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Copyright © TTS and Anne Lolley Best‐Ever Checklists for Credit Unions April 8, 2015 For questions call 877‐778‐5192 x4 (toll‐free) 1
Modified for Credit Unions
BEST-EVER CONSUMER CHECKLISTS The Checklists
Anne Lolley with Total Training Solutions 877‐778‐5192 X4 (toll‐free) [email protected]
WEBINAR OF APRIL 8, 2015
CHECKLISTS INCLUDE THE NEW INTEGRATED DISCLOSURE REQUIREMENTS.USE ONLY FOR LOAN APPLICATIONS RECEIVED ON OR AFTER AUGUST 1, 2015.
Copyright © TTS and Anne Lolley Best‐Ever Checklists for Credit Unions April 8, 2015 For questions call 877‐778‐5192 x4 (toll‐free) 2
____________________
Checklist 1 – Secured by Real Estate & Dwelling .............................................................. 3
Checklist 1A – HPML Secured by Real Estate & Dwelling ................................................. 5
Checklist 2 – Secured by Real Estate – No Dwelling ......................................................... 7
Checklist 3 – NOT Secured by Real Estate or Dwelling ..................................................... 9
Checklist 4 – Secured by Manufactured Home .............................................................. 10
Checklist 5 – Temporary Loan (Initial Construction) ...................................................... 12
Checklist 6 – Temporary Loan (Non‐Construction) ........................................................ 14
Checklist 7 – Bridge Loan (For New Principal Dwelling) ................................................. 16
Checklist 8 – Home Equity Line of Credit (HELOC) ......................................................... 18
Checklist 9 – Ability to Repay and Qualified Mortgages ................................................. 20
Copyright © TTS and Anne Lolley Best‐Ever Checklists for Credit Unions April 8, 2015 For questions call 877‐778‐5192 x4 (toll‐free) 3
Use this checklist for an original or refinanced loan that is:
Consumer purpose Closed-end Secured by real estate and a dwelling Not a higher-priced mortgage loan (HPML)
AAPPPPLLIICCAANNTTSS
LLOOAANN NNUUMMBBEERR
AAPPPPLLIICCAATTIIOONN DDAATTEE
1
LOAN TYPE 2
New loan Refinancing - new money Refinancing – no new money
LIEN STATUS 3
First mortgage Junior mortgage
DWELLING TYPE 4
Principal dwelling of applicant Principal dwelling of non-applicant Not a principal dwelling
ENVIRONMENTAL RISK ANALYSIS 5
Past and present uses _____________________________________
Government contacts______________________________________
RESPA? 6
Yes No
RIGHT OF RESCISSION? 7
Yes No
HPML? 8
HIGH-COST? 9
Yes No
HMDA? 10
Yes No
If loan is secured by the consumer’s principal dwelling, determine whether the APR exceeds the APOR by:
1.5% ‐ first mortgage 2.5% ‐ jumbo mortgage 3.5% ‐ junior mortgage
Generally, RESPA will apply to this loan, even if it is a refi or a junior mortgage. RESPA will NOT apply, however, if this loan is secured by more than 25 acres.
Generally, ROR will apply if loan is secured by a principal dwelling. But ROR will not apply if:
Loan is to buy applicant’s principal dwelling and is secured by same dwelling; or
Same-lender refi with no new money
If loan is secured by consumer’s principal dwelling, determine whether any of these triggers will make this a high-cost mortgage:
High APOR High points and fees Prepayment penalties
HMDA applies if loan is:
To purchase a dwelling and secured by a dwelling
A home improvement loan
A refinancing (old and new loan secured by dwelling)
WHEN APPLICATION FORM IS PROVIDED
If (i) adjustable rate, (ii) secured by borrower’s principal dwelling and 11 (iii) greater than one year, give ARM disclosures:
Consumer Handbook on Adjustable Rate Mortgages Disclosure for each ARM program in which applicant is interested
AT APPLICATION
Obtain or prepare written application 12
Determine and document whether joint/individual credit 13
IF HMDA APPLIES ‐ 14 Obtain monitoring information (ethnicity, race, sex) Inform applicant: Federal government requests information Inform applicant: Lender is required to note ethnicity, race, sex
IF NEW CUSTOMER ‐ Follow bank’s CIP rules 15
AS SOON AS POSSIBLE
IF RISK‐BASED PRICING ‐ Provide Credit Score Notice to each applicant 17
WITHIN 3 BUSINESS DAYS AFTER APPLICATION
IF TELEPHONE APPLICATION – Provide ARM disclosures now: 11
Consumer Handbook on Adjustable Rate Mortgages Disclosure for each ARM program in which applicant is interested
IF FIRST MORTGAGE ‐ Provide ECOA copy‐of‐appraisal notice 18
Provide Loan Estimate 19
Deliver, mail or e‐mail no later than 3rd business day after application Deliver, mail or e‐mail no later than 7th business day before closing Not required if denied/withdrawn within 3 business days
Provide list of settlement providers (if consumer can shop for provider) 19
Deliver, mail or e‐mail no later than 3rd business day after application Deliver, mail or e‐mail no later than 7th business day before closing Not required if denied/withdrawn within 3 business days
Provide Settlement Cost Booklet 19
Deliver, mail or e‐mail no later than 3 business days after application Not required if refinancing or junior lien
IF RESPA APPLIES – Provide the following disclosures: 20 List of homeownership counseling organizations Affiliated Business Arrangement Disclosure Statement (if necessary)
NOT REQUIRED IF APPLICATION IS DENIED OR WITHDRAWN WITHIN THREE BUSINESS DAYS
PRIOR TO CLOSING
ABILITY TO REPAY ‐ 21
Using General ATR Requirements Use 8 factors Verify with 3rd party data
