[rcooper]

Allowing voluntary escrows would not preclude you from meeting and utilizing the exemption.

[rcooper]

To further clarify:
The mortgage amount will not matter. You will still use the same criteria meaning, the amount of insurance must be at least equal to the lesser of:
• The outstanding principal balance of the designated loan; • The maximum limit of coverage available for the particular type of property under the Act; • The value of the improvements (building or mobile home) and any personal property that secures a loan and not the land itself. [Insurable Value or Replacement Cost Value]

I agree that for a residential condo unit the max would be $250,000 coverage. What was the reason for determining $500,000 was the max available for the condo – is it a non-residential unit?

This might be helpful:
https://www.fema.gov/media-library-data/1523307300588-4cf9726b2eb04c3471a3e9d37a58fa6a/06_condo_508_apr2018.pdf

[rcooper]

Is this an open-end line of credit? If so, the outstanding balance could increase at any time and, as a result, you would need to use the maximum line amounts in the calculation for coverage. If it is not an open-end line and you increase the loan amount this would be a MIRE event.

Let me know if I’ve misunderstood.

[rcooper]

I apologize we have overlooked your question until now. We will review the specific materials you referenced and get back to you. Thanks for your patience!

[rcooper]

I have a member who is willing to share her checklist. If you email me (robin@mycomplianceresource.com) I can put you in contact with her.

[rcooper]

Intent to apply jointly needs to be noted at the time of application. It seems you’ll have an application before the co- applicant comes back in to sign the app. I wouldn’t wait for the application to be signed. I would ask the LO to obtain confirmation and document it at application.

[rcooper]

What you’ve described is a practice that seems to have been historically acceptable. You could also call, email, fax, etc. the applicant that isn’t present to obtain verification.

1002.7(d) says:
…The method used to establish intent must be distinct from the means used by individuals to affirm the accuracy of information. For example, signatures on a joint financial statement affirming the veracity of information are not sufficient to establish intent to apply for joint credit.

Based on the commentary and info above from Kansas City Fed, determine what method you are comfortable using to establish joint intent. If the applicant isn’t present, my personal preference, in order to avoid any issues of the joint applicant not knowing they were being included on the app, is to confirm with each applicant rather than allow one applicant to confirm for both.

[rcooper]

Kansas City Federal Reserve, January 2018, https://www.kansascityfed.org/en/banking/fedconnections/archive/ensuring%20compliance%20witih%20reg%20b%201-3-18

Bankers have some options on how to determine an individual’s intent to be a joint applicant. Remember that the determination must be made contemporaneously with the application for credit and properly documented in the credit file. This can be accomplished by requiring the use of written applications for all credit transactions, with a separate disclosure on which the applicants overtly affirm their intention to apply for joint credit. Refer to the sample form in the Appendix to Regulation B. Another option is to provide applicants, at the time of the application, with a joint intent disclosure on which they may indicate their intention to apply for joint credit. Finally, absent written applications or applicant acknowledgement on other joint intent disclosures, the loan officer may simply ask the applicants about their intentions and document it via a note to the credit file. By dating the loan officer’s note, banks may be able to document that the applicants’ intentions were determined contemporaneously with the application for the credit.

[rcooper]

Based on the way the regulation is worded (e.g. extending credit to executive officers in the present/future rather than past), I believe this will generally apply to loans made once they become an Executive Officer, not to loans prior to becoming and Executive Officer.

This supports that opinion: https://www.occ.gov/topics/licensing/interpretations-and-actions/2008/int1096.pdf. You can consult your regulator to confirm their stance.

[rcooper]

See our lending thresholds chart in our Ultimate Compliance Resource available here: https://mycomplianceresource.com/lending-thresholds/. If you don’t find what you’re looking for let us know.

Thanks!

[rcooper]

Hi Trish,
I can’t find anything in the FCRA or regulations that specifically spells out a requirement to include the reason code and there isn’t an indication of the code in the sample form in Reg B. It’s been a while since I’ve dealt with this so it could be an industry standard. Or could you be thinking of the information that automatically floods into the risk based pricing exception notice from the CRA? I don’t see a problem with including it but I don’t believe it is required – if it is I need to see a source.

