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The appraisal fee is generally required to be listed on the CD. The fee is a 0% tolerance item, so it is important to get the disclosure right.
Was the fee listed on the LE?
Was the failure to list on the CD an oversight or is there another explanation?
For several years the CFPB was cranking out TRID guidance on a frequent basis, now it seems they have grown bored with the topic when there are still numerous areas that need clarification. We will continue to watch for clarification through regulatory guidance or through reported violations.
The Commentary to Regulation B states, “Section 1002.14(a)(1) applies when an applicant requests the renewal of an existing extension of credit and the creditor develops a new appraisal or other written valuation. Section 1002.14(a)(1) does not apply to the extent a creditor uses the appraisals and other written valuations that were previously developed in connection with the prior extension of credit to evaluate the renewal request.” You define your transaction as a new loan, not as a renewal. While the Comment does not address a new loan, we suspect that reusing an existing appraisal would not trigger the Regulation B disclosure requirement. The borrower already received a copy of the appraisal in the original transaction. Be sure to check the interagency appraisal guidelines. Also the requirements of Regulation Z, Section 1026.35(c)(3), do not allow reuse of an existing appraisal for a higher priced mortgage loan.
How you proceed will be determined by your current documents and by your bank’s procedures. Some lenders accomplish an extension of the term and an increase in the loan amount using a modification agreement; others refinance the loan. A refinance triggers new disclosures. Generally an extension/modification agreement does not trigger new disclosures.
How you proceed will be determined by your current documents and by your bank’s procedures. Some lenders accomplish an extension of the term and an increase in the loan amount using a modification agreement; others refinance the loan. A refinance triggers new disclosures. Generally an extension/modification agreement does not trigger new disclosures.
I don’t have any platform suggestions, but I encourage you to double check the requirements of the Fair Debt Collection Practices Act and Regulation F, which have a substantial impact on the use of email or text in the collection of a debt.
To clarify – you are proposing a mail campaign to realtors that offers the realtor’s customer a discount on closing costs. Your concerns are valid. Anything can be a potential Section 8 violation. The arrangement does not provide a direct value to the realtor, but the realtor could increase their transaction volume by promoting the savings available when the customer uses ABC realtor and XYZ Bank. Regulation X and CFPB interpretations do not list this arrangement as a violation, nor do they condone the arrangement.
The discount appears to qualify as a thing of value since the term includes “discount” and “special or unusual banking terms”, and “services of all types at special or free rates.” The term thing of value is broadly defined in section 3(2) of RESPA (12 U.S.C. 2602(2)). It includes, without limitation, monies, things, discounts, salaries, commissions, fees, duplicate payments of a charge, stock, dividends, distributions of partnership profits, franchise royalties, credits representing monies that may be paid at a future date, the opportunity to participate in a money-making program, retained or increased earnings, increased equity in a parent or subsidiary entity, special bank deposits or accounts, special or unusual banking terms, services of all types at special or free rates, sales or rentals at special prices or rates, lease or rental payments based in whole or in part on the amount of business referred, trips and payment of another person’s expenses, or reduction in credit against an existing obligation. The term “payment” is used throughout §§1024.14 and 1024.15 as synonymous with the giving or receiving of any “thing of value” and does not require transfer of money.
The question is whether the ting of value is tied to the referral. The fact that special pricing is offered to all realtors, not just those who make referrals, makes it less likely that an examiner would cite a violation.
You may consider running this by your federal regulator before starting the marketing program. They won’t necessarily provide advance approval, but they would generally share concerns with you.
Your supervisor is exactly half right. Section 1026.2 of regulation Z states, “Business day means a day on which the creditor’s offices are open to the public for carrying on substantially all of its business functions. However, for purposes of rescission under §§ 1026.15 and 1026.23, and for purposes of §§1026.19(a)(1)(ii), 1026.19(a)(2), 1026.19(e)(1)(iii)(B), 1026.19(e)(1)(iv), 1026.19(e)(2)(i)(A), 1026.19(e)(4)(ii), 1026.19(f)(1)(ii), 1026.19(f)(1)(iii), 1026.20(e)(5), 1026.31, and 1026.46(d)(4), the term means all calendar days except Sundays and the legal public holidays specified in 5 U.S.C. 6103(a), such as New Year’s Day, the Birthday of Martin Luther King, Jr., Washington’s Birthday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day, and Christmas Day.”