General Qualified Mortgage Use highest payment in first 5 years after first payment Consider/verify income/assets/debts/obligations (Use Appendix Q)
Temporary Qualified Mortgage ‐ Use GSE guidelines
Balloon Payment Qualified Mortgage Use scheduled payments . . . but no need to consider balloon payment Consider/verify income/assets/debts/obligations (Append Q not required)
Small‐Creditor Portfolio Qualified Mortgage Use highest payment in first 5 years after first payment Consider/verify income/assets/debts/obligations (Append Q not required)
CREDIT UNION ‐ APRIL 2015 ‐ HMDA
IF THIS LOAN IS A HPML, USE CHECKLIST 11‐‐AA
IF HPML/TEMPORARY/BRIDGE LOAN USE SPECIAL CHECKLISTS
Copyright © TTS and Anne Lolley Best‐Ever Checklists for Credit Unions April 8, 2015 For questions call 877‐778‐5192 x4 (toll‐free) 4
FLOOD INSURANCE ‐ 23
Obtain flood hazard determination IF FLOOD HAZARD AREA ‐ give notice and get acknowledgement IF FHA AND COMMUNITY PARTICIPATES ‐ require flood insurance
APPRAISAL OR EVALUATION ‐ 24
Order new appraisal Conduct new evaluation SELECT ONE Use existing appraisal or evaluation (must verify validity)
Review appraisal or evaluation
IF FIRST MORTGAGE ‐ Deliver, mail or e‐mail copy of appraisal 18
Must be received at least 3 business days before closing (note mailbox rule) Timing waiver permitted (if received at least 3 business days before closing)
Deliver, mail or e‐mail Closing Disclosure 19
Must be received no later than 3 business days before closing (note mailbox rule)
IF HIGH‐COST MORTGAGE ‐ 26 High‐cost mort disclosure (must be received 3 business days before closing) If ROR applies, give disclosure to each consumer entitled to rescind Obtain written certification of homeownership counseling
IF NEGATIVE AMORTIZATION AND FIRST‐TIME BORROWER ‐ Obtain 27 documentation showing homeownership counseling
Provide revised Loan Estimate (if necessary) 19
Permitted if changed circumstances/consumer request/Loan Estimate expired Only if exceeds tolerance Deliver, mail or e‐mail within 3 business days after receiving information Must be received no later than 4 business days before closing (note mailbox rule)
Provide corrected Closing Disclosure (if necessary) 19
If APR/loan product/prepayment penalty – received 3 business days before closing Otherwise – may provide at closing
ADVERSE ACTION (IF APPLICABLE)
Application denied ‐ Provide Notice of Action Taken 28 No decision within 30 days ‐ Provide Notice of Action Taken Application withdrawn ‐ Indicate in initialed, dated note in file
PREPARE/GATHER DOCUMENTS FOR CLOSING (LOAN PROCESSORS)
Promissory note /Truth‐in‐Lending Disclosures 29
Note and mortgage must contain bank/lender name and NMLSR 29
IF RIGHT OF RESCISSION APPLIES ‐ 30
Notice of ROR (two copies for each consumer entitled to rescind) Copy of Closing Disclosure for each consumer entitled to rescind
IF RESPA APPLIES ‐ Initial Escrow Account Disclosure (if escrow) 31
IF HMDA APPLIES ‐ Collect and document required data 14
IF NEW CUSTOMER OR NEW PRIVACY POLICY ‐ Privacy Notice 32
WAITING PERIODS BEFORE CLOSING
Closing cannot occur until: 34 7th business day after delivering/mailing initial Loan Estimate
4th business day after consumer received revised Loan Estimate
3rd business day after applicant received high‐cost mortgage disclosure
3rd business day after applicant received copy of appraisal/evaluation
3rd business day after applicant received initial Closing Disclosure
3rd business day after applicant received corrected Closing Disclosure (if correction deals with APR/loan product/prepayment penalty)
SEE BOOKLET FOR DEFINITION OF “BUSINESS DAY”
AT CLOSING
PROMISSORY NOTE/TRUTH‐IN‐LENDING DISCLOSURES ‐ 29
Signed by borrower and lender? Unsigned pages initialed by borrowers? Note and mortgage contain bank/lender name and NMLSR?
IF RIGHT OF RESCISSION APPLIES ‐ 30
Notice of ROR (two copies to each consumer entitled to rescind) Copy of Closing Disclosure to each consumer entitled to rescind
IF RESPA APPLIES – Initial Escrow Disclosure (at closing or within 45 days) 31
IF NEW CUSTOMER OR NEW PRIVACY POLICY ‐ Provide Privacy Notice 32
AFTER CLOSING
IF RIGHT OF RESCISSION APPLIES ‐ Wait 3 business days before funding 30
Provide corrected Closing Disclosure (if necessary) 19
If settlement event results in change to amount paid by consumer Deliver/mail/e‐mail within 30 calendar days after receiving information
NOTES AND REMINDERS
Private mortgage insurance – disclosure/termination requirements 39 Referral fee ‐ consider checklist Borrower is a service member ‐ special rules Negative information to consumer reporting agency ‐ notice to customer
NOTES AND INSTRUCTIONS
Copyright © TTS and Anne Lolley Best‐Ever Checklists for Credit Unions April 8, 2015 For questions call 877‐778‐5192 x4 (toll‐free) 5
Use this checklist for a higher-priced mortgage loan (HPML) that is:
Consumer purpose Closed-end Secured by real estate
AAPPPPLLIICCAANNTTSS
LLOOAANN NNUUMMBBEERR
AAPPPPLLIICCAATTIIOONN DDAATTEE
1
LOAN TYPE 2
New loan Refinancing ‐ new money Refinancing – no new money
LIEN STATUS 3
First mortgage
Junior mortgage
ENVIRONMENTAL RISK ANALYSIS 5
Past and present uses _______________________________________________ Government contacts________________________________________________
RESPA? 6
Yes No
RIGHT OF RESCISSION? 7
Yes No
HIGH-COST? 9
Yes No
HMDA? 10
Yes No
Generally applies (even if refinancing or junior mortgage). But will NOT apply if secured by more than 25 acres.
ROR will apply unless:
Loan is to buy applicant’s principal dwelling and is secured by same dwelling; or
Same-lender refinancing with no new money.
