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If a bank force places flood insurance and adds the cost to the loan, is that considered an increase subject to providing a notice to the borrower that the property is located in a SFHA?
If force placed flood insurance is in place at loan maturity and the loan is renewed, is it acceptable for that same forced placed flood insurance policy to remain in place?
Our billing/current payment due shows for example the interest based on whether that month has 30 31 or 28 days and adjusts based on when the prior payment was made. However the next month’s statement that shows the prior month payment amounts going to interest and principal seems to have an interest amount that is different, that is based on the actual # of days since the prior payment and the next payment.
For example the first bill for a loan showed 31 days interest amount in the current payment due section. The first payment was received 5 days early, so the actual amount that went to interest was 26 days, then the next month’s bill was for 36 days. Basically the monthly statement for one month that shows the interest and principal breakdown for the current payment due, does not match how the payments were actually applied to interest and principal on the next monthly statement.
We do not include any odd days interest at the beginning of the loan, if that’s a factor.
Under TRID, if a construction loan that has not yet matured needs to be modified due to construction not yet completed, can we do a change in terms, or would we need to disclose entirely, and treat as a refinance?
Our bank has the same practice, we honor the rate quoted at application, and do not lock the rate either. So I understand checking “No” for Rate Lock, however the paragraph below that on the LE states “All other estimated closing costs expire on X/X/XXX at X:XX XM CST. What date should we put here? The commentary does not discuss parameters. Can we put the same day the LE is issued, or next day? (even if mailed)
Yes, that is my question, but regarding individuals who have not formed entities for their rentals. It came up when we had made several loans to a borrower for rental properties, that is his line of work, rental properties, and then he came back for a home loan for himself, which was subject to ATR. That is when the loan committee global figures had been approved for this borrower due to the overall relationship, however ATR documentation was also required, and when the 2 figures differed, we were trying to determine for HMDA what figure should be reported.
Hi rcooper, we are a large bank only using the general ATR rule (no QMs at all) and offer ARMs of varying amortization periods depending on how many years the customer needs for the equal payments, where the rate adjusts either every 5 years, 3 years or 1 year for the term of the ARM. The rate is Prime + margin for the entire term, no cap at each adjustment. Lifetime cap increase is 6% so for a moargin of 1.35 the initial rate would be 4.55 with a lifetime cap of 10.55. No initial discount or premium. My question as well is what is the “fully indexed rate”? My understanding is it would be the actual initial rate of Prime of 3.25% + 1.35 for 4.55%. on a 5 year ARM. Is that correct? And would that be the same for the 1 or 3 year ARMs?
Robin, could you clarify 1002.14a(1) for me, specifically the commentary that says “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.” ?
When exactly would the rule not apply? To an application where we used a prior appraisal? or just if it was a “renewal” (not a refinance, increase, extension, modification), etc…?
I originally thought this meant if a bank originated, renewed, refinanced, extended, etc… made any type of credit extension, and used an existing appraisal from a prior loan, and therefore did not obtain an appraisal in connection with that new loan’s application, regardless as to weather it was a renewal, refi, extension, etc… the appraisal rule would not apply for the new loan….because they already have it.
(Reg B’s definition of credit is very broad and includes credit of all types)
What if the telephone applicant says they do not wish to provide GMI. The LAR codes include one named the following for race, sex, and ethnicity: information not provided by applicant in mail, internet, or telephone application. For those instances, can the bank stop there on GMI, and report that code on the LAR? Or if that application ends up being an originated loan, is the bank expected to visually observe if we close the loan in person? Thank you.
