Topic: Mortgage Loans
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Does Illinois law permit a purchaser of abandoned real property to take title free of any party’s redemption rights?
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Illinois law only provides for a shortened redemption period for abandoned properties; the redemption period expires thirty days after the judgment of foreclosure (rather than three months). 735 ILCS 5/15-1603(b)(4).
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Does Illinois require that we provide mortgage loan applicants with a mortgage commitment letters? Do they need to be signed by the borrower(s)?
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We believe that Illinois law would require a mortgage commitment letter. 205 ILCS 5/48.2. They are not typically signed by borrowers.
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Does Illinois law require that we mail out loan maturity or payoff notices?
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For open-end credit, Regulation Z requires that you include any loan payments on periodic statements. 12 CFR 1026.7(a)(3). Otherwise, we are not aware of any federal or Illinois laws that would require you to send a notice when a loan matures or when a customer makes a payment on a loan. We do recommend that…
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Could we add a sentence to the notice required under the Mortgage Act explaining that the borrower is responsible for recording the mortgage release? Many customers are confused by the wording of the statutory notice, which can be read to state that the bank will be recording the release.
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The Illinois Mortgage Act requires that you print the required notice on the face of the release of the mortgage — the “instrument in writing releasing such mortgage” that you are required to deliver to the borrower after you have received full satisfaction and payment. 765 ILCS 905/2. That section contains no provision requiring that…
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Are we allowed to charge a payoff processing fee on mortgage loans?
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We do not believe that there is any restriction on charging a payoff processing fee, on the condition that the customer contracted to pay such a fee in your loan agreement. Section 4.1 of the Interest Act appears to prohibit such fees on revolving credit lines, as it states that lenders must pay “all expenses,…
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Does the law that prohibits mortgage brokers from originating no income verification loans apply to a bank that is originating FHA No Credit Check Streamline Refinances?
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The law you refer to, Section 5-6 of the Illinois Residential Mortgage License Act of 1987, includes an exemption for banks. 205 ILCS 635/1-3(a)
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Do we need to issue a good faith estimate (GFE) if a customer completes a refinancing application but wants to delay the closing until interest rates drop?
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Due to the wording of the RESPA regulations, we believe it would be best to send such customers a GFE, even if customers say that they do not intend to move forward on an application. Under Section 3500.7, a lender must send a GFE after it “receives an application, or information sufficient to complete an…
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If we received a loan application that does not include a loan amount or an estimate of the value of the property to be a purchased, is that application considered complete? If so, do we have to issue a GFE?
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Without an estimate of the value of the property and the mortgage loan amount sought, the information you received from the customer is not sufficient to constitute an application. The RESPA regulations state that an “application” must include, in addition to the information you were provided, “an estimate of the value of the property, the…
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Is there a requirement to put the creditor’s name at the top of all loan applications?
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While you may be required to disclose the creditor’s name to customers, we are not aware of any requirement that a creditor would have to disclose its name on loan applications. For example, if the Truth in Lending Act applies to a loan, Regulation Z requires every creditor to disclose its identity on closed-end credit…
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What are the restrictions on giving incentive pay to our lenders?
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Regulation Z’s loan originator compensation rules prohibit certain incentive payments to loan originators as to closed-end consumer loans secured by dwellings, but it also identifies several permissible compensation methods. Otherwise, we are not aware of any rules that would restrict incentive compensation for other types of loans. Under Regulation Z, loan originators may not receive…