Determine whether any of these triggers will make this loan a high-cost mortgage:
High APOR High points and fees Prepayment penalties
HMDA applies if loan is:
To purchase a dwelling & secured by a dwelling
A home improvement loan
A refinancing (old & new loan secured by dwelling)
WHEN APPLICATION FORM IS PROVIDED
If (i) adjustable rate, (ii) secured by borrower’s principal dwelling and 11 (iii) greater than one year, give ARM disclosures:
Consumer Handbook on Adjustable Rate Mortgages Disclosure for each ARM program in which applicant is interested
AT APPLICATION
Obtain or prepare written application 12
Determine and document whether joint/individual credit 13
IF HMDA APPLIES ‐ 14 Obtain monitoring information (ethnicity, race, sex) Inform applicant: Federal government requests information Inform applicant: Lender is required to note ethnicity, race, sex
IF NEW CUSTOMER ‐ Follow bank’s CIP rules 15
AS SOON AS POSSIBLE
IF RISK‐BASED PRICING ‐ Provide Credit Score Notice to each applicant 17
WITHIN 3 BUSINESS DAYS AFTER APPLICATION
IF TELEPHONE APPLICATION – Provide ARM disclosures now: 11
Consumer Handbook on Adjustable Rate Mortgages Disclosure for each ARM program in which applicant is interested
COPY‐OF‐APPRAISAL NOTICE ‐ Provide copy‐of‐appraisal notice 18 Only required if HPML or non‐HPML first mortgage
Provide Loan Estimate 19
Deliver, mail or e‐mail no later than 3rd business day after application Deliver, mail or e‐mail no later than 7th business day before closing Not required if denied/withdrawn within 3 business days
Provide list of settlement providers (if consumer can shop for provider) 19
Deliver, mail or e‐mail no later than 3rd business day after application Deliver, mail or e‐mail no later than 7th business day before closing Not required if denied/withdrawn within 3 business days
Provide Settlement Cost Booklet 19
Deliver, mail or e‐mail no later than 3 business days after application Not required if refinancing or junior lien
IF RESPA APPLIES – Provide the following disclosures: 20 List of homeownership counseling organizations Affiliated Business Arrangement Disclosure Statement (if necessary)
NOT REQUIRED IF APPLICATION IS DENIED OR WITHDRAWN WITHIN THREE BUSINESS DAYS
PRIOR TO CLOSING
ABILITY TO REPAY ‐ 21
Using General ATR Requirements Use 8 factors Verify with 3rd party data
General Qualified Mortgage Use highest payment in first 5 years after first payment Consider/verify income/assets/debts/obligations (Use Appendix Q)
Temporary Qualified Mortgage ‐ Use GSE guidelines
Balloon Payment Qualified Mortgage Use scheduled payments . . . but no need to consider balloon payment Consider/verify income/assets/debts/obligations (Append Q not required)
Small‐Creditor Portfolio Qualified Mortgage Use highest payment in first 5 years after first payment Consider/verify income/assets/debts/obligations (Append Q not required)
FLOOD INSURANCE 23
Obtain flood hazard determination IF FLOOD HAZARD AREA ‐ give notice and get acknowledgement IF FHA AND COMMUNITY PARTICIPATES ‐ require flood insurance
CREDIT UNION ‐ APRIL 2015 ‐ HMDA
IF TEMPORARY OR BRIDGE LOANUSE SPECIAL CHECKLISTS
Copyright © TTS and Anne Lolley Best‐Ever Checklists for Credit Unions April 8, 2015 For questions call 877‐778‐5192 x4 (toll‐free) 6
IF HPML USE THESE SPECIAL APPRAISAL RULES ‐ 25
Order new appraisal (evaluations and existing appraisals not permitted) Review appraisal
Deliver, mail or e‐mail copy of appraisal 18
Must be received at least 3 business days before closing (note mailbox rule) Timing waiver not permitted
Additional appraisal for some flipped properties (exempt if in rural county)
IF LOAN IS IS AN EXEMPT HPML, USE THE APPRAISAL RULES BELOW
GENERAL APPRAISAL/EVALUATION RULES ‐ 24
Order new appraisal Conduct new evaluation SELECT ONE Use existing appraisal or evaluation (must verify validity)
Review appraisal or evaluation
If first mortgage – provide copy of appraisal 18
Must be received at least 3 business days before closing (note mailbox rule) Timing waiver permitted (if received at least 3 business days before closing)
Deliver, mail or e‐mail Closing Disclosure 19
Must be received at least 3 business days before closing (note mailbox rule)
IF HIGH‐COST MORTGAGE ‐ 26 High‐cost mort disclosure (must be received 3 business days before closing) If ROR applies, give disclosure to each consumer entitled to rescind Obtain written certification of homeownership counseling
IF FIRST‐MORTGAGE HPML ‐ Establish escrow for taxes/insurance 35 Only if loan exceeds 12 months Many small institutions are exempt
IF NEGATIVE AMORTIZATION AND FIRST‐TIME BORROWER – 27 Obtain documentation showing homeownership counseling
Provide revised Loan Estimate (if necessary) 19
Permitted if changed circumstances/consumer request/Loan Estimate expired Only if exceeds tolerance Deliver, mail or e‐mail within 3 business days after receiving information Must be received no later than 4 days before closing (note mailbox rule)
Provide corrected Closing Disclosure (if necessary) 19
If APR/loan product/prepayment penalty – received 3 business days before closing Otherwise – may provide at closing
ADVERSE ACTION (IF APPLICABLE)
Application denied ‐ Provide Notice of Action Taken 28 No decision within 30 days ‐ Provide Notice of Action Taken Application withdrawn ‐ Indicate in initialed, dated note in file
PREPARE/GATHER DOCUMENTS FOR CLOSING (LOAN PROCESSORS)
Promissory note /Truth‐in‐Lending Disclosures 29
Note and mortgage must contain bank/lender name and NMLSR 29
IF RIGHT OF RESCISSION APPLIES ‐ 30
Notice of ROR (two copies for each consumer entitled to rescind) Copy of Closing Disclosure for each consumer entitled to rescind
IF RESPA APPLIES ‐ Initial Escrow Account Disclosure (if escrow) 31
IF HMDA APPLIES ‐ Collect and document required data 14
IF NEW CUSTOMER OR NEW PRIVACY POLICY ‐ Privacy Notice 32
WAITING PERIODS BEFORE CLOSING
Closing cannot occur until: 34 7th business day after delivering/mailing initial Loan Estimate
4th business day after consumer received revised Loan Estimate
3rd business day after applicant received high‐cost mortgage disclosure
3rd business day after applicant received copy of appraisal/evaluation
3rd business day after applicant received initial Closing Disclosure
3rd business day after applicant received corrected Closing Disclosure (if correction deals with APR/loan product/prepayment penalty)
SEE BOOKLET FOR DEFINITION OF “BUSINESS DAY”
AT CLOSING
PROMISSORY NOTE/TRUTH‐IN‐LENDING DISCLOSURES ‐ 29
Signed by borrower and lender? Unsigned pages initialed by borrowers? Note and mortgage contain bank/lender name and NMLSR?
