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It sounds like the loan may be for the borrower to buy out the ex-spouse’s interest in the property. If so, it would be rescindable. See comment 1026.2(a)(24)-5
One of the banks that I worked for used BAI. At that time it offered a good number of course topics and had good tracking capabilities. I utilized it for annual compliance training and was pleased with the way we were able to document training. If I recall correctly we were able to create our training courses as well. Also, I used it to test staff members after in-person training sessions that I would conduct; I would create multiple choice tests similar to those at the end of each BAI course. This would provide evidence they were familiar with the material and it also created a list of attendees for my records. The only negative is that I believe there was one course that I noticed wasn’t updated timely. You may want to ask them what their policy is on updating the course materials.
Since Kelly was one of the presenters for this webinar I ran this by her. Please see her comments below.
If your FI is charging interest on the amount actually advanced for the time it is outstanding, Appendix D – Part I.A should be utilized, which states to calculate the estimated interest on one-half of the commitment amount outstanding at the contract interest rate for the entire construction period. If this method is utilized, the repayment schedule requirements are to omit the number and amounts of any interest payments in the payment schedule disclosure and disclose the fact that interest payments are required and the timing of such payments.
If you are calculating interest based on the entire commitment amount outstanding at the contract interest rate for the entire construction period then you should be utilizing instructions in Appendix D – Part I.B which states to assume the entire commitment amount is outstanding at the contract interest rate for the entire construction period and the repayment schedule should disclose interest payments.
Neither of these methods tell you how the “Can this amount increase after closing?” should be answered – we believe you should look to your contract language. Is the borrower’s payment increasing after consummation? Most banks will increase the interest payment each month as draws are made on the transaction; therefore, it would make sense that the answer would be Yes to the question. If so, contact Laser Pro to see what you need to do to get that disclosed as a “yes”.
Keep in mind, the LOS vendors have had numerous conversations with the CFPB so they may have received advice that we are unaware of.
I apologize we missed your question earlier.
We do recommend you consult your legal counsel on this, but here is a q&a with some good information: https://mycomplianceresource.com/forums/topic/what-do-you-consider-to-be-120-days-delinquent/
We apologize we overlooked your question. If you are placing a hold on the deposit you would need to provide a delayed availability notice.
This is a unique situation and there isn’t anything in the regulation that specifically addresses it as far as I know. Also, I am assuming the co-signer is a co-signer and not a co-borrower. With that said, I believe the taxes and insurance would be disclosed because the farm is securing the transaction and they have to be paid. It is the borrower’s responsibility to ensure they are paid (and could fall to him/her) so I would suggest disclosing them as you would if the property was owned by the borrower.
As for ATR, if the co-signer isn’t a co-borrower then you don’t need to worry about their debt, income or obligation as part of the ATR calculation. To ensure you consider the co-signer properly, you should underwrite them separately in order to know if they are beneficial to the transaction. But in the end, the borrower should meet the ATR requirements on his/her own without a co-signer – if he/she needs a co-signer it is likely he/she doesn’t meet the ATR requirements.
1026.19(f)(2) gives two categories of changes and re-delivery timeframes for closing disclosures. 1026.19(f)(2)(i) says that if any of the information on the CD becomes inaccurate then a revised CD should be provided at or before consummation. 1026.19(f)(2)(ii) says if the APR changes and exceeds the permitted tolerance, the loan program changes or a prepayment penalty is added then corrected disclosures should be provided no later than 3 business days before consummation.
Regarding revised loan estimates and resetting tolerances those rules are found in 1026.19(e)(3)(iv). If a reason for a revised loan estimate exists you may provide a corrected LE within in accordance with the requirements, but no later than the fourth business day prior to consummation. The commentary to 1026.19(e)(4)(ii) says if there are fewer than four business days between the time the revised LE disclosure is to be provided and consummation the correction charges may be reflected on the closing disclosure.