For purposes of the three-day delay in providing funds on a rescindable transaction, the specific rule is used. Saturday is a business day.
For purposes of TRID:
• The loan estimate must be provided within three business days of receiving the application. The days are calculated using the general rule, so Saturday is not a business day in your case, since your institution is not open for substantially all of your services on Saturday.
• The lender must wait seven business days after delivery of the Loan Estimate to close the loan. For purposes of the seven day delay of closing, the specific rule is used, so Saturday is a business day.The regulation shouldn’t be this complicated, but unfortunately it is.
Section 1003.4(a)(6) requires a financial institution to identify whether the property to which the covered loan or application relates is or will be used as an investment property. For purposes of § 1003.4(a)(6), a property is an investment property if the borrower does not, or the applicant will not, occupy the property. For example, if a person purchases a property, does not occupy the property, and generates income by renting the property, the property is an investment property for purposes of § 1003.4(a)(6). Similarly, if a person purchases a property, does not occupy the property, and does not generate income by renting the property, but intends to generate income by selling the property, the property is an investment property for purposes of § 1003.4(a)(6). Section 1003.4(a)(6) requires a financial institution to identify a property as an investment property if the borrower or applicant does not or will not occupy the property, even if the borrower or applicant does not consider the property as owned for investment purposes. For example, if a corporation purchases a property that is a dwelling under § 1003.2(f), that it does not occupy, but that is for the long-term residential use of its employees, the property is an investment property for purposes of § 1003.4(a)(6), even if the corporation considers the property as owned for business purposes rather than investment purposes, does not generate income by renting the property, and does not intend to generate income by selling the property at some point in time. If the property is for transitory use by employees, the property would not be considered a dwelling under § 1003.2(f).
Since your borrower occupies the property, use Code 1 primary residence.
We also have programs related to the ATR/QM standards and programs on TRID.
ATR/QM: https://mycomplianceresource.com/product/ability-to-repay-qualified-mortgage-review-and-update-webinar-recording/
TRID: https://mycomplianceresource.com/product/bundle-total-trid-training-4-part-webinar-series/Either recording may meet your needs. Both recordings focus primarily on the content of ARM application disclosure. The content you seek appears to be more related to the content of the “Fed Box” disclosure or the TRID disclosures.
https://mycomplianceresource.com/product/common-pitfalls-of-arm-disclosures-webinar-recording/ Recorded on 3/26/19
https://mycomplianceresource.com/product/arm-disclosures-review-and-update/ Recorded on 4/12/17
Either recording may meet your needs. Both recordings focus primarily on the content of ARM application disclosure. The content you seek appears to be more related to the content of the “Fed Box” disclosure or the TRID disclosures.
https://mycomplianceresource.com/product/common-pitfalls-of-arm-disclosures-webinar-recording/ Recorded on 3/26/19
https://mycomplianceresource.com/product/arm-disclosures-review-and-update/ Recorded on 4/12/17
Regulation B requires that a copy of the appraisal be provided to the consumer promptly upon completion, or three business days prior to consummation of the transaction. The regulation does not clearly define “promptly upon completion, but Comment 1002.14(a)(1)-5 includes several examples of promptly upon completion and each example clarifies that delivering the appraisal within one week after completion is considered prompt. Your 10-day delivery period exceeds the standard in the Comment. However, since you delivered it 3 days prior to consummation examiners are unlikely to find consumer harm in your practice.
While the rules have been finalized for an extended period, the Texas lawsuits still bar full implementation. When the lawsuits are fully settled, how long will it take for examiners to gear up and will your institution be ready when examiners are?
Both open-end and closed-end loans are reported on your HMDA LAR. However the LAR field that requires reporting of lender credits only applies to transaction subject to TRID, section 1026.19 of Regulation Z. HELOCs are open-end credit and are not subject to TRID, therefore the lenders credits on a HELOC are not reported on your LAR.