IF RIGHT OF RESCISSION APPLIES ‐ 30
Notice of ROR (two copies to each consumer entitled to rescind) Copy of Closing Disclosure to each consumer entitled to rescind
IF RESPA APPLIES – Initial Escrow Disclosure (at closing or within 45 days) 31
IF NEW CUSTOMER OR NEW PRIVACY POLICY ‐ Provide Privacy Notice 32
AFTER CLOSING
IF RIGHT OF RESCISSION APPLIES ‐ 30
Wait 3 business days before advancing funds (Saturday is a business day)
Provide corrected Closing Disclosure (if necessary) 19
If settlement event results in change to amount paid by consumer Deliver/mail/e‐mail within 30 calendar days after receiving information
NOTES AND REMINDERS
Private mortgage insurance – disclosure/termination requirements 39
Referral fee ‐ consider checklist
If borrower is service member ‐ special rules
Negative information to consumer reporting agency ‐ notice to customer
NOTES AND INSTRUCTIONS
HPML IS EXEMPT FROM HPML APPRAISAL RULES IF:
Qualified mortgage Streamlined refinancing Loan of $25,500 or less
Copyright © TTS and Anne Lolley Best‐Ever Checklists for Credit Unions April 8, 2015 For questions call 877‐778‐5192 x4 (toll‐free) 7
Use this checklist for original and refinanced loans that are:
Consumer purpose Closed-end Secured by real estate on which there is no dwelling
AAPPPPLLIICCAANNTTSS
LLOOAANN NNUUMMBBEERR
1 AAPPPPLLIICCAATTIIOONN DDAATTEE
THIS LOAN IS NOT SECURED BY A DWELLING, SO THE FOLLOWING RULES WILL NOT APPLY:
ABILITY‐TO‐REPAY ARM DISCLOSURES COPY‐OF‐APPRAISAL REQUIREMENTS
CREDIT SCORE DISCLOSURES HIGH‐COST MORTGAGE RULES
HOMEOWNERSHIP COUNSELING HPML RULES NMLSR DOCUMENTATION REQUIREMENTS
RESPA RIGHT OF RESCISSION WAITING PERIODS
LOAN TYPE 2
New loan Refinancing ‐ new money Refinancing ‐ no new money
HMDA? 10
Yes No
ENVIRONMENTAL RISK ANALYSIS 5
Past and present uses ______________________
________________________________________
Government contacts______________________
________________________________________
HMDA applies if:
Proceeds will be used for home improvement; and
Bank classifies the loan as “home improvement”
LIEN STATUS 3
First mortgage Junior mortgage
AT APPLICATION
Obtain or prepare written application 12
Determine and document whether joint/individual credit 13
IF HMDA APPLIES ‐ 14 Obtain monitoring information (ethnicity, race, sex) Inform applicant: Federal government requests information Inform applicant: Lender is required to note ethnicity, race, sex
IF NEW CUSTOMER ‐ Follow bank’s CIP rules 15
AS SOON AS POSSIBLE
IF RISK‐BASED PRICING ‐ Provide Credit Score Notice to each applicant 17
WITHIN 3 BUSINESS DAYS AFTER APPLICATION
Provide Loan Estimate 19
Deliver, mail or e‐mail no later than 3rd business day after application Deliver, mail or e‐mail no later than 7th business day before closing Not required if denied/withdrawn within 3 business days
Provide list of settlement providers (if consumer can shop for provider) 19
Deliver, mail or e‐mail no later than 3rd business day after application Deliver, mail or e‐mail no later than 7th business day before closing Not required if denied/withdrawn within 3 business days
Provide Settlement Cost Booklet 19
Deliver, mail or e‐mail no later than 3 business days after application Not required if refinancing or junior lien
PRIOR TO CLOSING
FLOOD INSURANCE ‐ 23
Obtain flood hazard determination IF FLOOD HAZARD AREA ‐ give notice and get acknowledgement IF FHA AND COMMUNITY PARTICIPATES ‐ require flood insurance
APPRAISAL OR EVALUATION ‐ 24
Order new appraisal Conduct new evaluation SELECT ONE Use existing appraisal or evaluation (must verify validity)
Review appraisal or evaluation
Deliver, mail or e‐mail Closing Disclosure 19
Must be received no later than 3 business days before closing (note mailbox rule)
Provide revised Loan Estimate (if necessary) 19
Permitted if changed circumstances/consumer request/Loan Estimate expired Only if exceeds tolerance Deliver, mail or e‐mail within 3 business days after receiving information Must be received no later than 4 business days before closing (note mailbox rule)
Provide corrected Closing Disclosure (if necessary) 19
If APR/loan product/prepayment penalty – received 3 business days before closing Otherwise – may provide at closing
ADVERSE ACTION (IF APPLICABLE)
Application denied ‐ Provide Notice of Action Taken 28 No decision within 30 days ‐ Provide Notice of Action Taken Application withdrawn ‐ Indicate in initialed, dated note in file
CREDIT UNION ‐ APRIL 2015 ‐ HMDA
USE THIS CHECKLIST IF THE LOAN IS SECURED BY VACANT LOTS, BARE GROUND, FARM BUILDINGS OR COMMERCIAL BUILDINGS.
Copyright © TTS and Anne Lolley Best‐Ever Checklists for Credit Unions April 8, 2015 For questions call 877‐778‐5192 x4 (toll‐free) 8
PREPARE/GATHER DOCUMENTS FOR CLOSING (LOAN PROCESSORS)
Promissory note/Truth‐in‐Lending Disclosures 29
IF HMDA APPLIES ‐ Collect and document required data 14
IF NEW CUSTOMER OR NEW PRIVACY POLICY ‐ Privacy Notice 32
WAITING PERIODS BEFORE CLOSING
Closing cannot occur until: 34 7th business day after delivering/mailing initial Loan Estimate
4th business day after consumer received revised Loan Estimate
3rd business day after applicant received initial Closing Disclosure
3rd business day after applicant received corrected Closing Disclosure (if correction deals with APR/loan product/prepayment penalty)
SEE BOOKLET FOR DEFINITION OF “BUSINESS DAY”
AT CLOSING
PROMISSORY NOTE/TRUTH‐IN‐LENDING DISCLOSURES ‐ 29
Signed by borrower and lender? Unsigned pages initialed by borrowers?
