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Your specific situation isn’t addressed in the regulation or commentary. 1026.20(d) does state:
Initial rate adjustment. The creditor, assignee, or servicer of an adjustable-rate mortgage shall provide consumers with disclosures, as described in this paragraph (d), in connection with the initial interest rate adjustment pursuant to the loan contract.It seems to me your initial rate adjustment per your contract has already passed before the effective date and as a result you wouldn’t need to send the 1026.20(d) notice.
Response by jholzknecht:
Let me add to Robin’s answer. The initial rate adjustment is an estimate. The estimate is sent 210 to 240 days prior to the first scheduled payment at a new level. At the time you prepare the initial notice you have no idea if the rate will actually change or not, but you provide the estimate anyway.Jack’s Compliance Resource offers many products including policy and procedure updates, Director/Senior Manager Updates, Training Manuals, Flowcharts, Checklists and more. To see our Reg Z products click here:
Reg Z MarketplaceCheck out this post:
The commentary has good examples: https://www.bankersonline.com/regs/12-1026/12-1026-043.html#c
Jack’s Compliance Resource offers many products including policy and procedure updates, Director/Senior Manager Updates, Training Manuals, Flowcharts, Checklists and more. To see our Reg Z products click here:
Reg Z MarketplaceYes, the timing requirements still apply.
1026.35(c)(6) Copy of appraisals. (i) In general. Except as provided in paragraph (c)(2) of this section, a creditor shall provide to the consumer a copy of any written appraisal performed in connection with a higher-priced mortgage loan pursuant to paragraphs (c)(3) and (c)(4) of this section.
(ii) Timing. A creditor shall provide to the consumer a copy of each written appraisal pursuant to paragraph (c)(6)(i) of this section:
(A) No later than three business days prior to consummation of the loan; or
(B) In the case of a loan that is not consummated, no later than 30 days after the creditor determines that the loan will not be consummated.
Jack’s Compliance Resource offers many products including policy and procedure updates, Director/Senior Manager Updates, Training Manuals, Flowcharts, Checklists and more. To see our Reg Z products click here:
Reg Z MarketplaceI agree with your interpretation. Your contract should say what your look back period is.
1026.20(c)(2): Timing and content. Except as otherwise provided in paragraph (c)(2) of this section, the disclosures required by this paragraph (c) shall be provided to consumers at least 60, but no more than 120, days before the first payment at the adjusted level is due. The disclosures shall be provided to consumers at least 25, but no more than 120, days before the first payment at the adjusted level is due for ARMs with uniformly scheduled interest rate adjustments occurring every 60 days or more frequently and for ARMs originated prior to January 10, 2015 in which the loan contract requires the adjusted interest rate and payment to be calculated based on the index figure available as of a date that is less than 45 days prior to the adjustment date. The disclosures shall be provided to consumers as soon as practicable, but not less than 25 days before the first payment at the adjusted level is due, for the first adjustment to an ARM if it occurs within 60 days of consummation and the new interest rate disclosed at consummation pursuant to § 1026.20(d) was an estimate.
I removed the wrong post but forgot to go back and answer your question…
Both of these (items in 1026.4(c)(7)) are exempt from points and fees if:
(A) The charge is reasonable;
(B) The creditor receives no direct or indirect compensation in connection with the charge; and
(C) The charge is not paid to an affiliate of the creditor.
I agree the sample seems a little disconnected from the requirements, but the regulation also states it must be substantially similar. Because of this I recommend using the sample format.
1026.20(d)(3): 3) Format. (i) Except for the disclosures required by paragraph (d)(2)(i) of this section, the disclosures required by this paragraph (d) shall be provided in the form of a table and in the same order as, and with headings and format substantially similar to, forms H-4(D)(3) and (4) in appendix H to this part;
Yes, the timing requirements still apply.
1026.35(c)(6) Copy of appraisals. (i) In general. Except as provided in paragraph (c)(2) of this section, a creditor shall provide to the consumer a copy of any written appraisal performed in connection with a higher-priced mortgage loan pursuant to paragraphs (c)(3) and (c)(4) of this section.
(ii) Timing. A creditor shall provide to the consumer a copy of each written appraisal pursuant to paragraph (c)(6)(i) of this section:
(A) No later than three business days prior to consummation of the loan; or
(B) In the case of a loan that is not consummated, no later than 30 days after the creditor determines that the loan will not be consummated.
Check out this post:
The commentary has good examples: https://www.bankersonline.com/regs/12-1026/12-1026-043.html#c
I believe you’re talking about the requirements in 1026.34 – those are applicable to high cost mortgages. There is also prohibition on pyramiding of late fees in
1026.36From your information, it seems Bank A is acting as a mortgage broker for loans that Bank B is closing/creditor.
Your specific situation isn’t addressed in the regulation or commentary. 1026.20(d) does state:
Initial rate adjustment. The creditor, assignee, or servicer of an adjustable-rate mortgage shall provide consumers with disclosures, as described in this paragraph (d), in connection with the initial interest rate adjustment pursuant to the loan contract.It seems to me your initial rate adjustment per your contract has already passed before the effective date and as a result you wouldn’t need to send the 1026.20(d) notice.
1026.36(g)(1)(ii) states:
Name and NMLSR ID on loan documents. (1) For a consumer credit transaction secured by a dwelling, a loan originator organization must include on the loan documents described in paragraph (g)(2) of this section, whenever each such loan document is provided to a consumer or presented to a consumer for signature, as applicable:(i) Its name and NMLSR ID, if the NMLSR has provided it an NMLSR ID; and
(ii) The name of the individual loan originator (as the name appears in the NMLSR) with primary responsibility for the origination and, if the NMLSR has provided such person an NMLSR ID, that NMLSR ID.
There isn’t anything in the preamble or the commentary that discusses legal names vs. aliases. I think the conservative approach would be to use the name as it is listed in the NMLS, but if the MLO goes by an alias that is included in their registered information I think you could make the argument for using that as well.
1026.35(c)(4)(vii): You do not have to order an additional appraisal for a covered HPML used to acquire the property from a person who acquired title on the property via foreclosure, deed-in-lieu of foreclosure, or other similar judicial or nonjudicial procedure through that person’s exercise of rights as the holder of a defaulted loan.
If I’m understanding your question and examples correctly, this exemption would apply to the the purchase of the foreclosed property from the bank (since the bank would be the person who acquired title via foreclosure), but would not apply when that purchaser resells the property.
Note: Business purpose loans are not covered by Reg Z and, therefore, the HPML appraisal rules do not apply to business purpose loans.
It isn’t specifically required under 1026.36 but you also need to consider the SAFE Act requirements. Here’s a prior post on this topic:
