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We have a borrower who is refinancing a loan from another family member. The property will be deeded over to our borrower at closing. How would this be reported on our HMDA-LAR?
Answer: Since the property is being deeded over to the borrower, the borrower is essentially purchasing the property for what is remaining on the existing loan. Therefore, this would be reported as a Purchase.
CRA Asset-Size Thresholds Announced for 2022
The annual CRA asset-size thresholds for covered financial institutions were announced December 16, 2021 applicable for 2022. The cutoff adjustments are based on the change in the CPI (Consumer Price Index) for each 12-month period ending in November, rounded to the nearest million. As a result of the 4.73% increase in the CPI, the levels […]
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”; […]
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 […]
Everything Old is New Again- OCC Rescinds CRA Rules
The OCC issued News Release 2021-133 on December 14, 2021, announcing the final rescinding of their June 2020 Community Reinvestment Act (CRA) Rule. The Final Rule will become effective as of January 1, 2022 and will apply to all national banks as well as to both federal and state savings associations. Financial institutions regulated by […]
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 […]
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.
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 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 […]
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 […]