IF NEW CUSTOMER OR NEW PRIVACY POLICY ‐ Provide Privacy Notice 32
AFTER CLOSING
Provide corrected Closing Disclosure (if necessary) 19
If settlement event results in change to amount paid by consumer Deliver/mail/e‐mail within 30 calendar days after receiving information
OTHER NOTES AND REMINDERS
If borrower is service member ‐ special rules 39
Negative information to consumer reporting agency ‐ notice to customer
NOTES AND INSTRUCTIONS
Copyright © TTS and Anne Lolley Best‐Ever Checklists for Credit Unions April 8, 2015 For questions call 877‐778‐5192 x4 (toll‐free) 9
Use this checklist for original and refinanced loans that are:
Consumer purpose Closed-end NOT secured by real estate or dwelling
AAPPPPLLIICCAANNTTSS LLOOAANN NNUUMMBBEERR
1 AAPPPPLLIICCAATTIIOONN DDAATTEE
THIS LOAN IS NOT SECURED BY REAL ESTATE OR A DWELLING,
SO THE FOLLOWING RULES WILL NOT APPLY:
ABILITY‐TO‐REPAY APPRAISAL/EVALUATION RULES ARM DISCLOSURES COPY‐OF‐APPRAISAL REQUIREMENTS ENVIRONMENTAL RISK ANALYSIS
CREDIT SCORE DISCLOSURES FLOOD INSURANCE HIGH‐COST MORTGAGE RULES HOMEOWNERSHIP COUNSELING HPML RULES
INTEGRATED DISCLOSURES NMLSR REQUIREMENTS RESPA RIGHT OF RESCISSION WAITING PERIODS
LOAN TYPE 2 New loan Refinancing ‐ new money Refinancing – no new money
HMDA? 10
Yes No
HMDA applies if:
Proceeds will be used for home improvement; and
Bank classifies the loan as home improvement
LIEN STATUS 3 First mortgage Junior mortgage
AT APPLICATION
Obtain or prepare written application 12
Determine and document whether joint/individual credit 13
IF HMDA APPLIES ‐ 14 Obtain monitoring information (ethnicity, race, sex) Inform applicant: Federal government requests information Inform applicant: Lender is required to note ethnicity, race, sex
IF NEW CUSTOMER ‐ Follow bank’s CIP rules 15
AS SOON AS POSSIBLE
IF RISK‐BASED PRICING ‐ Provide Credit Score Notice to each applicant 17
ADVERSE ACTION (IF APPLICABLE)
Application denied ‐ Provide Notice of Action Taken 28 No decision within 30 days ‐ Provide Notice of Action Taken Application withdrawn ‐ Indicate in initialed, dated note in file
PREPARE/GATHER DOCUMENTS FOR CLOSING (LOAN PROCESSORS)
Promissory note/Truth‐in‐Lending disclosures 29
IF LOAN IS OVER $10,000 ‐ Records must show purpose of loan 36
IF HMDA APPLIES ‐ Collect and document required data 14
IF NEW CUSTOMER OR NEW PRIVACY POLICY ‐ Privacy Notice 32
AT CLOSING
PROMISSORY NOTE/TRUTH‐IN‐LENDING DISCLOSURES ‐ 29
Signed by borrower and lender? Unsigned pages initialed by borrowers? If over $10,000, does note (or other records) show purpose of loan? 36
IF NEW CUSTOMER OR NEW PRIVACY POLICY ‐ Provide Privacy Notice 32
OTHER NOTES AND REMINDERS
If borrower is service member ‐ special rules 39
Negative information to consumer reporting agency ‐ notice to customer
NOTES AND INSTRUCTIONS
CREDIT UNION ‐ APRIL 2015 ‐ HMDA
USE THIS CHECKLIST FOR UNSECURED LOANS AND LOANS SECURED BY PERSONAL PROPERTY USE CHECKLIST 4 FOR LOANS
SECURED BY MANUFACTURED HOMES
Copyright © TTS and Anne Lolley Best‐Ever Checklists for Credit Unions April 8, 2015 For questions call 877‐778‐5192 x4 (toll‐free) 10
Use this checklist for original and refinanced loans that are:
Consumer purpose Closed-end Secured by manufactured home used as dwelling Not secured by real estate
AAPPPPLLIICCAANNTTSS
LLOOAANN NNUUMMBBEERR
1 AAPPPPLLIICCAATTIIOONN DDAATTEE
THE FOLLOWING RULES WILL NOT APPLY TO THIS LOAN:
APPRAISAL/EVALUATION RULES ENVIRONMENTAL RISK ANALYSIS
HPML APPRAISAL RULES INTEGRATED DISCLOSURES
RESPA
BUT SINCE THIS LOAN INVOLVES A DWELLING, IT COULD TRIGGER:
ABILITY‐TO‐REPAY ARM DISCLOSURES
ECOA COPY‐OF‐VALUATION REQUIREMENTS FLOOD INSURANCE (SOMETIMES) HIGH‐COST MORTGAGE RULES
HMDA HPML ESCROW REQUIREMENTS NMLSR REQUIREMENTS
RIGHT OF RESCISSION WAITING PERIODS
LOAN TYPE 2
New loan Refinancing ‐ new money Refinancing – no new money
DWELLING TYPE 4
Principal dwelling of applicant Principal dwelling of non‐applicant Not a principal dwelling
LIEN STATUS 3
First mortgage Junior mortgage
FLOOD? 23
Yes No
RIGHT OF RESCISSION? 7
Yes No
HIGH‐COST? 9
Yes No
HPML? 8
Yes No
HMDA? 10
Yes No
Flood insurance rules apply if the manufactured home cannot be quickly hauled away from encroaching flood waters
ROR will apply unless:
Loan is to buy applicant’s principal dwelling and is secured by same dwelling; or
Same‐lender refinancing with no new money
If manufactured home is consumer’s principal dwelling, determine whether any of these triggers make this a high‐cost mortgage:
High APOR High points and fees Prepayment penalties
If manufactured home is consumer’s principal dwelling, determine whether the APR exceeds the APOR by:
1.5% ‐ first mortgage 2.5% ‐ jumbo mortgage 3.5% ‐ junior mortgage
HMDA applies if loan is:
To purchase a dwelling and secured by a dwelling
A home improvement loan
A refinancing (old and new loan secured by a dwelling)
WHEN APPLICATION FORM IS PROVIDED
If (i) adjustable rate, (ii) secured by borrower’s principal dwelling and 11 (iii) greater than one year, give ARM disclosures:
Consumer Handbook on Adjustable Rate Mortgages Disclosure for each ARM program in which applicant is interested
AT APPLICATION
Obtain or prepare written application 12
Determine and document whether joint/individual credit 13
IF HMDA APPLIES ‐ 14 Obtain monitoring information (ethnicity, race, sex) Inform applicant: Federal government requests information Inform applicant: Lender is required to note ethnicity, race, sex
