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Latest Compliance - RESPA Topics

Deducting Escrow Balance from the Principal

08/22/2011

Are creditors allowed to deduct escrow balance from the principal when the loan pays off? The outside auditors we use for Compliance review is saying it is acceptable but when I went to Bankers online I get a different response. Which is correct?

Rental Property-Business Loan or Consumer Loan?

08/08/2011

A loan is given to a consumer who wishes to purchase investment property (i.e. a home to rent). If this is their first or only rental property, is it a business loan or a consumer loan for personal investment and subject to RESPA disclosures?

Credit Report Fee Considered Finance Charge?

08/01/2011

A bank charges a $20 credit report fee for consumer real estate loans, but the fee is actually less. Should the amount that is in excess of the actual cost be considered a finance charge for Reg Z purposes? I realize there is a huge RESPA issue in this practice as well.

Pulling Credit on Application and Subject Property

07/18/2011

My Compliance Officer says that my bank cannot pull credit on an applicant who wants to get pre-approved until the applicant finds a house. She says that RESPA states that the subject property address is required in order to have a complete application. I have always been under the impression that TBD was okay to use as the subject property. Do you agree with her or should I be okay to pull the credit on this applicant and provide a Pre-Approval letter?

RESPA- Conditions for Re-Disclosure

06/27/2011

I need to clear up a RESPA issue. I'm under the impression that it's OK to re-disclose if the transfer tax was not disclosed or the wrong amount was on the initial GFE. Can it be re-disclosed as long as any changes in the zero tolerance section blocks 1, 2, and 8 last GFE match the HUD-1? Where can I find it in the regulations?

Loan Servicing Transfer (Real Estate Portfolio)

06/20/2011

We have a small commercial real estate loan portfolio and we are going to transfer the loan servicing to another company. What is the required time period? Where can I get a sample form hello-goodbye letter?

Rule for Investment Purpose Loan

05/23/2011

I have a question concerning a loan request by a customer. They will be purchasing a fourplex for investment purposes. After 12 months, the purchaser of the fourplex will move into one of the units and occupy it as a primary residence. Will this loan be considered for investment purposes whereas we do not need to send early TIL and RESPA disclosures? Or will they be required based on the customer residing in one unit after 12 months?

RESPA/Disclosures/HPML for Equity Loan

05/09/2011

I am working on a new loan transaction. The borrower is purchasing a primary residence and the loan will be sold in the secondary market. The 20% down payment will be borrowed against his home that is currently his primary residence that he owns free and clear. After the purchase is finalized, he will be living in the new home as his primary residence and the home he owns now that will be securing the equity loan will be used as an investment property. Does RESPA apply to the equity loan? Do early disclosures have to be issued? Also, does rescission apply to the equity loan since it is in fact his primary residence at this time. Also, since the equity loan will be kept in-house on a balloon rate, will this be considered a HPML where escrow will have to be collected?

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Adding PODs on Joint Accounts

01/28/2024

When a customer has joint account and only one person on the account wants to add a beneficiary to the account, can this be done or must each accountholder agree?

Conductor Information for Aggregate CTRs

01/28/2024

We have a business customer whose deposit runners are refusing to provide their information for us to collect as conductors of cash transactions. These are typically smaller transactions, but we require a conductors information on all cash transactions over $1,000 for aggregation reporting purposes. They previously banked at a larger regional bank which did not require these runners to provide identifying information. Are we OK to make an exception for this business client unless it is a CTR reportable transaction?

Using a EIN on a personal account

01/28/2024

We have a customer that is an agent for one of the local insurance companies. She wants to open an account in her name only using the insurance company EIN, can we do that?

Incentive Progarms and Trust Account Investments

01/21/2024

We recently inquired if we could use self-deposit investments where the bank is acting as Trustee. We have received a legal opinion stating that we can use self-deposit investments so long as we document our due diligence, the trust allows for the investment, and our Money Market Account (MMA) is a competitive rate. We are currently discussing a referral incentive program which would include our Trust Division. I have read a lot of guidance between FDIC, OCC, and FRB, but I am not seeing anything that speaks to my particular situation. Can a Trust Officer use a self-deposit investment as Trustee and still receive a referral incentive for this transaction? I personally feel like this is a conflict of interest and somewhat, self-dealing. However, I am not seeing anything stating this would be an issue per se. I am only running into nonretail deposit and broker/dealer requirements. I have also looked through Arkansas code (our state) and I could not see anything that spoke on this particular situation. If you have any insight or could point me in the right direction to help confirm or rebuttal my though process, I would really appreciate it!

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