[MBT_Compliance1]

Question 1:
Is the Adjustable Payment (AP) Table needed if we have a 12-month fixed-rate construction-only loan with interest-only payments due monthly and a final balloon payment of principal and interest? I ask because the amount of interest-only payments per month may vary. Our LOS vendor is telling me the AP Table would not apply in this circumstance due to it being a fixed-rate loan.

Question 2:
If we have a loan with a single annual payment of principal and interest, do we disclose this full balloon payment in the monthly P&I payment section of Loan Terms on page 1 of the LE & CD? Example: $100,000 loan at 5% interest = 1 payment of $105,000 due at maturity. Our LOS is telling me the CFPB has advised them this is how it should be disclosed. I have not heard this anywhere else.

Topic

[rcooper]

Question 1:
Is the Adjustable Payment (AP) Table needed if we have a 12-month fixed-rate construction-only loan with interest-only payments due monthly and a final balloon payment of principal and interest? I ask because the amount of interest-only payments per month may vary. Our LOS vendor is telling me the AP Table would not apply in this circumstance due to it being a fixed-rate loan.

We have had recent conversations with the CFPB and have been told the AP table would not be included in these transactions, so your LOS vendor appears to be correct.

Question 2:
If we have a loan with a single annual payment of principal and interest, do we disclose this full balloon payment in the monthly P&I payment section of Loan Terms on page 1 of the LE & CD? Example: $100,000 loan at 5% interest = 1 payment of $105,000 due at maturity. Our LOS is telling me the CFPB has advised them this is how it should be disclosed. I have not heard this anywhere else.

What is the term of this loan? Is this a one time balloon payment or does the borrower make one payment of $105,000/year for X years?

[MBT_Compliance1]

Question 2:
If we have a loan with a single annual payment of principal and interest, do we disclose this full balloon payment in the monthly P&I payment section of Loan Terms on page 1 of the LE & CD? Example: $100,000 loan at 5% interest = 1 payment of $105,000 due at maturity. Our LOS is telling me the CFPB has advised them this is how it should be disclosed. I have not heard this anywhere else.

What is the term of this loan? Is this a one time balloon payment or does the borrower make one payment of $105,000/year for X years?

—-It is a one-time balloon payment.

[Author]

Replies