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TRID timing requirements:
1. The LE is required to leave the lending institution on the third business day, following the “General Rule”. There is no requirement to prove the borrower reviewed the LE.
2. Closing disclosure – the lending institution must prove the borrow reviewed them three business days prior to closing, following the “Specific Rule” If they do not acknowledge receipt three days before closing you will have to extend the closing date.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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1. Yes, update your applications to accurately state what your fees are.
2. Did you charge them a wire fee? If you did then yes, I would be refunding that fee to everyone who was charged for it. Not just for the one loan you identified it on.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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Yes, OFAC compliance requirements now mandate maintaining transaction records for 10 years, aligning with the updated statute of limitations for sanctions violations. The new ruling requires that every organization keep a full, accurate record of every transaction subject to OFAC sanctions for ten years.
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If the land was used to get the funds for the manufactured home, even free and clear it would IMO be a Home Equity. They could however be looking at it from section 1016.37(a)(6) in this section it speaks to a lot being owed already. Constructing the home in this case is the construction phase and the permanent phase is then referred to as a refinance. How, I’m understanding what you stated is they already own the land and are getting a loan to purchase the home. Nothing is being “constructed” but transported after it was built elsewhere.
I agree that the descriptions used for disbursement may have been confusing to the auditor. But “manufactured/mobile/modular” home definitions in the Regs (HMDA, Flood, RESPA and HUD) define this dwelling as being constructed elsewhere and moved to a permanent place. With that being said, IMO it is not a site build so it is not a construction loan. Construction definitions in the same regulations already listed define construction as being built on the land (site build). Also, IMO if the borrower understood the original CD as you had it described and you were doing it that way for everyone, it was a consistent process. The fact you changed the terminology for an auditor, just make sure the process is still clear to the consumer.
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Based on federal regulators if the appraisal is assigned to another institution that ordered it with their permission and that of the property owner it can be transferred to another institution as long as it is within a reasonable time frame if the receiving institution determines that the appraisal meets their own requirements, is still valid, and complies with relevant appraisal regulations. Additionally – 1) the appraiser must be engaged directly by the institution transferring the appraisal, 2) the appraiser has no direct or indirect interest in the property or transaction, 3) the existing appraisal or evaluation remains valid, and 4) the regulated institution determines that the appraisal conforms to the agencies’ appraisal requirements and interagency guidelines and is otherwise appropriate.
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Yes, I would consider a second home to be included in the rules. I’m more prone to be conservative when it comes to consumer protection.
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If a HELOC is being refinanced into another 1-4 family or multi-family dwelling type loan (e.g. open-end or closed end loan) and you meet the definition of a HMDA reporter you would need to collect the GMI information for reporting. If you are not a HMDA reporter you will still have GMI collection requirements under Reg B/ECOA (§ 1002.13(a)(1)) and/or FHA depending on who your regulator is for principal residences.
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@dianacraddock. Jack retired last May. When researching your question, I was unable to find the exemption he referenced in April of 2023. I did find a few fact sheets issued by the CFPB one specific to coverage https://files.consumerfinance.gov/f/documents/cfpb_ecoa-valuation_transaction-coverage-factsheet.pdf. As well as interagency FAQs https://www.occ.treas.gov/news-issuances/bulletins/2018/bulletin-2018-39a.pdf.
Neither of these allow for an exemptions for ECOA appraisal requirements nor was I able to find any exemptions for Reg B (ECOA).
Currently, the rules are focused on Consumer lending. However, I would not forget that Small Business tends to follow the lead of consumer. With 1071 rules going into play, you may want to consider any loans that will use personal property as collateral falling into these rules.
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The best way to not be discriminatory would be to follow your CIP/CDD rules. BSA/AML rules are not considered discriminatory.
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Disclosures require that your provide the best information at the time you created the CD. But you are also required to provide a revied one if something changed after you receive updated information. The positive is you do not have cure to worry about but you are required to send them an updated CD within 30-days.
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Since it is family gift from a relative (parent) the amount ($64k+) is disclosed as an “other credit” in the cost to close section of the Loan Estimate (LE) and the Closing Disclosure (CD). The seller credit ($5k) will be shown in the seller credit area of both the LE and CD.
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In our opinion, the best option would be to disclose it separately as it would be cleaner. If you were to add it annually into the loan you are “increasing” it and would trigger Flood. But you are correct in your assessment as well.
In the case of a sale for less than market value there are various opinions on the proper method of disclosure. We believe the safest approach is to disclose the contract sales price. The instructions for the LE and CD require the contract sales price be disclosed as “sales price” in a purchase transaction. Consumers purchasing a home for less than the fair market value prefer that the fair market value be shown as the purchase price, since that higher number improves the loan-to-value ratio. Using the higher number results in the “gift of equity.” The TRID regulations and related guidance do not address the disclosure of this arrangement.
Each of these items needs to be shown as what they are. One as seller credit and the other as a gift. Similar to the prior post – A sale for less than market value there are various opinions on the proper method of disclosure. We believe the safest approach is to disclose the contract sales price. The instructions for the LE and CD require the contract sales price be disclosed as “sales price” in a purchase transaction. Consumers purchasing a home for less than the fair market value prefer that the fair market value be shown as the purchase price, since that higher number improves the loan-to-value ratio. Using the higher number results in the “gift of equity.” The TRID regulations and related guidance do not address the disclosure of this arrangement.
As for how to show it. My question back. What does the contract say? Is it a gift or is it 20% off the sales price. If the contract states the sales price is $321,000 then that is what the sales price should state and the gifted amount needs to be shown as such. In our opinion not doing it this way would affect the LTV on the loan.
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