Action Taken. Boot Camp 360 Series Presented by Kimberly Lundquist

Transcription

1 Action Taken Boot Camp 360 Series Presented by Kimberly Lundquist

2 Action Taken During the Pre-Application Process, most of the laws pertaining to real estate lending will come into play. We must be careful to gather all of the information while asking the questions in a nondiscriminatory manner. In the pre-application stages for home purchase transactions, most lenders do not actually perform prequalifications by definition, even though they refer to their process as Prequalification. Many are instead performing PREAPPROVALS, so it is important to establish and consistently follow uniform procedures for ECOA/Regulation B and HMDA/Regulation C purposes, as well as the other regulations. Consistency is the name of the game! Prequalification During the period when consumers are loan shopping, often times lenders are faced with difficulty in determining whether disclosure obligations to consumers have been triggered and determining at what point in the process they should be providing disclosures. It is during this time that lenders or mortgage brokers often choose to provide a written estimate of terms or costs BEFORE providing the Loan Estimate disclosure. There is specific language that must be included on any written estimates of this kind. The following statement must be included as per Model H-26: Your actual rate, payment and costs could be higher. Get an official Loan Estimate before choosing your loan. Sometimes, what begins with a mortgage lender providing information to a consumer to shop for a loan, can turn into an evaluation of creditworthiness and possibly an application for credit. It is important to realize that several of the regulations may apply during the inquiry stage, before application has been made by the consumer. Many lenders have chosen NOT to perform Prequalification routines however; Lenders who perform prequalifications without responsibilities for preliminary disclosures under Regulation Z, RESPA, TRID, etc. should at a minimum monitor: 1. the consistency with their own policies and procedures that have been established as to how prequalification should occur, 2. the timing when preliminary disclosure obligations to the consumer have been triggered, 3. and at what point in the process they are actually providing the disclosures. As long as prospective applicants are being encouraged to proceed, lenders have a reasonable discretion in defining what constitutes an application in accordance with ECOA/Regulation B. Of course, once a prequalification inquiry becomes an application, the appropriate regulatory requirements and disclosures become applicable. Application under ECOA/Reg B & HMDA/Reg C vs TRID & Regulation Z It is important to remember, an Application defined under ECOA/Regulation B & HMDA/Regulation C does not require 6 items to trigger lender responsibilities, like we find under TRID and Regulation Z. Under ECOA/Regulation B an Application is an oral or written request for credit that is made in accordance with procedures established by a creditor for the type of credit requested. The term does not include the use of an account or line of credit to obtain an amount of credit that is within a previously established credit limit. Procedures established refers to the actual practices followed by the creditor for making credit decisions as well as its stated application procedures. For example, if a creditor stated policy is to require all applications be in writing on the creditor s application form, but Action Taken - Boot Camp Copyright 2019 FIC Conferences, Inc. 2

3 the creditor also makes credit decisions based on oral requests, the creditor s established procedures are to accept both oral and written applications. A creditor has the latitude to establish its own application process and to decide the type and amount of information it requires from credit applicants. Under TRID & Regulation Z the lender is presumed to have an Application for initial disclosure purposes once the lender is in receipt of the following 6 items: 1. Consumer s Name 2. Monthly Income 3. Social Security Number 4. Property Address 5. Estimate of the Property Value 6. Amount of Loan being Sought When a consumer is told they DO NOT qualify (with or without a property) If after evaluating the consumer s information, the creditor decides that it will not approve the request and communicates this to the consumer, a creditor has treated a prequalification request as an Application, and it is subject to an Adverse Action Notice being provided to the consumer. Therefore, if enough information has been collected to deny a loan, and a denial has been communicated to the applicant, this interaction between a lender and prospective borrower is an application for the purposes of Regulation B. This is true, regardless of the amount of information collected by the lender, lender application procedures, fees paid to the lender, whether the prospective applicant has identified a specific property or loan amount, or whether the communication is written or verbal. Lenders may offer a PREAPPROVAL PROGRAM for Home Purchase Transactions (but they may be referring to it as PREQUALIFICATION) HMDA: If a loan applied for or originated is a home purchase loan, HMDA requires that we indicate whether the application or loan was initiated by a request for preapproval. If your institution does not have a covered preapproval program, then you will be required to enter not applicable. To determine whether your Institution has a covered preapproval program, consult Regulation C (2) and the commentary on that provision. Regulation C Definitions * * * * * * Application (1) In general. Application means an oral or written request for a home purchase loan, a home improvement loan, or a refinancing that is made in accordance with procedures used by a financial institution for the type of credit requested. (2) Preapproval programs A request for preapproval for a home purchase loan is an application under this section if the request is reviewed under a program in which the financial institution, after a comprehensive analysis of the creditworthiness of the applicant, issues a written commitment to the applicant valid for a designated period of time to extend a home purchase loan up to a specified amount. The written commitment may not be subject to conditions other than: (i) (ii) Conditions that require the identification of a suitable property; Conditions that require that no material change has occurred in the applicant s financial condition or credit worthiness prior to closing; and Action Taken - Boot Camp Copyright 2019 FIC Conferences, Inc. 3

