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First of all, I recommend you contact an attorney for guidance on what is required for privacy of images.
With that said, a signed release is a safeguard against potential issues. If you do not have a signed release and you post photos of individuals without their knowledge or consent, at the least you open yourself up to possible complaints and requests for photos to be removed from your page. A strong set of procedures at implementation will help avoid issues in the long run.
Many financial institutions do not post images of individuals at all or place strong restrictions on what they do post. A few things to consider:
1) Some financial institutions post photos of employees. Other’s feel that may be a security concern.
2) Depending on the circumstances, posting photos of bank events may indicate that the person in the photo is your customer.
3) The Children’s Online Privacy Protection Act (COPPA) places restriction on what you can collect, including photos, from children under 13 without their parents consent. Facebook has rules and procedures in place to comply with COPPA as well that include allowing parents to request their child’s (under 13) photo be removed.1. Yes, the new rules apply to returns required to be made, and statements required
to be furnished, after December 31, 2016.2. You are required to send/file 1098s when you receive $600 or more of
mortgage interest, from an individual, on any one mortgage during the calendar year. A mortgage is any obligation secured by real property. And real property is land and generally anything built on it, growing on it, or attached to the land.I’d encourage you to consult an attorney or CPA for specific information on your FI’s requirements.
I agree that you would report it as not owner occupied since the property to which the loan is related is rental property, even though the loan is also secured by the principal dwelling.
I’ve also asked Jack to weigh in with his opinion.
There are requirements for commission income in Appendix Q, but since you are a small creditor you are not required to comply with those. However, you may use it as a guide to help fill in some gaps in if you choose. Generally, Appendix Q says the commission income earned for more than 2 years and between more than 1-2 years is ok with proper documentation, but less than one year is generally not acceptable. He would obviously have tax returns but my concern is his break in employment.
The ATR rules do not detail specific requirements like Appendix Q for commission income, so do have more flexibility in what you require. If you have internal standards you will need to follow those.
Another option may be found in comment 43(c)(2)(i)-3, which says income is reasonably expected if there is a letter from a soon to be employer indicating employment and expected salary. If the employer could offer an expected baseline income that would work.
I would consider this a counteroffer because the applicant has requested an additional amount based on the same rate, but you are not able to offer the new amount at that rate. As a result, you will be countering their request with a higher rate. I believe you would also have a changed circumstance (borrower requested change) and a new LE would be required. Note if the applicant does not accept the counteroffer then a adverse action would be required if it was not included with the counteroffer.
The Higher Priced Mortgage Loan (HPML) escrow requirement only applies to a loan secured by a first lien on the borrower’s principal dwelling. I assume these are non-owner occupied rental properties so they will not be the consumer’s principal dwelling. If that is the case, the HPML escrow requirement would not apply. If this is a business purpose loan, Reg Z will not apply – see section 1026.3 to help you determine if you have a transaction that is exempt from Reg Z.
Use of the checklist is not a requirement, but we do believe it is a best practice. When used consistently, it is evidence that you have verified that each loan is or is not covered under the MLA. It is also built into the procedures we distributed back in April, so if you decide not to use the checklist for all transactions you will need to adjust those procedures as well. Also, if you choose not to use the checklist I recommend that you have an alternative method for documenting your file to show that the loan is not covered under the MLA and why.
We agree you should amend the documents in your control. The MERS manual has a section on quality assurance procedures (beginning on p. 30) and contact information for a helpline that might be helpful to you: https://www.mersinc.org/join-mers-docman/1036-mers-system-procedures-draft/file.
The jumbo loan threshold will be based on the conforming loan limit in effect for the area where the property is located. In most of the country this will increase from $417,000 to $424,100 on Jan. 1, 2017. However, in certain high-cost areas the jumbo loan threshold will be higher.
Comment 1026.35(a)(1)-3 states:
“Threshold for “jumbo” loans. Section 1026.35(a)(1)(ii) provides a separate threshold for determining whether a transaction is a higher-priced mortgage loan subject to § 1026.35 when the principal balance exceeds the limit in effect as of the date the transaction’s rate is set for the maximum principal obligation eligible for purchase by Freddie Mac (a “jumbo” loan). The Federal Housing Finance Agency (FHFA) establishes and adjusts the maximum principal obligation pursuant to rules under 12 U.S.C. 1454(a)(2) and other provisions of Federal law. Adjustments to the maximum principal obligation made by FHFA apply in determining whether a mortgage loan is a “jumbo” loan to which the separate coverage threshold in § 1026.35(a)(1)(ii) applies.”
The FHFA has information on the conforming loan limits here: https://www.fhfa.gov/DataTools/Downloads/pages/conforming-loan-limits.aspx.
“It would appear that we cannot use the funds for anything or than intended or they must be returned to the consumer.”
I agree with that statement. Reg X doesn’t say that the funds can be applied to the balance. It does say the servicer may retain the surplus in the escrow account pursuant to the terms of the federally related mortgage loan documents. Check your note/contract to determine if any other action is permitted.
Reg X 1024.17(f)(2) discusses surpluses.
If fee was disclosed separately as an inspection fee I agree with your assessment. It is too late to issue a revised LE reflecting the fee, but you would be able to show the revised fee on the CD.
For non-qm balloon loans you would need to consider the 8 ATR factors, which includes special payment calculation instructions for balloon loans. You can find those in 1026.43(c)(5). The commentary lays out the requirements. Here’s a link to the reg and commentary: https://www.bankersonline.com/regulations/12-1026-043#c.
“For higher-priced covered transactions with a balloon payment, the creditor must consider the consumer’s ability to repay the loan based on the payment schedule under the terms of the legal obligation, including any required balloon payment. For loans with a balloon payment that are not higher-priced covered transactions, the creditor should use the maximum payment scheduled during the first five years of the loan following the date on which the first regular periodic payment will be due. ”
Yes, you would still need to disclose the costs even if you are not escrowing for them. See 1026.37(c)(4) and 1026.38(c).
Here’s a link to the eregulation: https://www.consumerfinance.gov/eregulations/1026.
If you will be doing the permanent phase, we recommend that you underwrite/verify ATR for that phase before consummation of the construction loan, just as you are doing, so you know if you will be able to make the loan. We also recommend that prior to consummation you verify the information you relied on for underwriting/to determine ATR is still accurate and has not changed.
Yes, it would be included in the points and fees calculation unless one of the exceptions in 1026.32(b)(1)(E) or (F) apply. Here’s a link to that section of Reg Z that houses those exceptions: https://www.gpo.gov/fdsys/pkg/CFR-2016-title12-vol9/pdf/CFR-2016-title12-vol9-sec1026-32.pdf.
