Topic: Mortgage Loans
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We want to implement three new fees for all of our loan customers: an NSF fee, an expedited payoff fee (for sending payoff statements via fax or courier), and a check-by-phone payment fee. How should we disclose these new fees? We are considering doing this for all of the types of consumer loans that we make.
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In general, if you charge any new types of fees, your customers must agree to them. First, you should check your controlling loan agreements for provisions that might apply to the unilateral imposition of these new fees, as well as for any terms regarding the disclosure of new fees. It may be that there are…
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Are there any additional requirements for cosigners on a home mortgage loan other than providing the initial “Notice to Cosigner”? Are you required to send the co-signer reminder notices for past due payments?
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Illinois law prescribes a notice for loan cosigners and limits the actions you may take regarding a cosigner in the event of a default or delinquency by the primary obligor. The Consumer Fraud and Deceptive Business Practices Act requires notification of a cosigner by first class mail of any delinquency or default by the primary…
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We cap the amount of compensation a loan originator can earn for a loan that is held in portfolio, but we do not apply the cap for loans that are sold. Does this violate the loan originator compensation rules? Our loan originators do not have lending authority and do not decide whether loans are held in portfolio or sold on the secondary market.
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We believe that this policy would violate the loan originator compensation rules, as your institution is varying loan originator compensation based on a proxy for a term of the mortgage loan transactions. Regulation Z prohibits loan originator compensation in connection with a consumer credit transaction secured by a dwelling that is based on a “term…