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Thank you!
I have another question relating to this. What section of the Loan Estimate should this fee be disclosed?
We have taken the approach that we will not provide the realtor a copy of the closing disclosure. If the borrower wants the realtor to have, they can provide a copy themselves.
We have done a few construction-perm loans and this is what we have done.
1) We have had one need to extend the construction phase and had been told by legal that we could accomplish this through a modification. (Please don’t take this as advice as to what to do, it’s just what we had been told we could).
2) We do not escrow at this time.
3) Have not had this one, but we would probably do a modification.
4) We will disclose as one set of disclosures. I don’t know which would be best, but it’s what we decided to do.That’s correct, 1026.37(g)(4) will have you put the fee in section H and it will have no tolerance limitations since it is not a required service.
My understanding is if the inspection is known prior to the issuance of the LE, an estimate must be provided. I do not believe a provider needs to be added to the list since it is not required by your bank (but maybe someone will chime in and confirm that).
1026.19(e)(3)(iii) Commentary:
3.Good faith requirement for non-required services chosen by the consumer.
Differences between the amounts of estimated charges for services not required by the creditor disclosed pursuant to § 1026.19(e)(1)(i) and the amounts of such charges paid by or imposed on the consumer do not constitute a lack of good faith, so long as the original estimated charge, or lack of an estimated charge for a particular service, was based on the best information reasonably available to the creditor at the time the disclosure was provided. For example, if the consumer informs the creditor that the consumer will obtain a type of inspection not required by the creditor, the creditor must include the charge for that item in the disclosures provided pursuant to § 1026.19(e)(1)(i), but the actual amount of the inspection fee need not be compared to the original estimate for the inspection fee to perform the good faith analysis required by § 1026.19(e)(3)(iii). The original estimated charge, or lack of an estimated charge for a particular service, complies with § 1026.19(e)(3)(iii) if it is made based on the best information reasonably available to the creditor at the time that the estimate was provided. But, for example, if the subject property is located in a jurisdiction where consumers are customarily represented at closing by their own attorney, even though it is not a requirement, and the creditor fails to include a fee for the consumer’s attorney, or includes an unreasonably low estimate for such fee, on the original estimates provided pursuant to § 1026.19(e)(1)(i), then the creditor’s failure to disclose, or under-estimation, does not comply with § 1026.19(e)(3)(iii).Generally we treat these as pre-qualifications and do not report them on HMDA. We do not have a formal pre-approval program. We have in our HMDA procedures that the 6 items from RESPA make up our application for HMDA purposes.
We used to offer them, but do not anymore. We stopped offering them before I was in compliance, so I do not know the details to share. I know this was one product heavily scrutinized by examiners, which was probably the reason we stopped offering it.
Our system is set up this way. We keep documentation (tracking history) in the file to show when the disclosures were first available to the consumer. We have had one auditor question this originally, but was fine after showing the history of when the disclosures were initially available to the customer.
I am looking for some feedback on “no-cost” HELOC programs. This is the first time we are doing something like this and would like to run it as a special.
The bank is wanting to pay closing costs up to $1500 on HELOCs, but require the line be drawn a certain $ amount for 18 months. Does anyone have HELOCs set this way? The amount required to be drawn would be tiered based on the loan amount.
How do we disclose the third party fees on the initial disclosure? Do we leave our original estimates or do we say $0- $xxxx, since we will be paying the majority (if not all) of the fees?
I would greatly appreciate any feedback on this type of HELOC special.
The lien would still be good. Our loan agreements state the loan would be in default, so we would apply the CD to the loan prior to anything going to a POD.
