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Comment 37(g)(2)-1. lists examples of items included in the prepaid section. The list includes property taxes. If property taxes are due, I would suspect that the amount that is due is payable by the seller, not by the borrower. If a portion is owed by the borrower, then the number of months is simply the number of months. Please clarify if I am missing something here.
My understanding is that the answer varies from one state to another. We suggest you have legal counsel determine the appropriate procedures for each state in which you are engaged in business, then build appropriate procedures to assure that your institution is adequately protected.
Translated documents are one way to handle LEP customers. If your institution is not willing to spend the money to have translated documents, and many financial are in that situation, then consider another option, such as providing a translation service. In a translator service the documents are read to the LEP individual in the language of their choice. Such services are widely available.
A script that indicates a refusal to do business with LEP individuals might be construed as intentional national origin discrimination under the Equal Credit Opportunity Act and/or the Fair Housing Act.
This appears to be a business purpose loan, a commercial shop. Section 1003.3(c)(10) excludes from reporting, “A closed-end mortgage loan or open-end line of credit that is or will be made primarily for a business or commercial purpose, unless the closed-end mortgage loan or open-end line of credit is a home improvement loan under § 1003.2(i), a home purchase loan under § 1003.2(j), or a refinancing under § 1003.2(p).” Your loan is not for home purchase, home improvement and not for refinancing, at least at the present time. After the 12 month term if the line was refinanced, then reporting would be required. Apparently your intent is to modify, rather than refi, at the end of the term, so, the line would not be reportable in that event.
The government is very good at putting requirements like this in place, but no so good at removing them once they have outlived their usefulness. I am not aware of any action revoking this requirement.
All of the disclosures in the Fed Box must be clear and conspicuous. The four disclosures – APR, Finance Charge, Amount Financed and Total of Payments must be more conspicuous than the other disclosures, and the APR and Finance charge must be the most conspicuous disclosures on the form. No particular font or type size is dictated by Regulation Z.
In Kentucky, the issue is whether a bank that closes a mortgage loan without the involvement of an attorney is engaging in the unlicensed practice of law. Many lenders have worked out an arrangement with their attorney’s that the attorney need not be physically present at the closing, so long as the closing is in fact conducted under his/her supervision and control, but the responsible attorney must be familiar with the documentation and be available at the time of closing for consultation.
It is appropriate that your closing disclosure is dated three business-days prior to closing, as required by the Federal Truth in Lending Act. Federal law does not require a settlement statement separate from the closing disclosure. If the party conducting settlement uses a separate settlement statement they decide what date and content to include. Care should be taken to assure that the content on the separate settlement statement and the content of the required closing disclosure are consistent. Differences between the two document could result in an UDAP violation, since the conflicting numbers could be unfair or deceptive.
Angie,
We agree with your conclusion – the unique identifier is not required in general advertisements.
Regulation B requires the collection of monitoring information for the purchase or refinancing of a dwelling occupied by the applicant as a principal residence, where the extension of credit will be secured by the dwelling.
If your loan is secured by the mobile home and if the mobile home will be the consumer’s principal dwelling, it appears GMI must be collected.
This is a routine weekly announcement made by the Department of Financial Institutions. Tennessee, and most other states, allow financial institutions choose the most favorable rate structure allowed under state law. Your institution is allowed to charge a rate much higher than the 9.5%.
Since the consumer already has title to the property, the purpose does not appear to be “purchase”. It appears that the proceeds of the loan will be used to pay the mother’s existing debt. This scenario appears consistent with a “refinance,” except that the old debt and the new debt don’t involve the same consumer. By default the purpose should be “home equity.”
You appear to have a changed circumstance, so a revised LE is appropriate. Both the revised LE and the CD should indicate the purpose is “home equity.”
Since the new loan is secured by property the consumer already owns, the transaction is subject to the right of rescission if the house is the consumer’s principal dwelling.
Your question doesn’t clarify whether a legitimate applicant provided fraudulent information in connection with an application or whether the person requesting credit assumed the identity of another. According to Regulation B an adverse action notice must be sent to an applicant within 30 days after receiving a completed application. The term application means an oral or written request for an extension of credit that is made in accordance with procedures used by a creditor for the type of credit requested. We suggest that you state in your procedures that any application containing fraudulent information is not consider as an application and that any request for credit received from a fraudulent applicant is also not considered as an application. This should eliminate future concerns. For now, if a legitimate applicant submits fraudulent information send an adverse action notice and indicate the reason(s) for denial, such as “unable to verify income.”
If multiple properties secure a loan, Regulation C requires in section 1003.4(a)(31) that the number of individual dwelling units related to the property should reflect all the properties that secure the loan. This does not appear to be a separate dwelling. As stated by pparks above, the pool house appears to an extension of the home.
A detached structure MAY be excluded from the flood insurance requirement if the conditions are met. One of the conditions is that the lender must determine if the structure is intended for use or actually used as a residence, which includes sleeping, bathroom OR kitchen facilities. The fact that the garage includes a bathroom confuses the matter. The safe practice is to require flood insurance on the garage.