4 (iii) Limited conditions that are not related to the financial condition or creditworthiness of the applicant that the lender ordinarily attaches to a traditional home mortgage application (such as certification of a clear termite inspection). Preapproval under HMDA/Regulation C A program may be a preapproval program for purposes of HMDA even though it is not so named. The question is whether the lender regularly uses the procedures specified in the regulation. If a lender has not established procedures like those specified in the regulation, but considers requests for preapproval on an ad hoc basis, those requests need not be treated as requests for preapproval under HMDA. Failure to establish and consistently follow uniform procedures, however, may raise fair-lending and safety-and-soundness issues. Preapproval under ECOA/Regulation B A person asks a financial institution to preapprove him/her for a loan (for example, to finance a house he/she plans to buy) and the institution reviews the request under a program in which the institution, after a comprehensive analysis of her creditworthiness, issues a written commitment valid for a designated period of time to extend the loan up to a specified amount. The written commitment may not be subject to conditions other than conditions that require the identification of adequate collateral, conditions that require no material change in the applicant s financial condition or credit worthiness prior to funding the loan, and limited conditions that are not related to the financial condition or creditworthiness of the applicant that the lender ordinarily attaches to a traditional application (such as certification of a clear termite inspection for a home-purchase loan). Preapproval Request with NO Property Identified 1. If the request for preapproval is denied, the notice of Adverse Action should be provided as soon as possible. This must be reported on HMDA as Preapproval Request Denied and retention requirements of 25 months under ECOA/Reg B are applicable. 2. If the request for preapproval is incomplete and no decision can be or has been made, the creditor should provide notice to the consumer as to the incompleteness similar to Model C-6 ECOA/Reg B. For example: After carefully reviewing your submission, it is missing information we will need in order to make a credit decision. Please provide the requested information specified below, within [30 days] of this correspondence. If you do not respond by (date), we regrettably will be unable to give any further consideration to your request. At this point, if you never hear back from them, you have no responsibilities under HMDA to report Request for Preapproval that is incomplete or withdrawn when no property has been identified. You must retain the request for credit and the written commitment and any attachments thereto, including but not limited to the Notice of Incompleteness, etc. for a period of 25 months to comply with ECOA/Reg B. 3. If the request for preapproval is approved, when a written commitment is issued to the consumer along with the conditions that must be met (i.e., the identification of a suitable property) and a deadline by which to meet them, the creditor may also provide information as to what action will be taken in the event the deadline passes and request any incomplete information necessary to proceed. Action Taken - Boot Camp Copyright 2019 FIC Conferences, Inc. 4

