Most Popular Lending Content
Lending To Insiders, Reg O, and Required Clauses
03/11/2002
Our bank has a separate mortgage subsidiary that originates all of our mortgage loans. We wish to begin mortgage lending to insiders, but to keep it arms length, will assign all such loans to an investor immediately at closing, and all will be sold service-released. Is it still necessary that a clause be included in the note per Reg.O sec. 215.5(d)(4) giving the bank the right to call the loan if the insider becomes indebted to other banks in an amount greater than the limits imposed by the the regulation? Under these circumstances, it doesn't seem to make sense.
Here's a loan scenario. When would the right of rescission begin?
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)
Reg O: Annual Board Approval For Executive Lines Of Credit?
03/11/2002
I am looking for some help interpreting the need for Board approval of executive officer's lines of credit under Regulation O. Must the lines of credit be approved by the Board annually?
Can a lender require a spouse to sign for a business loan?
03/04/2002
Borrower is a corporation with one shareholder. All business assets are pledged as collateral. Lender wants the spouse to also sign on loan docs, with the concern being that she may gain ownership of at least 1/2 assets should they divorce. Would asking her to sign be a violation of Reg B? If so, does the lender have a bona fide concern regarding assets or does the fact that the borrower is a coporation make this a non-issue? Flip side: What about if the borrower was a partnership or sole proprietorship and the spouse has no role in the affairs or function of the business? (e.g., farmer Bob who takes a loan secured by crops.) Lender wants to add wife to loan as a condition for the same reasons listed above. How should I advise my lender?
Is it illegal to charge a loan documentation preparation fee?
03/04/2002
Is it now illegal for us to charge a loan documentation preparation fee?