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You don’t need a separate disclosure for each rate, but you do for each program. Take a look at commentary 1026.19(b)(2) 1 & 2 to determine if you need a new program disclosure.
Yes, for electronic delivery, you must obtain the applicant’s consent under the Electronic Signatures in Global and National Commerce Act (E-Sign Act). You will find information about E-Sign at https://www.fdic.gov/regulations/compliance/manual/pdf/X-3.1.pdf.
My opinion is that if you don’t have a firm take out commitment from another lender for the permanent financing, then the loan “may be converted to permanent financing by the same lender” (you), and, therefore, would not be exempt from RESPA.
You are correct. If you determine that you are not going to close a loan or open a credit line, you still have to give the applicant a copy of the appraisal and other written valuations “promptly upon completion.” If the applicant has waived that deadline, you must provide copies of the appraisal and other written valuations to the applicant 30 days after you determine the transaction will not close.
You do not have to give the appraisal the same day it is reviewed.The CFPB’s Small Entity Compliance Guide gives examples of what is “prompt upon completion” starting on page 17:
https://files.consumerfinance.gov/f/201307_cfpb_updated-sticker_ecoa-implementation-guide.pdfThis is referring to hazard insurance being paid as part of an escrow agreement or other agreement that the borrower and lender have in place for the lender to pay the hazard insurance (perhaps the borrower has requested the lender to make payments, on the borrower’s behalf, for a policy which the borrower had already established, etc.).
Yes this only applies to consumer loans covered by RESPA.
Here is a similar question posted in a forum a few weeks back. https://mycomplianceresource.com/forums/topic/work-out-loan-atr/
§ 1026.43 does not apply to any change to an existing loan that is not treated as a refinancing under § 1026.20(a). However, the commentary doesn’t address what to do in your particular situation regarding an open-end in default modified to a closed end. IMO, this would be worth consulting your attorney before you implement a new procedure for these types of transactions. Either way – refinancing or modification – you would need to give new disclosures. See commentary 1026.40 -5 https://www.bankersonline.com/regs/12-1026/12-1026-040.html.
You’re correct, as long as it is delivered 120 days before the new payment is due it is fine. Jack used the 45 day example because it is fairly common.
Here’s a similar post from a couple of weeks ago. https://mycomplianceresource.com/forums/topic/regulation-z-arm-notices/
They have slightly different thresholds. The big difference is HPML is principal dwelling secured and HPCT is dwelling secured. In addition, there is an additional threshold for jumbo HPMLs. So, just because one applies won’t always mean that both apply.
Higher Priced Mortgage Loan (HPML)
Closed end consumer credit secured by a principal dwelling with APR that exceeds the APOR by:
• 1.5% or more – first lien
• 2.5% or more – first lien jumbo
• 3.5% or more – subordinate lienHigher Priced Covered Transaction (HPCT) 12 CFR 1026.43(b)(4):
Consumer credit secured by a dwelling with APR that exceeds the APOR by:
• 1.5% or more – first lien loans
• 3.5% or more – subordinate lien loansTake a look at this post. It may answer your question. https://mycomplianceresource.com/forums/topic/loan-originator-financial-responsibility-character-gen-fitness-assessment/
Reg B OSC 1002.14(a)(1)(2) states: Renewals. Section 1002.14(a)(1) applies when an applicant requests the renewal of an existing extension of credit and the creditor develops a new appraisal or other written valuation. Section 1002.14(a)(1) does not apply to the extent a creditor uses the appraisals and other written valuations that were previously developed in connection with the prior extension of credit to evaluate the renewal request.
There is no exemption from the HPML appraisal requirements for renewals.I don’t believe the bonus from the credit life is based on terms or conditions of the loan and I don’t think it is a proxy because it wouldn’t meet the two prong test:
1. The factor consistently varies with a transaction term or terms over a significant number of transactions.
2. The loan originator has the ability, directly or indirectly, to add, drop, or change the factor when originating the transaction.Therefore, with the information you’ve given, I think it would be fine to pay the bonus you described.
I believe they are probably referring to the new mortgage servicing requirement under the new 12 CFR 1024.37(d)(2). You can find it here: https://files.consumerfinance.gov/f/201301_cfpb_final-rule_servicing-respa-amendments.pdf .
This is effective January 10, 2014.
