Forum Replies Created
-
Posts
-
We did a 1 year bridge loan secured by a 2nd mortgage on the borrowers current home (not HMDA). The proceeds were used for the purchase of a new home being financed through secondary market. Secondary market underwriters requested the terms of our loan so a copy of the note was sent to them. The underwriters sent us a condition that our loan had to be for at least 5 years. Since our bridge loan had already closed and we did not want to hold up the secondary market loan closing we did an extension on our loan to extend the maturity date out to 5 years (underwriters were fine with this). I do not think the extension is HMDA reportable since we did not replace and satisfy a mortgage. However, we have a difference of opinion because some of us feel since the loan now has a 5 year term and not really a “bridge” loan it should be reported as HMDA.
As Jack suggested I contacted the CFPB on 2/10/2014 to ask about a balloon loan that has matured if we still have wait 120 days before we start foreclosure proceedings. I received a phone call on 3/7/2014. The person I spoke with is an attorney for the regulations and he informed me that his answer is his opinion. He told me that we would have to wait the 120 days before staring foreclosure proceedings if the loan had matured/ballooned. I also gave him a scenario that the loan had not preformed as agreed, that it would not cash flow (ATR) and would not be a QM and again he told me we would have to wait the 120 days.
So your opinion is that on a business construction loan (loan in the name of the builder’s company) that we need to give the appraisal to the builder 3 days prior to closing? This is the way I am reading it but there is a difference of opinion with the loan officers.
We want to know this as well. And add to the question… what if the loan is a HELOC that has matured but the consumer is still making the interest payments. Can the bank refuse the payment in order to join the 1st lienholder in foreclosure?
One more question… What if the loan has matured do we still have to wait 120 days before starting the foreclosure proceedings?
An Additional question regarding foreclosure and the 120 day rule…. Our bank attorney is asking this question “Can a bank refuse a monthly payment on a loan more than one month past due to prevent a debtor from avoiding going 120 days past due but at the same time never getting the loan current and therefore being on the past due list until the loan matures?” In his research he has found many consumer and bankruptcy websites already advising debtors not to worry about late payments so long as they don’t go 120 days past due. His fear is this could turn into a major problem and past dues could skyrocket.
Last question on this topic… hopefully 🙂
We have a borrower who has a land contract and the parents (who are not on the land contract) are going to buy the property for their children who will be living in the home. The children will not be on the loan. The children will be signing the Deed along with the seller over to the parents. I say there is not rescission because the parents are not living in the house. Is this correct?So if the purchase contact states that the rents already paid will go towards the purchase of the property RoR applies. But if the purchase contract does not state anything about the rent money going towards the purchase then RoR would not apply.
Correct?And where did you find the Staff Interpretations? I have searched using 1026.2 and 226.2 and it does not come up for me.
Our understanding is:
1. For a Non-QM HPCT (HPML) loan use the fully indexed rate
2. For a QM HPCT (HPML) loan use the maximum rate that could apply during the first 5 years after the date of the first payment (so on the 61st month)
3. For a QM Balloon HPCT (HPML) loan have to use the balloon payment which does not factor in the rateWe have gone back and read the commentary for 1026.19(b)(2) 1 & 2 and we are still confused. We have a Rate Sheet Matrix that will allow a decrease or increase of the rate. Since we do not need a separate disclosure for each rate then what rate would we use in the ARM Disclosure? Would we use the highest rate possible after adjustments per our Rate Sheet Matrix?
We are so careful when it comes to Reg O so we research every piece of information we can find….We are looking at CMG materials from Nov. 2012 which had a letter from FDIC that had a paragraph that said:
Federal Reserve Board Regulation O is prospective in nature. It prohibits extensions of credit over the statutory ceiling to persons that are subject thereto. It does not prohibit the maintenance of loans in excess of that ceiling if the loans when made were extended to an individual who was not subject to the loan ceiling, i.e., a director or other person who is not an executive officer1 or principal shareholder. In short, after-acquired status will not give rise to a Regulation O violation,2 nor does section 215.6 apply in such circumstances.
I guess this is throwing us off because we can’t find anything in the Reg that mentions maintence of loans. If we understand correctly, an extension of credit means new money or any extension/modification of an existing loan. So if a new board member requests to modify one of his existing loans then we would need to count the loan against him as Reg O becasue we are extending credit regardless of what type of modification (i.e. rate modification).