IF NEW CUSTOMER ‐ Follow bank’s CIP rules 15
AS SOON AS POSSIBLE
IF RISK‐BASED PRICING ‐ Provide Credit Score Notice to each applicant 17
WITHIN 3 BUSINESS DAYS AFTER APPLICATION
IF TELEPHONE APPLICATION – Provide ARM disclosures now: 11
Consumer Handbook on Adjustable Rate Mortgages Disclosure for each ARM program in which applicant is interested
IF FIRST MORTGAGE ‐ Provide ECOA copy‐of‐appraisal notice 18
PRIOR TO CLOSING
ABILITY TO REPAY ‐ 21
Using General ATR Requirements Use 8 factors Verify with 3rd party data
General Qualified Mortgage Use highest payment in first 5 years after first payment Consider/verify income/assets/debts/obligations (Use Appendix Q)
Temporary Qualified Mortgage ‐ Use GSE guidelines
Balloon Payment Qualified Mortgage Use scheduled payments . . . but no need to consider balloon payment Consider/verify income/assets/debts/obligations (Append Q not required)
Small‐Creditor Portfolio Qualified Mortgage Use highest payment in first 5 years after first payment Consider/verify income/assets/debts/obligations (Append Q not required)
FLOOD INSURANCE ‐ 23 Obtain flood hazard determination IF FLOOD HAZARD AREA ‐ give notice and get acknowledgement IF FHA AND COMMUNITY PARTICIPATES ‐ require flood insurance
CREDIT UNION ‐ APRIL 2015 ‐ HMDA
Copyright © TTS and Anne Lolley Best‐Ever Checklists for Credit Unions April 8, 2015 For questions call 877‐778‐5192 x4 (toll‐free) 11
IF FIRST MORTGAGE ‐ Deliver, mail or e‐mail copy of appraisal 18
Must be received at least 3 business days before closing (note mailbox rule) Timing waiver permitted – must be received at least 3 business days before closing
IF HIGH‐COST MORTGAGE ‐ 26 High‐cost mort disclosure (must be received 3 business days before closing) If ROR applies, give disclosure to each consumer entitled to rescind Obtain written certification of homeownership counseling
IF FIRST‐LIEN HPML – Establish escrow account (SOME EXEMPTIONS) 35
IF NEGATIVE AMORTIZATION AND FIRST‐TIME BORROWER ‐ 27 Obtain documentation showing homeownership counseling
ADVERSE ACTION (IF APPLICABLE)
Application denied ‐ Provide Notice of Action Taken 28 No decision within 30 days ‐ Provide Notice of Action Taken Application withdrawn ‐ Indicate in initialed, dated note in file
PREPARE/GATHER DOCUMENTS FOR CLOSING (LOAN PROCESSORS)
Promissory note /Truth‐in‐Lending disclosures 29
Note and mortgage must contain bank/lender name and NMLSR 29
IF LOAN IS OVER $10,000 ‐ records must show purpose of loan 36
IF RIGHT OF RESCISSION APPLIES ‐ 30
Notice of ROR (two copies for each consumer entitled to rescind) Copy of Closing Disclosure to each consumer entitled to rescind
IF HMDA APPLIES ‐ Collect and document required data 14
IF NEW CUSTOMER OR NEW PRIVACY POLICY ‐ Privacy Notice 32
WAITING PERIODS BEFORE CLOSING
Closing cannot occur until: 34
3rd business day after applicant received high‐cost mortgage disclosure
3rd business day after applicant received copy of appraisal/evaluation
SEE BOOKLET FOR DEFINITION OF “BUSINESS DAY”
AT CLOSING
PROMISSORY NOTE/TRUTH‐IN‐LENDING DISCLOSURES ‐ 29
Signed by borrower and lender? Unsigned pages initialed by borrowers? Note and mortgage contain bank/lender name and NMLSR? If over $10,000, does note (or other records) show purpose of loan? 36
IF RIGHT OF RESCISSION APPLIES ‐ 30
Notice of ROR (two copies for each consumer entitled to rescind) Copy of Closing Disclosure to each consumer entitled to rescind
IF NEW CUSTOMER OR NEW PRIVACY POLICY ‐ Provide Privacy Notice 32
AFTER CLOSING
IF RIGHT OF RESCISSION APPLIES ‐ Wait 3 business days before funding 30
NOTES AND REMINDERS
Private mortgage insurance – disclosure/termination requirements 39
Referral fee ‐ consider checklist
If borrower is service member ‐ special rules
Negative information to consumer reporting agency ‐ notice to customer
NOTES AND INSTRUCTIONS
Copyright © TTS and Anne Lolley Best‐Ever Checklists for Credit Unions April 8, 2015 For questions call 877‐778‐5192 x4 (toll‐free) 12
Use this checklist for temporary construction loans:
Consumer-purpose (applicant is a consumer, not a contractor) Closed-end (but may have multiple advances) Initial construction of applicant’s principal dwelling Temporary (anticipating permanent loan) Secured by dwelling being constructed, by current dwelling . . . or both
AAPPPPLLIICCAANNTTSS LLOOAANN NNUUMMBBEERR
AAPPPPLLIICCAATTIIOONN DDAATTEE
1
THESE RULES WILL NNOOTT APPLY:
ABILITY TO REPAY (IF 12 MONTHS OR LESS) HIGH‐COST MORTGAGE RULES HMDA
HPML APPRAISAL/ESCROW RULES _______________
BUT THESE RULES COULD APPLY:
ABILITY TO REPAY (IF MORE THAN 12 MONTHS) RESPA
LOAN TYPE 2
New loan Refinancing ‐ new money Refinancing – no new money
DWELLING TYPE 4
Principal dwelling of applicant Principal dwelling of non‐applicant Not a principal dwelling
ENVIRONMENTAL RISK ANALYSIS 5
Past and present uses _________________
___________________________________
Government contacts_________________
___________________________________
LIEN STATUS 3
First mortgage Junior mortgage
RESPA? 6 Yes No
MULTIPLE ADVANCE LOANS 37 USE APPENDIX D
RIGHT OF RESCISSION? 7
Yes No
Generally, temporary construction loans are exempt from RESPA. RESPA will apply, however, if the loan is secured by less than 25 acres and:
Term is two years or more; or
Some proceeds used (by first user) to buy the property.
