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The monitoring information should be collected as part of the application process so if the application continues to be utilized even though the purpose has changed, I would not remove the monitoring information. I would document on the application or in the loan file the original purpose for the app. and why the monitoring information was collected. As long as the monitoring information is not utilized in a discriminatory manner and the file is well documented there should be no issues.
The CFPB is supposed to release a check digit generator tool on their website; however, it has not yet been released. Likely will be released sometime in the 4th quarter. All tools that the CFPB releases can be found on the HMDA filers page – https://www.consumerfinance.gov/data-research/hmda/for-filers
There has not been information released about a new rate spread calculator; we typically discuss in the HMDA Part 2 webinar the fact that we anticipate that the FFIEC will be updating the rate spread calculator. The CFPB has not stated that a new calculator will be released.
The 2018 hierarchy will be:
1. Purchase
2. Refinance or Cash out Refinance
3. Home Improvement
4. OtherI am going to assume you are referring to the HMDA rules that go into effect on 1/1/18.
If you have a transaction secured by a manufactured home community you do have a dwelling. Even if you are taking the manufactured home community but no individual units, it is still considered to be a dwelling under the definition of dwelling (1003.2(f)-2).
There is a particular data field that requires you to report the number of dwelling units. In that field you would report the number of sites that secure the loan and are available for occupancy regardless of whether the sites are currently occupied or have manufactured homes sitting on them. So if a 20 pad manufactured home park is taken as collateral, you would report all 20 units even if only 10 are occupied with a manufactured home on the site (1003.4(a)(31)-2).
Under current HMDA rules:
2. Property location–multiple properties (home purchase/refinance of home purchase). For a home purchase loan, an institution reports the property taken as security. If an institution takes more than one property as security, the institution reports the location of the property being purchased if there is just one. If the loan is to purchase multiple properties and is secured by multiple properties, the institution reports the location of one of the properties or reports the loan using multiple entries on its HMDA/LAR (with unique identifiers) and allocating the loan amount among the properties.Under new HMDA rules effective 1/1/18: You report the property that is securing the loan, if multiple properties secure the loan you pick one to report on in a single LAR entry.
If you are not subject to HMDA and are not an OCC regulated financial institution that is regulated by Part 27 under the Fair Housing Act, then you have to collect monitoring information under Regulation B – ECOA requirements, when applicable.
Regulation B monitoring requirements include collecting Ethnicity, Race, Sex, Marital Status, and Age when the creditor receives an application from a natural person and the credit is primarily for the purchase or refinance of a dwelling occupied or to be occupied by the applicant as their principal residence. The extension of credit will be secured by the dwelling.
If you are not subject to HMDA or Part 27, you must collect under Reg. B requirements or it will be a violation of ECOA.
The $250,000 requirement is the maximum cap on the amount of insurance available under the NFIP for a residential structure. An NFIP policy will not cover an amount exceeding the insurable value of the structure. The borrower may purchase a private policy for greater than the $250,000 but the private policy would need to be compared to an NFIP policy to ensure that it is comparable to the policy under the NFIP (see Flood QA #63 below).
XI. Private Insurance Policies
63. May a lender rely on a private insurance policy to meet its obligation to ensure that its designated loans are covered by an adequate amount of flood insurance?
Answer: It depends. A private insurance policy may be an adequate substitute for NFIP insurance if it meets the criteria set forth by FEMA in its Mandatory Purchase of Flood Insurance Guidelines. Similarly, a private insurance policy may be used to supplement NFIP insurance for designated loans where the property is underinsured if it meets the criteria set forth by FEMA in its Mandatory Purchase of Flood Insurance Guidelines. FEMA states that, to the extent that a private policy differs from the NFIP Standard Flood Insurance Policy, the differences should be carefully examined before the policy is accepted as sufficient protection under the law. FEMA also states that the suitability of private policies need only be considered when the mandatory purchase requirement applies.The Legal Entity Identifier is utilized as an identifier for the financial institution on the HMDA LAR as well as built into the Universal Loan Identifier (ULI) that is utilized for each loan or application placed on the LAR. If the financial institution is exempt there is no reason to register for an LEI. If; however, the bank does become a covered financial institution, you will need to register for the LEI. It typically takes 3 business days to receive.