Let’s see if we can get some feedback from others.

[rcooper]

Oh, ok – I understand your question better now.

19(f)(4) Transactions involving a seller.
19(f)(4)(i) Provision to seller.
1. Requirement. Section 1026.19(f)(4)(i) provides that, in a closed-end consumer credit transaction secured by real property that involves a seller, other than a reverse mortgage subject to § 1026.33, the settlement agent shall provide the seller with the disclosures in § 1026.38 that relate to the seller’s transaction reflecting the actual terms of the seller’s transaction. The settlement agent complies with this provision by providing a copy of the Closing Disclosure provided to the consumer, if it also contains the information under § 1026.38 relating to the seller’s transaction, or alternatively providing the disclosures under § 1026.38(t)(5)(v) or (vi), as applicable.

Based on being able to provide a copy of what is provided to the consumer I think you should be fine and their signature at consummation would be sufficient to show compliance (again this would need to be spelled out in procedures). If a different disclosure is provided to the seller then you should be able to create a different issued date as this would not be a “copy”. You can talk to your forms provider to determine their system capabilities and various functions to make this work.

[rcooper]

38(a)(3)(i) Date issued.
1. Applicable date. For general guidance on identifying the date issued for the Closing Disclosure, see the commentary to § 1026.37(a)(4).

37(a)(4) Date issued.
1. Applicable date. Section 1026.37(a)(4) requires disclosure of the date the creditor mails or delivers the Loan Estimate to the consumer. The creditor’s method of delivery does not affect the date issued. For example, if the creditor hand delivers the Loan Estimate to the consumer on August 14, or if the creditor places the Loan Estimate in the mail on August 14, the date disclosed under § 1026.37(a)(4) is August 14.

2. Mortgage broker as loan originator. In transactions involving a mortgage broker, the date disclosed is the date the mortgage broker mails or delivers the Loan Estimate to the consumer, because pursuant to § 1026.19(e)(1)(ii), the mortgage broker is required to comply with all relevant requirements of § 1026.19(e).

If you have a change that requires a new disclosure then you would issue a new disclosure and put the new issuance date; otherwise the date would be as stated above. Document when the document is delivered to show compliance and you should be fine. You might also note “closing copy” on the disclosure provided at closing to indicate why the dates may not seem to comply. Either way, make sure your procedures clearly state your process and compliance with the delivery requirements are documented and you should be fine.

[rcooper]

Yes you can. The SECG state:
If the amounts paid by the consumer at closing exceed the amounts disclosed by more than the applicable tolerance threshold, the creditor must provide a corrected Closing Disclosure and provide a cure for a tolerance violation no later than 60 calendar days after consummation. The refund need not be in the form of a cash refund to the consumer.

Creditors can cure tolerance violations in many ways. For example, a cure for a tolerance violation can be provided by:
 Providing a refund directly to the consumer;
 Providing a principal reduction;
 Providing lender credits, either specific or general, to the consumer.

You will need to follow the instructions outlined in 38-4 for how to disclose the principal reduction on the CD you will send to the borrower.

[rcooper]

KRS 286.3-180(6) (http://www.lrc.ky.gov/statutes/statute.aspx?id=14547) discusses giving 90 days notice, to the Commissioner of FI, if any operation of the branch is discontinued. I did not see a definition for operation and I’m not sure how this is interpreted or enforced by the KDFI. You could take the safe approach and provide the 90 days notice or contact them to find out what is required.

You would also want to consider how it could affect CRA and document the Change/reduction in hours/services in your public file.

228.43(a)
(5) A list of services (including hours of operation, available loan and deposit products, and transaction fees) generally offered at the bank’s branches and descriptions of material differences in the availability or cost of services at particular branches, if any. At its option, a bank may include information regarding the availability of alternative systems for delivering retail banking services (e.g., ATMs, ATMs not owned or operated by or exclusively for the bank, banking by telephone or computer, loan production offices, and bank-at-work or bank-by-mail programs);

[Author]

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