5 For example: Your request for credit has been preapproved however; after carefully reviewing your submission, it is missing information we will need in order to continue. Please provide the requested information specified below, within [30] days of this correspondence. If you do not respond by (date), we regrettably will be unable to give any further consideration to your request. This preapproval of a home purchase loan is conditioned on the following: 1. Identification of a Suitable Property; 2. No material change occurs or has occurred in your financial condition or creditworthiness, prior to closing; 3. Limited conditions that are not related to your financial condition or creditworthiness that we as a lender normally attach to a traditional mortgage loan application, such as a certification of a clear termite inspection, etc. At this point, if you never hear back from them, reporting of this transaction is mandatory for applications taken on or after January 1, Use code preapproval request approved but not accepted. You must retain the request for credit and the written commitment and any attachments thereto, including but not limited to the Notice of Incompleteness, etc. for 25 months to comply with ECOA/Reg B. Preapproval Request Approved & then Property Identified These are APPLICATIONS and must be reported under HMDA. If the request for preapproval is approved, a written commitment is issued and the borrower then identifies a property, but the loan fails to originate, the disposition of the type of action taken must be coded on the HMDA report. Do not use code 7 ( preapproval request denied ) or code 8 ( preapproval request approved but not accepted ), because the application has passed the preapproval stage. Applications (Not Requests for Preapproval) The dispositions used under HMDA for Applications are as follows: 1. Loan Originated 2. Application Approved but Not Accepted by Applicant 3. Application Denied 4. Application Withdrawn 5. File Closed for Incompleteness 6. Loan Purchased by your Institution 7. Preapproval Request Denied 8. Preapproval Request Approved but Not Accepted (Mandatory Reporting January 1, 2018) Use code 1 for a loan that is originated, including one resulting from a request for preapproval. For a counteroffer (you offer to the applicant to make the loan on different terms or in a different amount from the terms or amount applied for), use code 1 if the applicant accepts. Use code 3 if the applicant turns down the counteroffer or does not respond. Use code 2 when the application is approved but the applicant (or the loan broker or correspondent) fails to respond to your notification of approval or your commitment letter within the specified time. Do not use this code for a preapproval request. Action Taken - Boot Camp Copyright 2019 FIC Conferences, Inc. 5

6 Use code 4 only when the application is expressly withdrawn by the applicant before a credit decision is made. Do not use code 4 if a request for preapproval is withdrawn; preapproval requests that are withdrawn are not reported under HMDA. Use code 5 if you sent a written notice of incompleteness under section (c)(2) of Regulation B (Equal Credit Opportunity) and the applicant did not respond to your request for additional information within the period of time specified in your notice. Do not use this code for requests for preapproval that are incomplete; these preapproval requests are not reported under HMDA. Type of Action. Indicate the type of action taken on the application or loan. Do not report any loan application still pending at the end of the calendar year. You will report the application on your register for the year in which the final action is taken. Action Taken Counteroffers If an institution makes a counteroffer to lend on terms different from the applicant's initial request (for example, for a shorter loan maturity or in a different amount) and the applicant does not accept the counteroffer or fails to respond, the institution reports the action taken as a denial on the original terms requested by the applicant. Action Taken - Rescinded Transactions If a borrower rescinds a transaction after closing, the institution, on a case-by-case basis, may report the transaction either as an origination or as an application that was approved but not accepted. Action Taken - Purchased Loans An institution reports the loans that it purchased during the calendar year, but does not report loans that it declined to purchase. Action Taken Withdrawn If a credit decision has not been made and the borrower has expressly withdrawn, use the code for application withdrawn. That code is not otherwise available. Action Taken File Closed for Incompleteness vs Application Denied If a credit decision has not been made and the lender makes a condition involving submitting additional information about creditworthiness the lender needs to make a credit decision and the applicant has not responded to a request for the additional information in the time allowed, use the code for "file closed for incompleteness. If the borrower has supplied the information the lender requires for a credit decision and the lender denies the application or extends a counter-offer that the borrower does not accept, use the code for "application denied." If the borrower has satisfied the underwriting conditions of the lender and the lender agrees to extend credit but the loan is not consummated, then use the code for "application approved but not accepted." For example, if approval is conditioned on a satisfactory appraisal and, despite notice of the need for an appraisal, the applicant declines to obtain an appraisal or does not respond to the lender's notice, then the application should be coded "file closed for incompleteness." If, on the other hand, the applicant obtains an appraisal but the appraisal does not support the assumed loan-to-value ratio and the lender is Action Taken - Boot Camp Copyright 2019 FIC Conferences, Inc. 6