If you are exempt from reporting open-end LOCs due to not meeting the 500 threshold then you do not have to collect on any of the data fields associated with those types of loans. You may continue to report on them if you choose to under the new “optional” reporting requirements in the final rules (Paragraph 3(c)(12)-2) but if you do report you must report all such applications, origination’s, or purchases of open-end lines of credit. As far as collecting GMI, you don’t have to collect for it on these types of transactions since you are not reporting; however, if collecting GMI for underwriting purposes that would be acceptable without having to report.
Under the final amendments to HMDA released on 8/24/17, this specific issue is addressed. See pages 195-196 in the HMDA final amendments – Application approved but not accepted: “For transactions subject to Regulation C for which no disclosures under Regulation Z are required, a financial institution complies with 1003.4(a)(12)(i) by reporting NA.
In this scenario, you need to determine first, is it a withdrawal or is it approved but not accepted. Did you communicate the “approval” to the customer prior to withdrawal by the customer? If it was not communicated to the customer then rate spread would be reported as “NA” because the transaction would be considered withdrawn. If the approval was communicated at application prior to the customer withdrawing, then the bank will have to calculate the rate spread which will require a calculation of an APR. If an APR isn’t calculated until disclosures are developed, then at least enough data entry would have to be completed to get an APR to calculate a rate spread. A time consuming task just to report a rate spread.
I think you are definitely on the right track. The LE for the both the first and the simultaneous second would show an Estimated Total Payoff and Payments of the full loan amount for the applicable loan as both loans are going toward paying off in full a different lien.
The Loan Estimate reflects those fees that are required to be paid by your consumer. If at the time of preparing the Loan Estimate you expect that the fee will not be paid by or imposed upon the consumer, omit it from the Loan Estimate. If not, it could be questioned that the Loan Estimate was not provided in “good faith”.
The requirements related to advertising/promoting non-deposit investment related products are quite strict. At a minimum any advertisement or disclosure must include the three statements:
* are not insured by the FDIC;
* are not deposits or other obligations of the institution and are not guaranteed by the institution; and,
* are subject to investment risks, including possible loss of the principal invested.In addition, the advertisement or promotional materials must not suggest or convey any inaccurate or misleading impression about the nature of the product or its lack of FDIC insurance.
My biggest concern about a teller handing out a brochure, even with proper disclosures as mentioned above is the fact that the teller likely has an “FDIC Insured” sign at his/her teller window and there are specific requirements that prohibit that in the Interagency Statement on Retail Sales of Nondeposit Investment Products, specifically:
“To minimize customer confusion with deposit products, sales or recommendations of non-deposit investment products on the premises of a depository institution should be conducted in a physical location distinct from the area where retail deposits are taken. Signs or other means should be used to distinguish the investment sales area from the retail deposit-taking area of the institution. However, in the limited situation where physical considerations prevent sales of non-deposit products from being conducted in a distinct area, the institution has a heightened responsibility to ensure appropriate measures are in place to minimize customer confusion.”While the brochure has proper disclosure, it may be considered by some examiners as a recommendation of a nondeposit investment product in an area where retail deposits are accepted. I think the same argument would hold true if the televisions in the branch are behind or near the teller window or deposit taking area of the branch where FDIC insured signs were housed.
While these guidelines could be interpreted differently, the safest course of action is to ensure these two areas of the financial institution remain separate.
In the TRID proposal that has yet to be finalized, it states, “Once a consumer has indicated an intent to proceed with the transaction, the date and time at which estimated closing costs expire would be left blank on revised Loan Estimates, if any.” While this is currently only stated in the proposal, it appears that this was the intent when the final rule was written. We anticipate the proposed rule to be finalized sometime mid-2017.