When a closed‐end loan provides for multiple advances, banks must comply with TIL’s Appendix D when estimating disclosures. Under Appendix D, the lender must assume that one‐half of the commitment amount is outstanding for the term of the loan.
If this loan (i) is to build the consumer’s principal dwelling and (ii) the loan is secured by that dwelling, it is a “residential mortgage transaction” and is exempt from the ROR rules. But if the loan is secured by the applicant’s current dwelling, ROR applies, even if it is also secured by the new dwelling.
WHEN APPLICATION FORM IS PROVIDED
If (i) adjustable rate, (ii) secured by borrower’s principal dwelling and 11 (iii) greater than one year, give ARM disclosures:
Consumer Handbook on Adjustable Rate Mortgages Disclosure for each ARM program in which applicant is interested
AT APPLICATION
Obtain or prepare written application 12
Determine and document whether joint/individual credit 13
IF NEW CUSTOMER ‐ Follow bank’s CIP rules 15
AS SOON AS POSSIBLE
IF RISK‐BASED PRICING ‐ Provide Credit Score Notice to each applicant 17
WITHIN 3 BUSINESS DAYS AFTER APPLICATION
IF TELEPHONE APPLICATION – Provide ARM disclosures now: 11
Consumer Handbook on Adjustable Rate Mortgages Disclosure for each ARM program in which applicant is interested
IF FIRST MORTGAGE ‐ Provide ECOA copy‐of‐appraisal notice 18
Provide Loan Estimate 19
Deliver, mail or e‐mail no later than 3rd business day after application Deliver, mail or e‐mail no later than 7th business day before closing Not required if denied/withdrawn within 3 business days
Provide list of settlement providers (if consumer can shop for provider) 19
Deliver, mail or e‐mail no later than 3rd business day after application Deliver, mail or e‐mail no later than 7th business day before closing Not required if denied/withdrawn within 3 business days
Provide Settlement Cost Booklet 19
Deliver, mail or e‐mail no later than 3 business days after application Not required if refinancing or junior lien
IF RESPA APPLIES – Provide the following disclosures: 20 List of homeownership counseling organizations Affiliated Business Arrangement Disclosure Statement (if necessary)
NOT REQUIRED IF APPLICATION IS DENIED OR WITHDRAWN WITHIN THREE BUSINESS DAYS
PRIOR TO CLOSING
ABILITY TO REPAY – ONLY IF LOAN EXCEEDS 12 MONTHS 21
Using General ATR Requirements Use 8 factors Verify with 3rd party data
General Qualified Mortgage Use highest payment in first 5 years after first payment Consider/verify income/assets/debts/obligations (Use Appendix Q)
Temporary Qualified Mortgage ‐ Use GSE guidelines
Balloon Payment Qualified Mortgage Use scheduled payments . . . but no need to consider balloon payment Consider/verify income/assets/debts/obligations (Append Q not required)
Small‐Creditor Portfolio Qualified Mortgage Use highest payment in first 5 years after first payment Consider/verify income/assets/debts/obligations (Append Q not required)
CREDIT UNION ‐ APRIL 2015 ‐ HMDA
INDICATE ONE TYPE
Copyright © TTS and Anne Lolley Best‐Ever Checklists for Credit Unions April 8, 2015 For questions call 877‐778‐5192 x4 (toll‐free) 13
FLOOD INSURANCE ‐ 23
____ Obtain flood hazard determination ____ IF FLOOD HAZARD AREA ‐ give notice and get acknowledgement ____ IF FHA AND COMMUNITY PARTICIPATES ‐ require flood insurance
APPRAISAL OR EVALUATION ‐ 24
Order new appraisal Conduct new evaluation SELECT ONE Use existing appraisal or evaluation (must verify validity)
Review appraisal or evaluation
IF FIRST MORTGAGE ‐ Deliver, mail or e‐mail copy of appraisal 18
Must be received at least 3 business days before closing (note mailbox rule) Timing waiver permitted (if received at least 3 business days before closing)
Deliver, mail or e‐mail Closing Disclosure 19
Must be received no later than 3 business days before closing (note mailbox rule)
IF NEGATIVE AMORTIZATION AND FIRST‐TIME BORROWER ‐ 27 Obtain documentation showing homeownership counseling
Provide revised Loan Estimate (if necessary) 19
Permitted if changed circumstances/consumer request/Loan Estimate expired Only if exceeds tolerance Deliver, mail or e‐mail within 3 business days after receiving information Must be received no later than 4 business days before closing (note mailbox rule)
Provide corrected Closing Disclosure (if necessary) 19
If APR/loan product/prepayment penalty – received 3 business days before closing Otherwise – may provide at closing
ADVERSE ACTION (IF APPLICABLE)
Application denied ‐ Provide Notice of Action Taken 28 No decision within 30 days ‐ Provide Notice of Action Taken Application withdrawn ‐ Indicate in initialed, dated note in file
PREPARE/GATHER DOCUMENTS FOR CLOSING (LOAN PROCESSORS)
Promissory note/Truth‐in‐Lending Disclosures 29
Note and mortgage must contain bank/lender name and NMLSR 29
IF RIGHT OF RESCISSION APPLIES ‐ 30
Notice of ROR (two copies for each consumer entitled to rescind) Copy of Closing Disclosure for each consumer entitled to rescind
IF RESPA APPLIES ‐ Initial Escrow Account Disclosure (if escrow) 31
IF NEW CUSTOMER OR NEW PRIVACY POLICY ‐ Privacy Notice 32
WAITING PERIODS BEFORE CLOSING
Closing cannot occur until: 34 7th business day after delivering/mailing initial Loan Estimate
4th business day after consumer received revised Loan Estimate
3rd business day after applicant received high‐cost mortgage disclosure
3rd business day after applicant received copy of appraisal/evaluation
3rd business day after applicant received initial Closing Disclosure
3rd business day after applicant received corrected Closing Disclosure (if correction deals with APR/loan product/prepayment penalty)
SEE BOOKLET FOR DEFINITION OF “BUSINESS DAY”
AT CLOSING
PROMISSORY NOTE/TRUTH‐IN‐LENDING DISCLOSURES ‐ 29
Signed by borrower and lender? Unsigned pages initialed by borrowers? Note and mortgage contain bank/lender name and NMLSR?
