Topic: Consumer Leasing
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We are an Illinois-chartered savings bank, and we are considering changing the fee we charge consumer borrowers for a mortgage loan modification. Typically, borrowers request these modifications to reduce the interest rate or change the term of their loan instead of doing a full refinance. These modifications are not for loss mitigation purposes. Are there any restrictions on the method we use to calculate these modification fees, and are there any regulatory issues (such as fair lending concerns) that we need to consider? We would use the same method to calculate the modification fees for all borrowers.
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Generally, a savings bank may charge a mortgage loan modification fee agreed to by the borrower, and we are not aware of any restrictions on the calculation method. We are not aware of fair lending concerns if you use the same method to calculate all borrowers’ modification fees. The Illinois Savings Bank Act permits a…
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Are we required to issue delinquency notices for commercial, residential real estate, and consumer non-real estate loans? If there are multiple borrowers on these accounts, must each borrower receive a delinquency notice?
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Yes, we believe that there are federal delinquency notice requirements for residential real estate and consumer non-real estate loans that your bank must comply with, but we do not believe that there are similar requirements under Illinois law or for commercial loans. We do recommend reviewing your loan agreements for each type of loan to…