HMDA Refinance vs Cash Out Refinance

Adam Witmer
HMDA

One of the biggest challenges that came with the January 1, 2018 HMDA changes relates to the difference between a refinance and a cash-out refinance.  On the surface, it would not seem to be that difficult but the specifics can actually get quite complicated. Therefore, it is imperative that each HMDA reporter fully understand the difference between a cash out refinance and a refinance.

Understanding the Written List of Service Providers Under TRID 2.0

Adam Witmer
Regulation Z, TRID

Among the many changes in TRID 2.0 - which went into effect on October 1, 2018 - the CFPB has provided a few changes in relationship to the written provider list.  The final amendments to the written provider list are significantly better than what the CFPB originally proposed and provide creditors with guidance on how to deal with circumstances where a creditor did not provide the written list of providers or failed to disclose a required service on the list. The changes, however, can be quite confusing upon initial review. Therefore, it is important for each financial institution to fully understand the TRID 2.0 changes that relate to the written list of service providers.

Agencies Grant CIP Exemption for Insurance premium Finance Loans

Adam Witmer
BSA, Regulatory Update

On September 28, 2018, FinCEN, the OCC, Federal Reserve, FDIC, and NCUA released joint guidance which grants financial institutions an exemption from CIP requirements for loans extended to customers to facilitate purchases of property and casualty insurance policies.  The justification for this exemption is based on the fact that these types of loans present a low risk of money laundering due to their very specific purpose. Those entities that extend loans to customers for such purposes should…

A Checklist of TRID 2.0 Changes

Adam Witmer
Regulation Z, Regulatory Update, TRID

As the October 1, 2018 compliance date of TRID 2.0 is quickly approaching, it is important for each financial institution to ensure that all applicable changes to the integrated disclosure rules have been both understood and effectively implemented.  Released on July 7, 2017, the 2017 final rule (known as TRID 2.0) amends and clarifies certain mortgage disclosure provisions implemented in Regulation Z. These changes are required for any application received on or after October 1, 2018.

FinCEN Advisory on High-Risk Customers

Adam Witmer
Regulatory Update, BSA

On September 21, 2018, FinCEN released an advisory on the FATF-identified jurisdictions with AML/CFT deficiencies.   This advisory, known as FIN-2018-A004, relays information to US financial institutions regarding countries the Financial Action Task Force (FATF) has identified as having deficiencies.  FATF is an intergovernmental body comprised of…

Denial Reasons of Excessive Obligations & Insufficient Income

Denial Reasons of Excessive Obligations & Insufficient Income

Adam Witmer
Adverse Action, Regulation B

This Compliance Clip (video) discusses the difference between two denial reasons found on most adverse action notices: 1) Excessive Obligations in Relationship to Income and 2) Insufficient Income for the Amount of Credit Requested. Adam discusses why most denial forms have these two different, but distinct debt-to-income (DTI) options and explains the best practice for when to use each reason - which might not be what you think.

Adding Force Place Flood Insurance Premium to Loan Amount

Adam Witmer
Flood

When a customer doesn’t pay their flood insurance premiums and allows their flood insurance to lapse, financial institutions are required to force-place flood insurance for an appropriate amount.  While customers who allow their flood insurance coverage to lapse often do so because they can’t or don’t want to pay for such coverage, it can be difficult for financial institutions to collect for the premiums (or cost) of the force-placed flood insurance.

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