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The answer to this would need to come from the investor and/or program that is requiring the course. Not having the details behind this request does not allow for better answer.
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I can’t answer for other institutions but at will seem to be a risk IMO. How will it be monitored? Do these “at will” pulls cause any negative effects to the consumer/customer? What is the purpose for needing at will? Based on HCR programs and Third-party management due diligence standards a case could be made for a frequency that aligns with your programs based on their risk rating, but I would caution the “at will” concept. Without strong controls based on a program built on your institutions risk program standards.
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The section of the regulation that speaks to Written List of Providers is Paragraph 19(e)(1)(vi) – 3. It states –
If the creditor permits the consumer to shop for a settlement service it requires, § 1026.19(e)(1)(vi)(C)[Written List of Providers] requires the creditor to provide the consumer with a written list identifying at least one available provider of that service and stating that the consumer may choose a different provider for that service.
The settlement service providers identified on the written list required by § 1026.19(e)(1)(vi)(C) must correspond to the required settlement services for which the consumer may shop, disclosed under § 1026.37(f)(3). See form H-27 in appendix H to this part for a model list.
Creditors using form H-27 in appendix H properly are deemed to be in compliance with § 1026.19(e)(1)(vi)(C). Creditors may make changes in the format or content of form H-27 in appendix H and be deemed to be in compliance with § 1026.19(e)(1)(vi)(C), so long as the changes do not affect the substance, clarity, or meaningful sequence of the form. An acceptable change to form H-27 in appendix H includes, for example, deleting the column for estimated fee amounts.
I’m not sure I understand your question or why your Audit firm is saying it is a violation as long as you have identified one vendor for the service and have them listed in ABC order having the same one listed for different services they offer doesn’t appear to be an issue.
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Per the Veteran’s administration requirements they should be keeping a list on their website. But as part of the application process doesn’t your application ask them? If not as part of normal due diligence it would probably be a good idea to ask anyone with medical debt if they are or have been a member of the armed services. Since the CFPB is considering the removal of all medical debt in credit decision you may want to watch the proposed rule as well.
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You have file requirements for all disclosure sections of Reg. Z as well as the Reb B. retention. I would also recommend you reviewing any state retention requirements and for consistency retain the documents at the most conservative date.
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Okay, then if I’m understanding from the original question this is a business purpose/commercial loan. Commercial loans only get recorded on the LAR if the dwelling is for purchase, refinance or home improvement. To be a dwelling for HMDA the property has to be in the United States of America, the District of Columbia, or the Commonwealth of Puerto Rico. Since none of the improvements are going to the property in the US, IMO, I would not put it on my LAR, because from the commercial requirements it doesn’t meet the purpose of when you do file.
However, if you feel it needs to be reported. They do allow for voluntary reporting. Another option would be to contact the HMDA Help desk at: HMDAHelp@cfpb.gov.
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My response was related to the definition of a dwelling. The home improvements being done on a property outside of the US do not count as a dwelling. So the transaction is not IMO, a home improvement.
Scope § 1003.1(c)
Regulation C:
• Applies to financial institutions as defined in § 1003.2(g).
• Requires a financial institution to:
*Submit data to the appropriate Federal agency for the financial institution as defined in § 1003.5(a)(4); and
*Disclose certain data to the public, about covered loans for which the financial institution receives applications, or that it originates or purchases, and that are secured by a dwelling located in a State of the
United States of America, the District of Columbia, or the Commonwealth of Puerto Rico.Since the property being improved on is not in the United States of America, the District of Columbia, or the Commonwealth of Puerto Rico. It does not fall into the “dwelling” category.
The regulation does allow for voluntary reporting, so if a business decision is made to report this on the HMDA LAR, you can report it. However, the property being improved is not a “dwelling” for HMDA purposes and this is a business loan. Which has allowable exemptions.
To verify – the original loan is not being refinanced? But just using equity where is will be like a second lien?
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The updated version is more straightforward. IMO
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No, this is not a HMDA reportable loan. It includes no residential structure.
Business Purpose Paragraph 3(c)(10)-1
If an institution determines that a closed-end mortgage loan or an open-end line of credit primarily is for a business or commercial purpose, then the loan or line of credit is a covered loan only if it is:
• A home improvement loan under § 1003.2(i).