7 therefore not willing to extend the loan amount sought, then the lender must use the code for "application denied." Action Taken - Conditional Approvals An institution reports a denial if an institution approves a loan subject to underwriting conditions (other than customary loan-commitment or loan-closing conditions) and the applicant does not meet them. Customary loan-commitment or loan-closing conditions include clear title requirements, acceptable title insurance binder, clear termite inspection, acceptable property survey, and, where the applicant plans to use the proceeds from the sale of one home to purchase another, a settlement statement showing adequate proceeds from the sale. An applicant s failure to meet one of those conditions, or an analogous condition, causes the application to be coded approved but not accepted. Customary loan-commitment and loan-closing conditions do not include: (1) conditions that constitute a counter-offer, such as a demand for a higher down-payment; (2) Underwriting conditions concerning the borrower s creditworthiness, including debt to income and loan to value ratios; or (3) verification or confirmation, in whatever form the lender ordinarily requires, that the borrower meets underwriting conditions concerning the borrower s creditworthiness. In reviewing these reasons for disposition, it becomes obvious that the person processing the loan will be the one with the information for many of these reasons. It would be a great idea to record this in some manner at the time, to avoid the last minute battle to come up with the information all at once. Action Taken - Boot Camp Copyright 2019 FIC Conferences, Inc. 7

8 ECOA/Regulation B The purpose of the Equal Credit Opportunity Act which was implemented by Regulation B, is to promote the availability of credit to all creditworthy applicants without bias, prejudice or discrimination. This regulation also requires creditors: 1. to notify applicants of action taken on their applications; 2. to report credit history in the names of both spouses on an account; 3. to retain records of credit applications; 4. to collect information about the applicant s race and other personal characteristics in applications for certain dwelling-related loans; and 5. to provide applicants with copies of appraisal reports used in connection with credit transactions. The requirements of the Equal Credit Opportunity Act and the Fair Housing Act are so similar that even the regulators combine them for compliance examinations. These Acts together, prohibit discrimination on the basis of sex, marital status, race, color, handicap, familial status, religion, national origin, age, receipt of public assistance income, and for the good faith exercise of rights under the Consumer Credit Protection Act. The Fair Housing Act makes it unlawful for any lender to discriminate in its housing-related lending activities against any person because of race, color, religion, national origin, sex, familial status or handicap. Anyone who provides loans for housing is subject to both Acts. Financial requirements on loans will vary from place to place and transaction to transaction. What is forbidden is the imposition of different requirements and the use of standards that have a disparate effect on different borrowers. It is very difficult to pinpoint every action that could be a violation of these Acts. We will attempt to highlight some of the more easily defined actions as we go along. ECOA Notification of Action Taken 30 Days after receiving a completed application concerning the approval, counteroffer or denial of the application 30 Days after taking adverse action on an incomplete application, unless a notice of incompleteness is provided 30 Days after taking adverse action on an existing account 90 Days after notifying an applicant of a counteroffer, if applicant does not expressly accept or use the credit offered. Complete Application Lenders are required to provide notification of the action taken to the applicant within 30 days of receipt of a completed loan application (though it is free to do so at any time prior to that point). An application for which the financial institution has received all the information it regularly obtains and considers in evaluating applications for the same type and amount of credit requested; including but not limited to credit reports, verifications of employment, deposits, any additional information requested from the applicant and any approvals or reports by government agencies or other persons that are necessary to guarantee, insure, or provide security for the credit or collateral. The creditor shall exercise reasonable diligence in obtaining such information. Action Taken - Boot Camp Copyright 2019 FIC Conferences, Inc. 8

