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Here is the citation for joint intent: Supplement I to 12 CFR 202, Staff Commentary, comment no. 3 to §202.7(d)(1)
You need to be sure to follow all of the required regs, sounds like you may need to have two different applications.
You’ll need to refer to your Red Flag Policy to see. The Regs do not necessarily require it, but your policy/procedures of your financial institution may.
There are no regulatory requirements that I’m aware of that would require you to report on the Guarantors.
It has been my experience that most banks do not have customers sign a document for the Patriot Act. Most just have the notice on the desk.
If you are referring to having to collect some additional information, I don’t believe that has been finalized at this point.
Typically if there is a surplus (greater than $50) then the money should be given to the customers and not applied towards the payoff. If the same bank is refinancing the loan and the new loan is going to have an escrow feature, then the Bank can use the surplus towards the initial escrow deposit. How to disclosure this is address in the HUD’s RESPA FAQ’s in the HUD-1 200 Series section:
3) Q: Where should the transferred escrow balance in a refinance transaction be listed on the HUD-1?
A: The transferred escrow balance should be listed as a credit in lines 204-209 of the HUD-1.https://portal.hud.gov/hudportal/documents/huddoc?id=resparulefaqs422010.pdf
Here is a link where HUD addresses not applying a surplus amount from the escrow account to the principal balance of the a loan:
https://www.hud.gov/offices/hsg/ramh/res/resindus.cfm
34. Q: If the borrower’s escrow account includes a surplus greater than $50 which HUD’s rules require be refunded, may the servicer credit the surplus directly to the principal, rather than refund the surplus to the borrower?
A: No. However, the servicer may inform the borrower in the information accompanying the return of the surplus that the borrower may elect to use the refund to reduce principal or have it credited against the next year’s escrow payments.Penncm,
I have to admit that I didn’t see this question coming. I’ve never ran across this issue before, so maybe Jack can give us his insight on the topic.
Right off the top of my head, I can’t think of anything that would explicitly prevent them from doing this, thought I think it is somewhat odd. Typically in this situation, the financial institution or the applicant would pay for the extra fee, not a third-party. You mentioned your Mortgage department so I’m going to assume that you are dealing with a consumer real estate loan. You’ll need to be sure to properly disclose how that fee was paid on your HUD. I’m would think you would use POC but I’m not sure what letter you would use to indicate it was paid by a third party. Typically, you would use B for borrower, S for seller, and L for lender.
Probably not so much in this instance with the credit report, but when this is occurring with your appraisals, be cautious about how this could potentially impact Section 8 with kick-backs. I’m not saying that it would necessarily be a kick-back (section 8 violation), but that you should be very mindful of that topic, especially in these cases.
Lets see if Jack has any additional input…
If you are reporting information, it needs to be accurate for loans regardless of their status.
In looking at the Interagency Examination Procedures, bankruptcy is only mentioned once. It is mentioned on page 3.
Exceptions. The direct dispute requirements do not apply to a furnisher if the direct dispute relates to:
1) The consumer’s identifying information such as name(s), date of birth, Social Security number, telephone number(s), or address(es);
2) The identity of past or present employers;
3) Inquiries or requests for a consumer report;
4) Information derived from public records, such as judgments, bankruptcies, liens, and other legal matters (unless the information was provided by a furnisher with an account or other relationship with the consumer);
5) Information related to fraud alerts or active duty alerts; or
6) Information provided to a consumer reporting agency by another furnisher.I hope this helps.
Here is a paragraph out of an Accuracy & Integrity Procedures that I’ve wrote.
After a completed direct dispute notice is received the bank has 30 days to complete a reasonable investigation. This includes reviewing all relevant information provided by the customer; a complete investigation of the disputes and report the results to the consumer before the 30 day expiration of the dispute (FACT ACT 15 U.S.C. 1681i(a)(1)); and if information was found to have been reported inaccurately, promptly notify each CRA to which the bank reported the inaccurate information to.
I think that is a great call!
It is something that some big banks have missed in the past and paid dearly for.
RGS,
I don’t understand why you would be having such are hard time making this determination, after all you just have to look at the Reg, instructions on completing the HUD, HUD issued FAQ’s, and the various issues of the RESPA Round Up (insert sarcasm here). It wouldn’t be much of a challenge if they had everything in one place for us. OK enough, I’m getting of my soap-box now.
I did review all of the aforementioned items and I didn’t find anything that specifically spoke to this particular issue. That being said, the HUD should be accurate and complete and I would guess that the HUD is wrong.
I was looking at the items that are listed on the comparison chart and I don’t see that any of these items would necessarily be effected by the oversight that you mentioned. So that’s a good thing, that should mean no kind of reimbursements or cures to perform. It sounds like the bank took the responsible route to pony up for the miscalculation to payoff the loan. Assuming that this is not a common occurrence, I wouldn’t sweat it. Learn from it, see if there is anything you can put in place to help prevent it from happening again in the future, and move on.
I hope this helps…