• A home purchase loan under § 1003.2(j); or
• A refinancing under § 1003.2(p).Dwelling – Exclusions Paragraph 2(f)-3
Recreational vehicles, including boats, campers, travel trailers, and park model recreational vehicles, are not considered dwellings for purposes of § 1003.2(f), regardless of whether they are used as residences.
• Houseboats, floating homes, and mobile homes constructed before June 15, 1976, are also excluded, regardless of whether they are used as residences.
• Also excluded are transitory residences such as hotels, hospitals, college dormitories, and recreational vehicle parks, and structures originally designed as dwellings but used exclusively for commercial purposes, such as homes converted to daycare facilities or professional offices.NOTICE: This email message, including any attachments, is intended only for the addressee, and may contain confidential and privileged information either as protected work product or confidential client information. Any unauthorized review, use, disclosure or distribution is prohibited. If you are not the intended recipient, do not read, copy, retain, or disseminate this message or any attachment, and please contact the sender by reply e-mail or at 888.760.5646 and destroy all copies of the original message and attachments. Neither the transmission of this message or any attachment, nor any error in transmission or misdelivery shall constitute waiver of any applicable legal privilege.
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ADV question – CAN-SPAM Laws for Email Marketing Campaigns
Content Compliance
*Make sure the sender information in your “From,” “To,” and routing data accurately identifies you or your business as the sender.
*Don’t send emails with false header information.
*Avoid misleading subject lines that make your email appear scam or spam. For example, if the email contains sexually-oriented information, you need to label it as “SEXUALLY-EXPLICIT” in the first part of the subject
line.
*Identify the email as an advertisement. The CAN SPAM law requires you to identify your email as an advertisement but gives you leeway in how you do this.The CAN-SPAM Act does not require
*A subject line: The CAN-SPAM Act does not require a specific subject line for commercial emails.
*The inclusion of certain words or phrases: There is no requirement to include specific words or phrases in a commercial email’s subject line or body to ensure CAN-SPAM compliance.Based on what this states, i do not think you would have to put an ADV in those type of emails.
Section 8 Question:
No, I do not think you can put any realtor information in those emails. Co-branding is considered a thing of value which violates RESPA Section 8.NOTICE: This email message, including any attachments, is intended only for the addressee, and may contain confidential and privileged information either as protected work product or confidential client information. Any unauthorized review, use, disclosure or distribution is prohibited. If you are not the intended recipient, do not read, copy, retain, or disseminate this message or any attachment, and please contact the sender by reply e-mail or at 888.760.5646 and destroy all copies of the original message and attachments. Neither the transmission of this message or any attachment, nor any error in transmission or misdelivery shall constitute waiver of any applicable legal privilege.
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This loan is considered not HMDA reportable because you are to report the address where the home improvements are being made. Interestingly, if it was a purchase or a cash out refinance you would have to report because the collateral is the home in the US. Another little caveat if they had not told you the funds for the home improvement were for the property in Mexico you have had to report.
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Per TRID section §1026. 37(a)(9) this is a refinance regardless of who is on the deed. Since they are both on the original loan note. “Not for “purchase”, and if the credit will be used to refinance an existing obligation, but without regard to whether the creditor is the original creditor or a holder or servicer of the original obligation, that is secured by the property identified in paragraph (a)(6),”. State law may be the only thing that may change the purpose of this.
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You would not lump these in with the appraisal. Since it a service they can’t shop for it must go in the zero tolerance bucket on the LE and the CD and clearly stated who the company. All fees are to be in alphabetical order. Since it is an Appraisal Service Fee you could list it that way and the fee as $100. They do not need to be separated into 2 lines. If they do not pay this outside of closing then it would be a finance charge.
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Yes this is a violation for not being disclosed properly. TRID requires that the amounts and who they are paid to be accurate. Understanding how to properly write this up depends first on were they allowed to shop for the title copy and settlement agent? Depending on the answers would determine if it is zero tolerance, 10% or a permitted violation for curing. You also have a violation for preparing the disclosure wrong. Since you have found it to be inaccurate you must ensure a revised document goes out. But to do that the first question I asked needs to be determined. allowed or not allowed.
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Since the proceeds are being used to purchase investment property it would recorded as a purchase. Anytime proceeds will be used to purchase a new property it is to be recorded as a purchase.
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