IF RIGHT OF RESCISSION APPLIES ‐ 30
Notice of ROR (two copies to each consumer entitled to rescind) Copy of Closing Disclosure to each consumer entitled to rescind
IF RESPA APPLIES – Initial Escrow Disclosure (at closing or within 45 days) 31
IF NEW CUSTOMER OR NEW PRIVACY POLICY ‐ Provide Privacy Notice 32
AFTER CLOSING
IF RIGHT OF RESCISSION APPLIES ‐ Wait 3 business days before funding 30
Provide corrected Closing Disclosure (if necessary) 19
If settlement event results in change to amount paid by consumer Deliver/mail/e‐mail within 30 calendar days after receiving information
NOTES AND REMINDERS
Private mortgage insurance – disclosure/termination requirements 39
Referral fee ‐ consider checklist
Borrower is a service member ‐ special rules
Negative information to consumer reporting agency ‐ notice to customer
NOTES AND INSTRUCTIONS
Copyright © TTS and Anne Lolley Best‐Ever Checklists for Credit Unions April 8, 2015 For questions call 877‐778‐5192 x4 (toll‐free) 14
Use this checklist for:
Consumer-purpose Closed-end Non-construction temporary loan Secured by real estate and old/new dwelling Examples: HHoommee iimmpprroovveemmeenntt llooaannss and "sseeaassoonniinngg" loans
AAPPPPLLIICCAANNTTSS
LLOOAANN NNUUMMBBEERR
AAPPPPLLIICCAATTIIOONN DDAATTEE
1
WILL NOT APPLY
ABILITY TO REPAY (IF 12 MOS OR LESS) HMDA
HPML ESCROW (IF 12 MOS OR LESS) RESPA
LOAN TYPE 2
New loan Refinancing ‐ new money Refinancing – no new money
DWELLING TYPE 4
Principal dwelling of applicant Principal dwelling of non‐applicant Not a principal dwelling
ENVIRONMENTAL RISK ANALYSIS 5
Past and present uses _______________________
_________________________________________
Government contacts_______________________
_________________________________________
LIEN STATUS 3
First mortgage Junior mortgage
RIGHT OF RESCISSION? 43
Yes No
HIGH-COST? 9
Yes No
HPML? 8
Yes No
MULTIPLE ADVANCE LOANS 39 USE APPENDIX D
If this loan is secured by the applicant’s current dwelling, ROR applies, even if it is also secured by the new dwelling (in the case of a bridge loan).
If loan is secured by consumer’s principal dwelling, determine whether any of these triggers will make this a high‐cost mortgage:
High APOR High points and fees Prepayment penalties
If loan is secured by consumer’s principal dwelling, determine whether the APR exceeds the APOR by:
1.5% ‐ first mortgage 2.5% ‐ jumbo mortgage 3.5% ‐ junior mortgage
Some home improvement loans provide for multiple advances. In such a case, lenders must comply with TIL’s Appendix D when estimating disclosures. Under Appendix D, the lender will assume that one‐half of the commitment amount is outstanding for the term of the loan.
WHEN APPLICATION FORM IS PROVIDED
If (i) adjustable rate, (ii) secured by borrower’s principal dwelling and 11 (iii) greater than one year, give ARM disclosures:
Consumer Handbook on Adjustable Rate Mortgages Disclosure for each ARM program in which applicant is interested
AT APPLICATION
Obtain or prepare written application 12
Determine and document whether joint/individual credit 13
IF NEW CUSTOMER ‐ Follow bank’s CIP rules 15
AS SOON AS POSSIBLE
IF RISK‐BASED PRICING ‐ Provide Credit Score Notice to each applicant 17
WITHIN 3 BUSINESS DAYS AFTER APPLICATION
IF TELEPHONE APPLICATION – Provide ARM disclosures now: 11
Consumer Handbook on Adjustable Rate Mortgages Disclosure for each ARM program in which applicant is interested
COPY‐OF‐APPRAISAL NOTICE ‐ Provide copy‐of‐appraisal notice 18 Only required if HPML or non‐HPML first mortgage
Provide Loan Estimate 19
Deliver, mail or e‐mail no later than 3rd business day after application Deliver, mail or e‐mail no later than 7th business day before closing Not required if denied/withdrawn within 3 business days
Provide list of settlement providers (if consumer can shop for provider) 19
Deliver, mail or e‐mail no later than 3rd business day after application Deliver, mail or e‐mail no later than 7th business day before closing Not required if denied/withdrawn within 3 business days
Provide Settlement Cost Booklet 19
Deliver, mail or e‐mail no later than 3 business days after application Not required if refinancing or junior lien
PRIOR TO CLOSING
ABILITY TO REPAY ‐ ONLY IF LOAN EXCEEDS 12 MONTHS 21
Using General ATR Requirements Use 8 factors Verify with 3rd party data
General Qualified Mortgage Use highest payment in first 5 years after first payment Consider/verify income/assets/debts/obligations (Use Appendix Q)
Temporary Qualified Mortgage ‐ Use GSE guidelines
Balloon Payment Qualified Mortgage Use scheduled payments . . . but no need to consider balloon payment Consider/verify income/assets/debts/obligations (Append Q not required)
Small‐Creditor Portfolio Qualified Mortgage Use highest payment in first 5 years after first payment Consider/verify income/assets/debts/obligations (Append Q not required)
FLOOD INSURANCE ‐