Effective October 1, 2013 the National Flood Insurance Program no longer allows an exception to the 30-day waiting period for policies that are required as a result of a lender determining that a loan on a building in a Special Flood Hazard Area that does not have flood insurance coverage should be protected by flood insurance. The only allowable exceptions to the 30-day waiting period are: A. The initial purchase of flood insurance coverage in […]
Category: Lending Compliance
PERMISSIBLE PAYMENTS TO LOAN ORIGINATORS
Recently I received a question about appropriate methods of compensating loan originators. Section 1026.36(d) of Regulation Z prohibits payments to loan originators based on the terms of the transaction. Restrictions on compensation to loan originators have been in place for several years. The latest revisions to the rules are effective January 10, 2014. While there are several significant issues resolved by the January 10th revisions, the question involved a less significant part of the rules. […]
POINTS AND FEES – INDEX RATE FOR PERSONAL PROPERTY
When calculating points and fees §1026.32(b)(1)(i)(E and F) allow the creditor to exclude from the calculation up to two bona fide discount points under §1026.32(b)(1)(i)(E), or up to one bona fide discount point under §1026.32(b)(1)(i)(F), paid by the consumer in connection with the transaction, if certain conditions are met. When a loan is secured by personal property, such as a mobile home, the condition is that the interest rate without any discount does not exceed […]
FLURRY OF YEAR-END THRESHOLD ADJUSTMENTS
The Consumer Financial Protection Bureau (CFPB) just completed the usual year-end chore of updating various thresholds. The changes are based on the annual percentage change in the average of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for various periods in 2013. Escrow Exemption for HPMLs – On December 30, 2013 the CFPB amended the official commentary that interprets the requirements of Regulation Z (Truth in Lending) to reflect a change in […]
HMDA – HOEPA STATUS
Section 1003.4(a)(13) of Regulation C requires that the Loan Application Register indicate, among other items, whether the loan is subject to the Home Ownership and Equity Protection Act of 1994 (HOEPA), as implemented in Regulation Z (12 CFR 1026.32). Under current rules a loan secured by a consumer’s principal dwelling is subject to HOEPA if the loan has a high rate or high fees. Currently a loan has high fees if the total points and […]