Q&A

heloc image

We are originating a HELOC loan to fully pay off an existing HELOC loan. Since there is no new money involved, would Right of Rescission apply?

Answer: Since the property is being deeded over to the borrower, the borrower is essentially purchasing the property for what is remaining Yes. Although no new money is being advanced, this is a new HELOC that will allow a customer to redraw on funds from the line once the loan is paid down. The Right …

We are originating a HELOC loan to fully pay off an existing HELOC loan. Since there is no new money involved, would Right of Rescission apply? Read More »

bitcoin atm

If the financial institution has a customer with a virtual currency kiosk located on their premises, (i.e. inside the gas station or convenience store), do we need to treat them as a Money Service Business (MSB)?

Answer: Since the property is being deeded over to the borrower, the borrower is essentially purchasing the property for what is remaining Yes. Although no new money is being advanced, this is a new HELOC that will allow a customer to redraw on funds from the line It depends. If your customer is simply leasing …

If the financial institution has a customer with a virtual currency kiosk located on their premises, (i.e. inside the gas station or convenience store), do we need to treat them as a Money Service Business (MSB)? Read More »

holiday gift basket

Our mortgage loan originators (MLOs) want to send holiday gift baskets to realtors and builders with whom they do business. We want to keep the total cost of the gift basket somewhere in the range of $25-$30. Would this be a problem under Section 8 of RESPA?

Answer: Anything of value, regardless of the amount, that is given for a referral of business, would be considered a violation of Section 8. Unfortunately, the CFPB has not provided clarification on these types of “gifts,” so we have to rely on what the regulation says. RESPA does allow for “normal promotional or educational activity”; …

Our mortgage loan originators (MLOs) want to send holiday gift baskets to realtors and builders with whom they do business. We want to keep the total cost of the gift basket somewhere in the range of $25-$30. Would this be a problem under Section 8 of RESPA? Read More »

audit

What is a common finding TCA sees in exempting eligible customers from CTR reporting?

Answer: During independent audits, TCA tests for initial and annual due diligence reviews of exempt customers. There are four requirements for a Phase II exemption.  Five transactions that exceed reporting thresholds in a 12-month period. The customer has a transaction account for at least 2 months. The customer is organized in a U.S. State. The …

What is a common finding TCA sees in exempting eligible customers from CTR reporting? Read More »

bank statement

What do we do with Federal Government ACH payments received and posted after the Date of Death, but before a financial institution was notified of the recipient’s death?

Answer: When the financial institution is notified of the death of a recipient, it must return all subsequent post-death benefit payments with a Return Reason Code R15 or R14. These codes notify the Federal agency of the recipient’s death. The financial institution may return any post-death benefits that have already posted by ACH without waiting …

What do we do with Federal Government ACH payments received and posted after the Date of Death, but before a financial institution was notified of the recipient’s death? Read More »

blue card

How do I complete Part II (Amounts and Dates) on a continuing activity suspicious activity report (SAR) if the transaction took place on a single date? Do I include the investigation range from the previous filing?

Answer: The date field in Part II should only cover the date range of activity determined to be suspicious, not the investigation range. If transaction occurred on a single date, the “To” field is left blank. Describe the time period of the investigation in the narrative.

loan stamp

A financial institution (FI) is adding a closing fee to the Loan Estimate (LE) due to a valid changed circumstance. The loan is set to close early next week and the FI needs to issue the Closing Disclosure (CD) in order to close on the borrower’s timeframe. Can the FI send both the revised LE and the initial CD on the same day?

Answer: No. Under Regulation Z, there has to be one day between the LE and CD. A revised LE must be issued no later than four business days prior to consummation and a CD must be issued at least three business days prior to consummation. However, Regulation Z does also permit us to provide changes …

A financial institution (FI) is adding a closing fee to the Loan Estimate (LE) due to a valid changed circumstance. The loan is set to close early next week and the FI needs to issue the Closing Disclosure (CD) in order to close on the borrower’s timeframe. Can the FI send both the revised LE and the initial CD on the same day? Read More »

asian woman on phone

A Loan Officer took an application by telephone, and the borrower failed to sign the acknowledgement to apply for joint credit on the application that was mailed for signature. How can joint intent be documented?

Answer: While it is always preferred that the borrower initial the joint intent statement on the application, there are times when the borrower fails to do so. Loan Officers should ask the borrowers this question during the initial phone application and document it in their notes. In the case where an application is returned without …

A Loan Officer took an application by telephone, and the borrower failed to sign the acknowledgement to apply for joint credit on the application that was mailed for signature. How can joint intent be documented? Read More »

home appraisal with two men inspecting windows

Is there any new fair lending risk that a financial institution should make sure is included in the Fair Lending Risk Assessment?

Answer: Yes. A new CFPB initiative has been developed known as PAVE – Property Appraisal and Valuation Equity. It is an Interagency Task Force to address inequity in home appraisals. Examiners will be looking to see how financial institutions ensure there is no appraisal bias in minority neighborhoods or minority homes by monitoring the financial …

Is there any new fair lending risk that a financial institution should make sure is included in the Fair Lending Risk Assessment? Read More »

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