If the latter is used, what about the 20 days to perfect our lien?
03/11/2002
When would the Right of Rescission begin in the following scenario? This involves closing of a home improvement loan. The situation is out of the norm, where documents were taken out of the attorney's office for additional signatures. Customer comes in November 15th to sign papers. However, in this case, a second signature is required on the deed of trust only, not the note, which also must be notarized and the right of rescission notice must also be disclosed to this individual. All documents in question were taken for signature. If upon return of documents, the Rescission notice was dated showing receipt as of the 15th but the D/T was signed and notarized 2 days later, for example on Saturday Nov. 17th, would your rescission period begin the Friday Nov. 16th or Monday Nov. 18th. I believe ROR should begin the latter to occur of consummation of loan documents (signing the loan documents), delivery of ROR notice or delivery of material disclosures. In this case, applicant's signing)