9 Incomplete Applications When an application is missing information the applicant can supply and does not provide sufficient data for a credit decision to be made so the creditor does not make one, the creditor still needs to follow up and should provide a Notice of Incompleteness, which must include at least the following: 1. Name and address of the applicant; 2. Requested information; 3. Reasonable deadline for the applicant to provide the requested information. 4. Inform the applicant that failure to provide the requested information will result in no further consideration given to the application. The written Notice of Incompleteness must be mailed within 30 calendar days of receiving an incomplete application. The creditor shall have no further obligation if the applicant fails to respond. When an application is missing information but provides sufficient data for a credit decision, the creditor may evaluate the application, make a credit decision and notify the applicant, as appropriate. 1. If the application for credit is denied, the notice of Adverse Action should be provided to the applicant. If it is provided within 3 business days of the request for credit, the lender will be relinquished of any Reg Z, RESPA, or TRID possible disclosure responsibilities. This must be reported on HMDA as Application Denied and retention requirements of 25 months under ECOA/Reg B are applicable. 2. If the application for credit is incomplete and no decision can be made, the creditor should provide notice to the consumer as to the incompleteness similar to Model C-6 ECOA/Reg B. For example: After carefully reviewing your submission, it is missing information we will need in order to make a credit decision. Please provide the requested information specified below, within [30 days] of this correspondence. If you do not respond by (date), we regrettably will be unable to give any further consideration to your request. Withdrawn Application When an applicant expressly withdraws a credit application, the creditor is not required to comply with the notification requirements, but may wish to in order to document the application being expressly withdrawn. However, the creditor must comply with the record retention requirements, that this be maintained for 25 months from the date that it is expressly withdrawn. Denied Applications In the case of the application being turned down, the creditor must provide the notice of adverse action within 30 days after receiving a completed application. A counteroffer may be provided at the same time either on a separate form or a combination form. If the credit is denied, the applicant must be given the specific reasons for the credit denial (or notice of the right to receive the reasons); in this instance the incompleteness of the application cannot be given as the reason for the denial because the institution has sufficient data for a credit decision. Action Taken - Boot Camp Copyright 2019 FIC Conferences, Inc. 9

10 Notice of Adverse Action must be in writing and must include the following: a. Name and address of the creditor; b. A statement of the action taken; c. A statement of the specific reasons for the actions or a disclosure of the applicant's right to receive the reasons within 30 calendar days if the statement is requested within 60 days of the financial institution's notification; - These reasons should be the principal reasons for taking adverse actions; i.e., statements that the adverse action was based on the financial institution's internal standards or policies are insufficient. - Disclosure of more than 4 reasons is not likely to be helpful to the applicant and therefore should be discouraged. - Statements that the adverse action was based on the applicant's failing to achieve a qualifying score on the financial institution's credit scoring system are insufficient. d. Name and address of the federal agency administering compliance with respect to the creditor. e. Name, address and phone number of a consumer reporting agency from which information was received which contributed to the financial institution's decision to take adverse action. If information from more than one agency was used in this manner, each agency's information should be similarly disclosed. (If the reporting agency is national, a toll free number should be provided.) f. A statement that the consumer reporting agency was not responsible for the credit decision. g. A notice of the consumer s right to a free copy of the credit report if requested within 60 days of receiving adverse action notice and a statement of the consumer s right to dispute inaccurate information. h. Name, address and phone number of an outside source other than a consumer reporting agency (another financial institution or creditor) if information from such a source contributed to the financial institution's decision to take adverse action. Counter Offers Counteroffers in the case of adverse action may either be offered on a separate form or on a combination form with the Notice of Adverse Action. Notice must include the following: 1. Name and address of the creditor; 2. A statement of the action taken; 3. A description of the counteroffer terms; 4. Name and address of the federal agency administering compliance with respect to the creditor. Action Taken - Boot Camp Copyright 2019 FIC Conferences, Inc. 10

