- This topic has 1 reply, 2 voices, and was last updated 2 years, 11 months ago by .
-
Topic
-
We have a borrower situation presented recently that concerns consumer-purpose and UDAAP:
Two brothers operate a partnership, and the partnership as an entity, with the two brothers signing, have a mortgage on one of the brother’s homes. This was deemed consumer-purpose at the time (5+ years ago), but the brothers have recently decided they wish to disband the partnership. Our question came up as to doing a release of liability vs. doing a refinance. Given current market conditions, the brothers would prefer to not refinance as it would cause a dramatic rate increase for the loan. Our policy mentions that any consumer loan is not eligible for release of liability. Would we be in danger of a UDAAP violation if we entertained the release of liability in this case, if we then had to consider future similar situations for a release of liability? Ability to Repay for the brother and the home are considerations, are there any other compliance concerns in Reg X or elsewhere to consider?
- You must be logged in to reply to this topic.