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You are correct in all of your assumptions. Basically instead of telling the client that they will, for example, earn 1% on anything equal to or greater than $100,000, the disclosure makes it seem as if 1% is only earned above $100,000.
Right, I looked at this section of the Regulation and since the situation didn’t seem to fit, I wasn’t sure what sort of timeline I needed to follow. Our vendor stated that a TISA update was released on 10/1/2020, however you have to be on a certain version of their product before you complete the download. As a general rule, we stay 2 builds behind because of issues that have presented in the past. We also always put the new build into our test environment before releasing it. Without the update, our system will continue to generate the incorrect disclosure for anyone opening these tiered account. Does 30 days from the time we received the notice from our vendor (to give us time to update and test the latest version) seem like an unreasonable timeframe to notify the clients that require re-disclosure?
The 20% is like their down payment that they have to place in the account first. After that is used then we will advance from the line.
20 % of the loan amount. The escrow account would be to help ensure that funds are being used appropriately. Currently funds are placed in a checking account for the client, and often funds are misused. Basically the funds of the construction loan would be held in the escrow account. Once the client needed funds from the account, they would bring in invoices and the MLO would have the ability to cut a cashier’s check to the provider of the service.