11 FORM C-4 SAMPLE NOTICE OF ACTION TAKEN, STATEMENT OF REASONS AND COUNTEROFFER Date Dear Applicant: Thank you for your application for. We are unable to offer you credit on the terms that you requested for the following reason(s): We can, however, offer you credit on the following terms: If this offer is acceptable to you, please notify us within [amount of time] at the following address:. Our credit decision on your application was based in whole or in part on information obtained in a report from [name, address and [toll-free] telephone number of the consumer reporting agency]. You have a right under the Fair Credit Reporting Act to know the information contained in your credit file at the consumer reporting agency. The reporting agency played no part in our decision and is unable to supply specific reasons why we have denied credit to you. You also have a right to a free copy of your report from the reporting agency, if you request it no later than 60 days after you receive this notice. In addition, if you find that any information contained in the report you receive is inaccurate or incomplete, you have the right to dispute the matter with the reporting agency. [We also obtained your credit score from the consumer reporting agency and used it in making our credit decision. Your credit score is a number that reflects the information in your consumer report. Your credit score can change, depending on how the information in your consumer report changes. Your credit score: Date: Scores range from a low of to a high of. Key factors that adversely affected your credit score: [Number of recent inquiries on consumer report, as a key factor] [If you have any questions regarding your credit score, you should contact [entity that provided the credit score] at: Address: [Toll-free] Telephone number: ] You should know that the Federal Equal Credit Opportunity Act prohibits creditors, such as ourselves, from discriminating against credit applicants on the basis of their race, color, religion, national origin, sex, marital status, age (provided the applicant has the capacity to enter into a binding contract), because they receive income from a public assistance program, or because they may have exercised their rights under the Consumer Credit Protection Act. If you believe there has been discrimination in handling your application you should contact the [name and address of the appropriate Federal enforcement agency listed in appendix A]. Sincerely, Action Taken - Boot Camp Copyright 2019 FIC Conferences, Inc. 11

12 What is Adverse Action? 1. A refusal to grant credit in substantially the amount or on substantially the terms requested in an application, unless the creditor makes a counteroffer (to grant credit in a different amount or on other terms) and the applicant uses or expressly accepts the credit offered; or 2. A termination of an account or an unfavorable change in the terms of an account that does not affect all or a substantial portion of a class of a creditor's accounts; or 3. A refusal to increase the amount of credit available to an applicant who has made an application for an increase. What is not Adverse Action? 1. A change in the terms of an account expressly agreed to by the applicant; 2. An action or forbearance relating to an account, taken in connection with inactivity, default, or delinquency as to that account; 3. A refusal or failure to authorize an account transaction at a point of sale or loan, except when the refusal or termination or an unfavorable change in the terms of the account that does not affect all or a substantial portion of a class of the creditor's accounts, or when the refusal or denial of an application for an increase in the amount of credit available under the account; 4. A refusal to extend credit because applicable law prohibits the creditor from extending the credit requested; or 5. A refusal to extend credit because the creditor does not offer the type of credit or credit plan requested. Number of Reasons Given Court cases have held that where the applicant was given only one reason, which was proved not to be valid, that the creditor could not use other reasons known to the creditor at the time of denial. The courts have held that the fact that the creditor had this information available and did not disclose such, indicated that the creditor did not consider it to be material and lenders have been forced to make loans in these situations. More than four reasons would probably not be helpful. Record Retention Requirements A creditor must retain the required documents for a period of 25 months. In some cases, specific regulators may require retention since the last exam. In any case in which there are court proceedings, all records must be maintained until this is complete. The following should be retained: 1. the Application (and any attachments thereto) 2. the Notification of Action Taken 3. the Statement of Specific Reasons for Adverse Action 4. any Written Statement Submitted by the Applicant Alleging a Violation of this Act of this Regulation. Many lenders have developed second review programs in which applications that are likely to be denied are reviewed to ensure that all possible avenues for approval have been explored prior to formal denial. Prequalification rejections should be candidates for any internal program that takes a second look at rejected applications. Every lender should make sure that those verbal and prequalification denials are given the same consideration as more formal applications. Action Taken - Boot Camp Copyright 2019 FIC Conferences, Inc. 12

