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Obviously if the loan pays off before the end of the five-year period the escrow can be cancelled. I don’t believe that the CFPB envisioned a scenario similar to yours. Under existing rules for HPMLs it is impossible to have a balloon payment on an HPML that has a term of less than seven years without incurring significant liability. Under the new ability-to-repay rules a balloon loan generally will be required to have a loan term of at least five years.
Great question.
There is a rule that prohibits a bank from participating in a lottery. This does not appear to be a lottery. The consumer apparently does not have to pay a fee to participate. I am not aware of any specific prohibition on debit cards.
Does anyone have any experience with this issue?
Kelly,
I am familiar with the required annual survey used to determine the related interests of insiders. I have never developed such a survey, but it would not be a difficult task.
It would be nice if an existing member already had a survey, that is not copyrighted and could be shared with all our members. I will mention this in the next meeting. Hopefully someone will have something to share. If not, you and I will develop one.
This is one of the best discussion strings I have seen in the Forum. This is the kind of give and take we have been waiting for. As a group you worked over the topic and reached the perfect conclusion. Thank you. Thank you. Thank you.
Thanks for your input. I wish I could figure out how to get the rest of our members into the game.
Based on this input I could conclude that only one member needs to be concerned about the Equal Access Rule, or I could conclude that 33% of our members are impacted by the rule. What a dilemma.
The first loan seems to fit the definition of a “home purchase,” but may be exempt as a bridge. The second loan loan appears to meet the definition of a “refinance,” but again it may be a bridge loan. You mention long-term financing, which reduces the likelihood that either loan is a bridge loan. You also mention a contractor.
We need a little more information here.
What is the term of each loan?
Is either loan used for construction?
What is the nticiated payout – monthly payments or proceeds of the sale of the current home?These are classic questions – they have been around for years and there are no definitive answers. I will give you my spin on these issues in a moment, but you or I, in a quick Internet search, can find several credible sources that will disagree with me and an equal number that will agree with me.
I encourage you to formulate the approach that makes sense to you and then run it by your friendly local examiner to determine if he/she concurs with your position. If your examiner agrees with your position then use that position consistently. Please understand there will other examiners that will disagree with whatever conclusion is reached by your examiner.
I know this is very frustrating, but this is the result went regulators fail to address specific questions such as these.
> One borrower dies and the other refinances – I agree with your conclusion that the loan is a refinance.
> Divorce and one party buys out the other party’s interest – I suggest that you report as a home purchase.
> Mother is dropped off the note when it is refinanced – I would not report at all.The problems occur when you charge a discount point, but do not lower the rate. It appears that your bank charges an origination point, rather than a discount point, so no rate adjustment is needed.
Regulation CC is not my strong suit. I believe the comment period closed in June of 2011, but the final regulation has not been published.
There are two acceptable methods of curing a tolerance violation.
Method 1 – As you described, show 0 on line 1101 and show the amount paid by the lender on line 1104 as POC – Lender
Method 2 – Show the full amount owed by the borrower on line 1101 and on line 1104. Then show a credit on page 1 on line 204 as a “cure for 10% tolerance category.”
If I understand the information you provided, a loan did not exist until 8/30. Generally a contract is not consummated until the borrower signs the note. Once the loan is consummated you may begin the accrue interest, if, as you mentioned, allowed by state law.
I have seen a few transactions similar to this where parties live in different cities and can’t all be present at closing. Documents are prepared and shipped to another city to be signed, and then are shipped back to the closing agent. That might explain the delay from doc prep to consummation and from consummation to funding. Even then it does not make sense to book a loan with a date prior to closing.
If all parties to your transaction were present at closing, documents should have been rerun for closing. At this point I can’t necessarily recommend reprinting the documents. I assume the mortgage has been recorded. You have a real can of worms. I suggest having the bank’s legal counsel untangle this mess.
Any time you make, increase, renew or extend a loan secured by a building or mobile home located in a special flood hazard area you must require the borrower to purchase flood insurance. You cannot make the loan without appropriate flood insurance coverage.
The full-page style notice has been required since 2006. The current version of the form is available at https://portal.hud.gov/hudportal/HUD?src=/program_offices/administration/hudclips/forms/hud9
The notice must:
Be sent to all homeowners who are in default on a residential mortgage;
Include the toll-free military one-source number to call if servicemembers or their dependents require further assistance (1-800-342-9647); and
Be made within 45 days from the date a missed payment was due, unless the homeowner pays the overdue amount before the expiration of the 45-day period.The BOL materials are top notch. I have been waiting to reply, hoping someone would jump into this discussion with some “homegrown” materials.
