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If you have already provided the CD and then either the APR changes, the loan product changes or you add a prepayment penalty you will need to provide corrected disclosures and ensure the customer receives the revised disclosures 3 business days before closing.
If information you provided on the CD changes but none of the three things listed above changes then you will need to provide corrected disclosures at at or before consummation – there isn’t a new waiting period.
I have never heard that a flood determination is stale after 30 days. Has someone told you this?
As for life of loan monitoring, it is different and separate from your initial requirement to determine if your collateral will be in a flood zone. Initially you will do the determination and then the flood monitoring company provides life of loan monitoring for your loans that you’ve done determinations on. The life of loan comes into play if there are any map changes, etc. that will change the status of a loan’s flood determination.
You may be thinking about rule that on using previous determinations. Here is what the OCC’s handbook says:
An institution may rely on a previous determination when it increases,
extends, renews, or purchases a loan. Prior determinations may not be used
when a bank makes a loan. However, subsequent transactions by the same
institution with respect to the same property, such as assumptions,
refinancings and junior lien loans, are considered renewals. A new
determination would not be required in those circumstances, assuming the
following conditions are met:
C The previous determination is not more than seven years old; and
C No new or revised flood map has been issued in the interim; and
C The determination was recorded on the SFHDF.You are correct. Since as of Dec. 31 of one of the “two prior calendar years” (i.e. 2014 in your case) you had assets of less than $1 billion you are considered a small lender under this part. You just need to make sure you meet the other requirements in order to utilize the exception.
The exception will no longer apply once you have had two consecutive years of assets at $1 billion or more (e.g. 2015 and 2016).
As long as you are disclosing the account opening fee in the account disclosures I don’t think it will be a UDAAP concern.
The definition of affiliate in 1026.19 refers us to 2016.32(b)(5) which then refers to 12 USC 1841 – the Bank Holding Company Act (this is different than the definition in RESPA). It tells us that:
(k) Affiliate.— For purposes of this chapter, the term “affiliate” means any company that controls, is controlled by, or is under common control with another company.
and
(a)(2) Any company has control over a bank or over any company if—
(A) the company directly or indirectly or acting through one or more other persons owns, controls, or has power to vote 25 per centum or more of any class of voting securities of the bank or company;
(B) the company controls in any manner the election of a majority of the directors or trustees of the bank or company; or
(C) the Board determines, after notice and opportunity for hearing, that the company directly or indirectly exercises a controlling influence over the management or policies of the bank or company.If the attorney has the power to vote 25% or more of voting the securities I would consider them an affiliate.
Kelly or Jack – what are your thoughts?
Could this be an abundance of caution approach to cover the disclosure requirement that they be given to each consumer with a rescindable interest? I have posted this in the Compliance One forum. Maybe you’ll get some feedback there from other users.
As the settlement agent you decide what the file number will be. You must be able to identify the transaction by it.
1026.37(o)(4)(ii) states: The percentage amounts required to be disclosed under paragraphs (b)(2) and (6), (f)(1)(i), (g)(2)(iii), (j), and (l)(3) of this section shall not be rounded and shall be disclosed up to two or three decimal places. The percentage amount required to be disclosed under paragraph (l)(2) of this section shall be disclosed up to three decimal places. If the amount is a whole number then the amount disclosed shall be truncated at the decimal point.
If the TIP rate is has three decimal places, it should be shown to three decimal places. If it only has two, then you would only show two places. If there are more than three decimal places then you would truncate it at three decimal places.Yes, you should escrow for flood on this loan since you are escrowing for other fees – I’m sorry you’re having a difficult time getting the borrower to communicate with you.
I wouldn’t recommend cancelling an escrow account after you determine flood insurance is required. It could be seen as a way to avoid compliance with the flood regulations current escrow rule.
You must comply with the current flood escrow rules until new flood escrow rules are effective on January 1, 2016. Here’s a link to the OCC’s version of the current flood regulation escrow rule (see 12 CFR 22.5): https://www.gpo.gov/fdsys/pkg/CFR-2015-title12-vol1/pdf/CFR-2015-title12-vol1-sec22-5.pdf
Also, here is a link to similar question we answered: https://mycomplianceresource.com/forums/topic/escrow-for-flood-remapping/
Reg Z Comment 23(a)(1)-4
Special rule for principal dwelling. Notwithstanding the general rule that consumers may have only one principal dwelling, when the consumer is acquiring or constructing a new principal dwelling, any loan subject to Regulation Z and secured by the equity in the consumer’s current principal dwelling (for example, a bridge loan) is subject to the right of rescission regardless of the purpose of that loan. For example, if a consumer whose principal dwelling is currently A builds B, to be occupied by the consumer upon completion of construction, a construction loan to finance B and secured by A is subject to the right of rescission. A loan secured by both A and B is, likewise, rescindable.
My opinion is that rescission would apply since that tenant house is his current principal dwelling and it will be securing the loan.
Melinda-
Congratulations – that is fantastic!! I love the name Jackson.I know you’ll be a great grandma. And I’m sure you won’t spoil him too much (wink, wink). 🙂
Wishing you lots snuggle time with Jackson.
Rich,
You are correct, as a financial institution regulated by the FDIC (federally regulated) you shouldn’t have to be concerned with continuing education requirements under the SAFE Act, specifically 12 CFR 1007, for your lenders.However, there is a general requirement in Regulation Z, 12 CFR 1026.36(f)(3)(iii) which states a loan originator organization must for each of its individual loan originator employees, who aren’t licensed under state (non-federally regulated) SAFE Act laws (12 CFR 1008), provide periodic training covering Federal and State law requirements that apply to the individual loan originator’s loan origination activities.
Since your FI is Federally regulated and there are no continuing education requirements for your LOs Reg Z requires that you provide them with periodic training on state and Federal law that apply to their loan origination duties. There are no specific content or timing requirements, but we like to use the SAFE Act state-licensing requirements as a guide.
The SAFE Act requires that state-licensed MLOs complete 8 hours of NMLS approved
continuing education which include the following (there are separate pre-licensing training requirements):
3 hours of Federal law and regulations;
2 hours of ethics that shall include instruction on fraud, consumer protection, and fair lending issues;
2 hours of training related to lending standards for the nontraditional mortgage product market; and
1 hour of undefined instruction on mortgage origination.Jack covered Reg Z LO education on April 3 and 4, 2014. You also see reference to the amount of hours on our weekly agendas. The goal hours are in reference to the SAFE Act state-licensing education requirements (pre-licensing/continuing education).
If you force-place is there a 30 day wait period? See the article below.
https://www.consumercomplianceoutlook.org/2015/first-quarter/compliance-update/
If you will also have a 30 day wait period then I see no benefit, but if you will not have a wait period then you could force-place in order to have adequate flood coverage.
