Topic: Real Estate Settlement Procedures Act (RESPA)
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Under the Mortgage Escrow Account Act, we must notify a customer 45 business days after paying property taxes, but we also can send an alternative annual notice. Will we meet the annual notice requirement by sending the annual escrow account statement required by RESPA, since it includes our contact information?
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Yes, the annual escrow account statement required by RESPA should be sufficient, assuming that the contact information on the notice (such as a phone number, email address, or internet website) provides a means of accessing the required information about property tax payments. The Illinois Mortgage Escrow Account Act requires lenders to provide an annual escrow…
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What Illinois laws or regulations will affect TRID implementation?
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While there are many potential intersections between the TRID rules and Illinois law, so far we have found three areas where it is necessary to consult Illinois law in order to comply with the TRID rules: (1) Under the upcoming TRID rules, the new Closing Disclosure must state whether a consumer “may remain responsible for…
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We received a loan application from an individual who inherited an interest in a home, along with six others. The home is not subject to a mortgage. The applicant will not be living in the home but will be renting it to his son. Is this transaction exempt from RESPA and TILA, and should we report it as a purchase or a refinance for HMDA purposes?
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We believe this transaction would be exempt from both TILA and RESPA as a business purpose transaction, since the borrower will be renting out the property. For HMDA purposes, there appears to be a difference of opinion as to whether the transaction is reportable at all. It would not fall under the definition of “refinancing,”…
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An insurance company wants to pay us referral fees for referring loan customers who purchase mortgage life insurance with the insurance company. Is this a prohibited kickback? Our institution does not hold an insurance producer license.
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Yes, the referral fees would be prohibited kickbacks, because your institution does not hold an insurance producer license under Illinois law. However, with proper licensing, you may be able to accept the referral fees. The Illinois Insurance Code permits financial institutions to accept referral fees from licensed insurance companies, provided that both the financial institution…