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Thank you Jack!
Following up on your reply. We double check the signed seller CD against ours when we receive them from the settlement agent (we don’t get the final Seller CD until after consummation). About 50% of the time they are different than what we received prior to closing – most of the time minor items that do not impact the borrowers fees/obligations but they require us to update our CD and send a revised copy to the borrower.
I just wanted to put an update on this post. We decided to do it as a “refinance” and include the contract for deed as a liability since we didn’t see a way to include the credit card payoffs on the standard LE. We retained a copy of the contract in the file to show the “prior obligation” that we are satisfying and replacing.
Let me know if you disagree with our thought process.
What are your thoughts on this. Since we may do the permanent financing and if we could we would be offering an all in one loan but can’t right now (so the intent is to try to get the business for the perm phase). Wouldn’t you think we “relied” on the application to some extent for the permanent phase even though we will get updated information down the road? I just don’t know how we would defend not providing the applicants with a LE for the permanent phase when we know we will likely be offering it to them at some point (we don’t offer it at the time of the construction loan necessarily).
Thanks for your input, it is greatly appreciated!The borrowers agreed to get the insurance and got right on it. But I’m struggling with the fact that it appears the only way to not have a (additional) lapse is to force place during the waiting period when the borrowers did take the correct steps and got insurance. The force place insurance they would have to pay for is 3 times as much as their policy, granted it will only be for a short period of time.
Did you locate this statement “Changed Circumstance: With respect to whether a changed circumstance or borrower requested change can apply to the revision of lender credits, the Bureau believes that a changed circumstance or borrower-requested change can decrease such credits, provided that all of the requirements of § 1026.19(e)(3)(iv), discussed below, are satisfied.” from the preamble?
Thanks!I just was researching this yesterday,
Here is what I shared with our bank.Full owner’s title insurance premium + Simultaneous issuance premium for lender’s insurance coverage-Full premium for lender’s insurance coverage = disclosed amount.
I tried plugging the above numbers in but I wasn’t sure if I was putting the correct ones in the correct place. The discount amount you reference, is that the lower issuance premium for the lender’s policy?
If that is the case I THINK this is your answer;):
Full owner’s title insurance premium (635) + Simultaneous issuance premium for lender’s insurance coverage (300)-Full premium for lender’s insurance coverage(400) = disclosed amount (535).Compliance gurus correct me if I’m wrong.
Homeowner’s Flood Insurance Affordability Act:
EXCLUSION OF DETACHED STRUCTURES FROM MANDATORY PURCHASE REQUIREMENT.
(a) EXCLUSION.—Subsection (c) of section 102 of the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a(c)) is amended by adding at the end the following new paragraph:
“(3) DETACHED STRUCTURES.—Notwithstanding any other provision of this section, flood insurance shall not be required, in the case of any residential property, for any structure that is a part of such property but is detached from the primary residential structure of such property and does not serve as a residence.”.I thought I would upload the above. I’m standing by residential only.
Yes, we would want to inform the borrower but with the way I read it I fear that we would get a changed circumstance that is within tolerance therefore (lets say it brings us up to 9% above the original disclosed amount for the category) not allowing us to use the new figure in the comparison chart which only leaves us with a 1% cushion for overall increase. It just seems unfair. -Thanks for the listening ear!
I guess I’m still confused. See integrated disclosure commentary pg 67-
ii. Charges subject to the ten percent tolerance category. Assume a creditor provides a $400 estimate of title fees, which are included in the category of fees which may not increase by more than 10 percent for the purposes of determining good faith under § 1026.19(e)(3)(ii), except as provided in § 1026.19(e)(3)(iv). An unreleased lien is discovered and the title company must perform additional work to release the lien. However, the additional costs amount to only a five percent increase over the sum of all fees included in the category of fees which may not increase by more than 10 percent. A changed circumstance has occurred (i.e. New information), but the sum of all costs subject to the 10 percent tolerance category has not increased by more than 10 percent. Section 1026.19(e)(3)(iv) does not prohibit the creditor from issuing revised disclosures, but if the creditor issues revised disclosures in this scenario, when the disclosures required by § 1026.19(f)(1)(i) are delivered, the actual title fees of $500 may not be compared to the revised title fees of $500; they must be compared to the originally estimated title fees of $400 because the changed circumstance did not cause the sum of all costs subject to the 10 percent tolerance category to increase by more than 10 percent.So we can re-disclose but can’t use the re-disclosed amount in the comparison chart if the changed circumstance was less than a 10% increase?I was just going to post a similar question, I believe the campaign is compliant but am now concerned we may be triggering a bonus.
Here are the details of the campaign:
In order to encourage customers to use their check card more they will deposit $10 into their account at the end of the quarter if they meet the advertised amount of transactions. They plan on doing this a few times through out the year.
In Reg DD it states if a bank give a consumer two or more promotional items that are worth more than $10 combined the promotional items constitute a bonus if given during the same calendar year. Our advertising rep doesn’t feel this falls under the definition of a “bonus” but wanted to get a second opinion, I was wondering if it would fall under “maintaining an account”. Your interpretations are greatly appreciated.
