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I received a message that the SBA will accept no additional loan entries for PPP once the total equals the $349B, which should be any moment now. If we cannot process a customer’s request for the PPP program, would we be required to give an adverse action notice? If yes, what would be the reason for adverse action?
One item I hear other banks are doing is allowing customers to skip the payment entirely (it is added on at the end), including interest and escrows payments (if applicable). Is skipping the entire payment allowed? Can you skip payments (I have heard some are allowing customers to skip 2-3 months) without collecting any interest and escrow payments? If yes, does it make a difference on the loan type, i.e., commercial, consumer installment, consumer real estate?
Has there been any updated guidance on pandemic-skip a payments, especially related to loans in a flood zone?
So, do you feel if we obtain tax returns from the borrower(s) (not the IRS), that we would not be required to obtain the taxpayers consent?
Thank you, Robin, that is what I think too. I wanted to make sure there was not something I was missing. Thank you for your help!
Our practice is to order the flood determination after we receive the borrower’s intent to proceed. The only thing we order before receiving the borrower’s intent to proceed is the credit bureau. I hope this helps! 1026.19(e)(a)(i)(A)
It depends on how your institution is evaluated. My bank’s CRA is evaluated by the Small Bank Evaluation method. We offer a second chance checking, but we have never included this for CRA credit. With the small servicer CRA, we list items that help meet the credit needs of our community. Based on other CRA evaluations, like intermediate small bank, this may be viewed as a community service targeted to low and moderate-income. This link to an FDIC’s CRA presentation https://www.fdic.gov/regulations/resources/director/presentations/cra.pdf may help.
On the land, there is a house, a manufactured home (not used), and a small outbuilding next to the manufactured home. The owner of the property is the borrower and is living in the house. The manufactured home is owned by the daughter (not on loan), and the owner/borrower of the house/land says the small outbuilding is the daughters, not his (even though the outbuilding is attached to his real property). What concerned me is since the owner/borrower says the outbuilding is not his, would it be considered a detached structure of his primary residence. The outbuilding is beside the manufactured home, not next to the house, but within a visible range.
Another question not using a lot, but father’s house and land.
On a consumer purpose loan to John and Jane Doe, that is secured by John Doe’s father, Bob Doe’s primary residence, would the loan need to be checked for HPML?
Per 1026.35(b) the loan is a higher-priced mortgage loan secured by a first lien on a consumer’s principal dwelling, but looking at the definition 1026.2(a)(11)(1) for consumer it says: Guarantors, endorsers, and sureties are not generally consumers for purposes of the regulation, but they may be entitled to rescind under certain circumstances and they may have certain rights if they are obligated on credit card plans.
We know this loan will need the right to rescind, but are we required to escrow if the loan is HPML?One thing to consider, if a Visa or Mastercard debit card is attached to the checking account, you need to review your Visa/Mastercard agreement. If a Visa/Mastercard debit card purchase/advance caused the overdraft that pulls from the line of credit, make sure your BIN number allows for this type of transaction.
I am just verifying that it does not amend any of the current requirements concerning obtaining an appraisal on HPML loans? Just asking since the new thresholds apply to residential real estate transactions (single 1-to-four family residential property).
Our bank works similar to the process Jack mentioned. The borrower sets up a checking account in their name. When the borrowers existing funds have been depleted, we structure advances based on the phase of construction completed. We have inspections conducted by independent experts, usually the appraiser. If the inspection corresponds with the funds already advanced, then additional funds are moved to the checking account. The phase of construction determines the amount of the advances. I would be concerned with the potential liability on the bank and the MLO in the structure mentioned. I agree with Jack that most borrowers are honest and if the borrower is that questionable, maybe the loan should not be approved. Hope this helps!
What about Fair Lending and UDAAP issues, since no other commercial customers have pre-payment penalties? The loan will be in a corporation’s name.
