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HPML and 1026.35 does still exist. There are different thresholds that qualify a loan as either a higher priced mortgage loan (HPML, 1026.35), a high cost mortgage loan (HCML/HOEPA, 1026.32) or a higher priced covered transaction (HPCT, 1026.43). These prior posts address the differences:
If the property securing the loan is in an SFHA but the community in which the collateral is located does not participate in the National Flood Insurance Program then flood insurance isn’t required, but you still need to send the Notice of Special Flood Hazards and document receipt – many banks send this via certified mail and retain the signed receipt. Also, for flood positive loans in a non-participating area your bank may, as a matter of policy, require flood insurance if it is available through a private company – that is a safety and soundness decision.
A paystub or tax return would work for income verification, but IMO does not verify employment status. These are reflective of employment in the past not currently. The regulation 1026.43(c)(3) states you must have verify employment status using third party records or you can verify it verbally with the employer but it needs to be well documented.
You need to train at least annually on the following (this information is also available on our calender at https://mycomplianceresource.com/compliance-calendar/. There are no specified required dates so we have assigned them to dates throughout the year.)
BSA/AML
CIP
Physical Bank Security
Information Security
ID Theft/Red Flags
Reg CC
And LO are required to have periodic training on state and federal lending lawsYou should also make sure everyone has had fair lending and UDAAP training recently.
The answer to your question is somewhat complicated but it boils down to if the loan meets the QM requirements then it is exempt from the HPML appraisal requirements. The commentary addresses this but I think the discussion in final rule explains it better. Take a look the final rule in the federal register: https://www.gpo.gov/fdsys/pkg/FR-2013-12-26/pdf/2013-30108.pdf, beginning on page 78527 with the information under the final rule – I think you’ll find all the details you need.
In order to meet the QM requirements, you would use the highest rate possible in the first five years after the first payment is due, so if the non-discounted rate is a possibility (meaning the discounted rate is conditional and can revert to the non-discounted rate) you would use the non-discounted rate.
The HPML repayment ability requirements are set to expire at 11:59pm on January 9, 2014 which means they won’t conflict with the ATR requirements when they become effective on January 10, 2014. Your bank can decide what DTI ratio they want to use. If you are making a general QM then the DTI must not exceed 43% – if you exceed that you will not have a QM under the general QM rule, even if you make an exception to your policy.
What section of Regulation O are you looking at regarding “maintenance” of a loan – this will help me understand your question better? Without specifically knowing what you’re looking at I would look to how extension of credit is defined in 12 CFR 215.3. Specifically it says
“[a]n extension of credit is a making or renewal of any loan, a granting of a line of credit, or an extending of credit in any manner whatsoever, and includes.. (5) An increase of an existing indebtedness…”We had a similar situation at a bank where I worked. You should be able to talk to your flood determination company and explain your situation. They have most likely seen this before and can review the location of the barn using the parcel number and aerial maps to determine if the barn is located in a flood zone. If part of the barn is in a flood zone then you will need flood insurance on the barn.
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There isn’t anything in the SAFE Act that suggests there would be any restrictions with the MLO changing jobs and registering with a new employer, even if loans are in progress with the current employer. I recommend, if there are loans in progress, the NMLS ID number of the MLO taking over/closing the loans be used where required on any remaining/closing documents. Either way, if there is a new MLO or if there is a loan originator who meets the de minimis exception in the SAFE Act closing the loan, I would recommend a nice letter to the applicant(s) informing them of their new MLO and include his/her NMLS #, if applicable. This would show a good faith attempt to inform the borrower(s) whom they are dealing with, which goes to the intent of the law (and be sure to keep a copy in the loan file).
Below is an excerpt from
Regulation Z Official Staff Interpretations, Paragraph 36(g)(1)(ii).
This is effective 1-10-14. I think it follows the same line of thought, that there could be two different loan originators during the course of the loan, disclosing the applicable NMLS # at the time.
1. Multiple individual loan originators. If more than one individual meets the definition of a loan originator for a transaction, the name and NMLSR ID of the individual loan originator with primary responsibility for the transaction at the time the loan document is issued must be included. A loan originator organization that establishes and follows a reasonable, written policy for determining which individual loan originator has primary responsibility for the transaction at the time the document is issued complies with the requirement. If the individual loan originator with primary responsibility for a transaction at the time a document is issued is not the same individual loan originator who had primary responsibility for the transaction at the time that a previously issued document was issued, the previously issued document is not required to be reissued merely to change a loan originator name and NMLSR ID.Jack’s Compliance Resource offers many products including policy and procedure updates, Director/Senior Manager Updates, Training Manuals, Flowcharts, Checklists and more. To access Jack’s Compliance Resource products visit our marketplace by clicking here:
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I believe an escrow check would fit the definition of a cashier’s check. I recommend following your normal procedures for a lost cashier’s check. You can find the requirements in UCC 3-312.
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I’m assuming the gift card the other bank is giving away is less than $10 which doesn’t qualify as a bonus and therefore doesn’t trigger the bonus disclosures. Same goes for the free box of check which would be an absorption of an expense.
From Reg DD 1030.2(f) Bonus means a premium, gift, award, or other consideration worth more than $10 (whether in the form of cash, credit, merchandise, or any equivalent) given or offered to a consumer during a year in exchange for opening, maintaining, renewing, or increasing an account balance. The term does not include interest, other consideration worth $10 or less given during a year, the waiver or reduction of a fee, or the absorption of expenses.
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In my opinion number one would be questionable since the customer would not be consenting electronically. Number two sounds more in line with the requirements. I have heard some banks include a code or information within the initially emailed document that the customer must retrieve and email back to the bank in order to prove they can open and read the document.
Here’s a link to information from the FDIC’s exam manual: https://www.fdic.gov/regulations/compliance/manual/pdf/X-3.1.pdf.Jack’s Compliance Resource offers many products including policy and procedure updates, Director/Senior Manager Updates, Training Manuals, Flowcharts, Checklists and more. To access Jack’s Compliance Resource products visit our marketplace by clicking here:
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You are not required to begin the notice process 45 days before renewal. I believe the point Jack was making was that unlike force-placing flood insurance, where you are required to wait to start the force-place process until the policy expires which often creates a 15 day gap of no insurance after the grace period end, you are not required to wait until the policy expires to begin the notification process.
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Reg X MarketplaceA reply from the Institute of Certified Bankers confirmed that these sessions are worth 1 Continuing Ed Credit for your CRCM.
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