13 Quiz 1. Lenders may provide a written estimate of terms or costs to applicants BEFORE providing the Loan Estimate as long as the following model language is included: a. Your official closing costs will be provided on a settlement statement at the time of consummation of this loan. b. Your actual rate, payment and costs could be higher. Get an official Loan Estimate before choosing your loan. c. This written estimate of terms and costs is not a guarantee of your closing costs and other loan costs. 2. Notification of Action Taken must be provided within a specific number of days after the Lender has received a complete application concerning an approval, counteroffer or denial of an application. a. 3 business days b. 10 business days c. 30 days 3. When a counteroffer is provided if the applicant does not expressly accept or use the credit offered, the Notification of Action Taken must be provided within a specific number of days. a. 30 days b. 60 days c. 90 days 4. The definition of complete application found in ECOA/Reg B is as follows: a. When the Lender has received these 6 items; consumer s name, monthly income, social security number, property address, estimate of the property value and the loan amount being sought. b. When the Lender has received the information it regularly obtains and considers in evaluating applications for the same type and amount of credit requested; including but not limited to credit reports, verifications of employment, deposits, any additional information requested from the applicant and any approvals or reports by government agencies or other persons that are necessary to guarantee, insure, or provide security for the credit or collateral. c. An oral or written request for credit based on procedures established by the Lender. 5. Which of these is NOT Adverse Action? a. A refusal to grant credit in substantially the amount or on substantially the terms requested in the application, unless the creditor makes a counteroffer (to grant credit in a different amount or on other terms) and the applicant uses or expressly accepts the credit offered. b. When the applicant does not meet the required underwriting conditions provided in a Conditional Approval. c. When the applicant expressly withdraws a credit application before a credit decision has been made. 6. Lenders may offer a preapproval program for the following types of transactions: a. Home Purchase, Home Improvement, Refinances, Cash-Out Refinances b. Home Purchase & Home Improvement only c. Home Purchase only Action Taken - Boot Camp Copyright 2019 FIC Conferences, Inc. 13

14 7. ECOA/Regulation B requires certain documentation to be retained by the lender when an application fails to originate. The timeframe for record retention on these applications is as follows: a. 60 days b. 25 months c. 12 months 8. When a lender counter offers to the applicant to make a loan on different terms or in a different amount from the terms or amount the applicant applied for, if the applicant does not accept the counteroffer or does not respond, the lender has specific choices: a. Lender can provide the Adverse Action and the Counter Offer on a combination Notice of Action Taken and when the applicant does not accept the counteroffer or does not respond, the Lender has already fulfilled the responsibility for providing the Notice of Adverse Action. b. Lender can counsel the applicant and when the applicant does not accept the counteroffer or does not respond, the Lender must provide the Notice of Adverse Action within 90 days. c. Either of the above answers is correct. 9. In the case of rescindable transactions, if the borrower should exercise the right to rescind after consummation has taken place, this transaction for HMDA purposes should be reported as follows: a. It is not required to be reported. b..it may be reported as an origination or as an application that was approved but not accepted. c. It may be reported as an application withdrawn. 10. What do the following acronyms stand for? ECOA & HMDA a. Equal Credit Opportunity Act & Home Mortgage Disclosure Act b. Equal Credit Official Act & Home Mortgage Disclosure Act c.. Essential Credit Of America & Home Mortgage Department of America Congratulations! Now that you have completed this short quiz for self-assessment, please check with your administrator for the answer key along with your Certificate of Completion! For your convenience, we have already sent these to the person who signed up your Institution for this Boot Camp 360 Training. You are also welcome to send us your name, and contact information and we will happily send you the answer key along with your Certificate of Completion! David@FICconferences.com Action Taken - Boot Camp Copyright 2019 FIC Conferences, Inc. 14

15 Become a Member of the FIC Regulatory Education Alliance! $597 (1 year membership) and this is what you get! FIC Real Estate Compliance Manual ($297 value) This manual is broken down into sections to cover each of the federal regulations that effect Closed-end Residential Real Estate Lending and Compliance with those regulations. As part of the Alliance, you will receive this manual and automatic updates for one full year! In addition you will have complete access to the manual on-line 24/7! So basically you get the manual absolutely FREE! Design Your Own Webinar - Customize to Fit Your Needs! ($597 value) These customized comprehensive training webinars are geared to anyone who has been or is to be in a position where real estate compliance is an integral part of their job function. It does not matter whether your Institution is involved in Purchase Money loans, Home Equity or Refinance transactions, the basic foundations in residential real estate lending and compliance are the key to a successful process. Action Taken - Boot Camp Copyright 2019 FIC Conferences, Inc. 15

16 Thank you for your participation! Please contact us if you have any questions or need assistance. We want to be Your Partner in Compliance! if you have questions concerning the information provided! Thank you for your business and we look forward to hearing from you again soon! Kimberly Lundquist FIC Conferences, Inc N Loop 1604 W Suite San Antonio, TX Tel Fax Action Taken - Boot Camp Copyright 2019 FIC Conferences, Inc. 16