From guidance in the CFPB’s Small Entity Compliance Guide, p. 50 it appears you are able to issue revised estimates on subsequent closing disclosures:
If the event occurs after the first Closing Disclosure has been provided to the consumer (i.e., within the three-business-day waiting period before consummation), the creditor may use revised charges on the Closing Disclosure provided to the consumer at consummation, and compare those amounts to the
amounts charged for purposes of determining good faith and tolerance. (Comment 19(e)(4)(ii)-1).
Based on this, it seems if you have a changed circumstance after you have issued the initial CD you can re-disclose revised estimates on a subsequent CD.If you do decide to go this route with re-disclosing changed circumstances, there may be some risk involved. The regulation nor the commentary take the idea of redisclosing estimates as far as what the SECG does. Although the commentary does say revised estimates can be reflected on the closing disclosure it doesn’t say if is permitted beyond the initial CD, but it also doesn’t say it is prohibited either. Based on the SECG it seems possible, but the regulation doesn’t provide specific support of that comment.
If there wasn’t a rate lock in place when you issued the LE but later on you lock the rate, at that point you are required to provided a revised LE.
You only disclose “construction” for construction-only or construction-to-permanent transactions. If a construction loan is also for the purpose of purchase or refinance (as defined in 1026.37) as well as construction you would disclose the purpose as purchase or refinance, respectively.
If I am understanding your question correctly, I believe this prior Q&A will answer your question: https://mycomplianceresource.com/forums/topic/trid-2nd-mtg-dpa/.
If it is not the same issue please respond letting us know more details about the transaction.
As you mentioned, you must provide the LE within 3 business days of receiving the application. If you have an application for only a the construction loan then you would provide LE for the construction phase. In such case, since you don’t have an app for the permanent phase until the construction phase is complete, you would issue the permanent phase LE within 3 business days of receiving the app for the permanent phase (at the end of the construction phase).
If you have an application for both the construction phase and the permanent phase on the same app you must provide LE for both within 3 business days of receiving that application.
I don’t think there is any concrete answer that you will find on this so you may have differing opinions from examiners that look at this. With that in mind, I would consider it a dwelling and believe treating it as a mobile home would be fine. Keep in mind that even though it is a dwelling, it may not meet the definition of a manufactured home under Reg C.
Kristin,
I assume you are talking about this excerpt from 1026.19(f)(1)(v)-3:
3. Creditor responsibilities. If a settlement agent provides disclosures required under § 1026.19(f) in the creditor’s place, the creditor remains responsible under § 1026.19(f) for ensuring that the requirements of § 1026.19(f) have been satisfied.This is confusing, but the key phrase to consider here is “in the creditor’s place”. 1026.19(f)(4) is it clear that the settlement agent is responsible for providing the closing disclosure to the seller; therefore, it would not be deemed to be providing it in the creditor’s place since the settlement agent is the one that is responsible for its accuracy and delivery to begin with.
Reg Z 1026.1(c) states: Coverage. (1) In general, this part applies to each individual or business that offers or extends credit, other than a person excluded from coverage of this part by section 1029 of the Consumer Financial Protection Act of 2010, Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Public Law 111–203, 124 Stat. 1376, when four conditions are met:
(i) The credit is offered or extended to consumers;
(ii) The offering or extension of credit is done regularly;
(iii) The credit is subject to a finance charge or is payable by a written agreement in more than four installments; and
(iv) The credit is primarily for personal, family, or household purposes.
Does the transaction you mention meet all four criteria? I am assuming it does based on your comments?
Or perhaps they are thinking about the language that was effective on Oct. 3, 2015 in 1026.3(h) which excludes certain mortgage transactions from the integrated disclosure requirements if a whole list of requirements are met, one of which is no interest charged (I don’t believe this is the case since you said this was a pre-TRID application). If you believe this is what they are referring to then I recommend a good reading of that section of Reg Z and its commentary.
If the transaction meets the coverage requirements and does not meet one of the exclusions then I agree Reg Z would apply.
