Posted by MistarellaFL on 5/29/09 6:53pm
Msg #290403

FHA's having RTC waived

2 last week, 2 this week, wondering if this anyone else is experiencing this trend.

Reply by Linda_H/FL on 5/29/09 6:57pm
Msg #290404

No...haven't seen that yet...

were they distressed homeowners? Possibly time running out on them if RTC is enforced?

Reply by MistarellaFL on 5/29/09 7:04pm
Msg #290406

Re: No...haven't seen that yet...

I'm thinking that...however no one has offered that information to me.
(They are all same lender <BOA> and all same area).
I wonder because I've probably only seen it maybe 4 times in the last 6 years,
and now 4 times in about 10 days time.

Reply by notaryinmo on 5/29/09 7:02pm
Msg #290405

I had one of those just yesterday. When asked by the borrower what no RTC meant (because they had to sign for no-RTC), they asked what it meant. I explained to them that they needed to contact their loan officer - I wasn't privy to any of the agreements between them.

Reply by Linda_H/FL on 5/29/09 7:11pm
Msg #290409

I'm probably going to get clobbered for this - but - why couldn't you tell him what no RTC meant? The lender is waiving the three-day period for them to cancel the loan. Chances are if it was put to them that way they may have remembered being told this during the application and underwriting process.

What do you say if they ask "What is a Right To Cancel"?

Reply by notaryinmo on 5/29/09 7:13pm
Msg #290413

Oh - I did tell them that no RTC meant No Right To Cancel. When they asked why no RTC, I told them they'd need to contact their LO. Sorry for not explaining properly when I posted.

Reply by Linda_H/FL on 5/29/09 7:14pm
Msg #290414

Ah..okay...gotcha...:) n/m

Reply by sue_pa on 5/29/09 7:12pm
Msg #290411

I see it quite often - right now, National City is the most frequent that I'm seeing.

Reply by NH Loan Processing Center on 5/29/09 7:17pm
Msg #290418

You have seen more in the last two weeks than I have in the last five years! I used to see the RTC waived once in a while when I worked for a lender that did a lot of portfolio subprime loans. The only legal way to do it is if there is a bonafide need for immediate funding (i.e. imminent forelcosure auction) and the borrower must request it at the time of closing, at which point they write a hardship letter on the spot then send it to the lender for review. It cannot be planned in advance or the lender could get left holding a hot potato, unless the rules have relaxed in the last few years.

Of course, the lender usually picked up on hints that such a request is forthcoming. As a notary you do not need to concern yourself with the legalities. It would seem that the lender might ask you to wait for additional docs required which would increase your time at the table. Did anything like that happen?

Reply by sue_pa on 5/29/09 7:37pm
Msg #290429

A few years ago there was a lender that had EVERY borrower I signed for them waive their 3 day RTC - they were all FHA. There was a piece of notebook paper in the package (overnighted docs back then). There was a typed letter. Borrowers had to hand copy the letter word for word on the notebook paper. I had to call when I was finished so they could fund the loan the same day on my say so that everything was signed. The hardship ... the additional month's interest.

Reply by MistarellaFL on 5/29/09 7:48pm
Msg #290434

Sue: The hardship ... the additional month's interest.

That is what I was REALLY wondering.
The ones I've seen previously, the brws were all mouth telling me about how this would
"rescue" them out of their situation, but not this recent batch. These folks just don't seem
as desperate and I believe were current with their mortgages.

Reply by NH Loan Processing Center on 5/29/09 7:57pm
Msg #290437

That lender was playing with fire! The fact that they had them copy the letter instead of signing the provided letter indicates they were aware of their complicity. The only hardship I ever saw approved would be an auction scheduled before the rescission date. Anything short of losing their home would not be acceptable.

The situations people are talking about in this thread are a surprise to me. I always considered the RTC to be a sacred thing, but then I also thought the Do Not Call registry would stop my junk phone calls also. Maybe the RTC is losing its teeth? I do not know all the legal ramifications, but it is my understanding if a borrower loses out on a rescission day they basically have the life of the loan to change their mind in civil court.

Reply by Gary Boehm on 5/30/09 8:59am
Msg #290492

FHA's having RTC waived

Here in Ohio the property owner still has 30 days AFTER the auction to 'recover' the property. A lot of people are in denial of losing their home right up to the auction date anyway. So they could actually wait until during that 30 day period to get a new loan (for the full amount of back payments, fees, etc.). Of course if THAT 30 days is up within one or two days of the signing then the RTC might have to be waived...?

Reply by LynnNC on 5/29/09 7:21pm
Msg #290422

I had distressed borrowers this week that wanted the RTC waived because the disbursement date would cause them to be 90 days late...the lender couldn't get his act together and have the loan fund before month-end. Come to find out NC does not allow the RTC to be waived, so now their credit will be skewered.

Reply by dickb/wi on 5/29/09 7:43pm
Msg #290432

i didn't think that respa allowed waiver unless....

it was an emergency or medical reason..........

Reply by GA/Atty on 5/29/09 7:25pm
Msg #290425

As far as I know it can't be "waived" -

I expect the loans you have been closing with no RTC have simply fallen under one of the exceptions in the law - where RTC's have never been required.

The reason you may be seeing it more lately is because lenders are offering their customers low or no cost refi's at a lower rate in an effort to keep them from shopping around and switching, and many loans done under these circumstances are not required to have any recission period.

Reply by MistarellaFL on 5/29/09 7:45pm
Msg #290433

Re: As far as I know it can't be "waived" -

Nope, Toby.
They can waive their RTC under special circumstances per Reg. Z § 226.23
I've just seen as many in the last 10 days as I have in the last 6 years.
Just curious as to if others were seeing an increase.

Reply by Ali/IL on 5/29/09 7:54pm
Msg #290435

Re: As far as I know it can't be "waived" -

I have. Same lender.

Reply by GA/Atty on 5/29/09 8:45pm
Msg #290450

Referring to the "personal financical emergency" waiver? n/m

Reply by ReneeK_MI on 5/29/09 8:05pm
Msg #290441

Re: As far as I know it can't be "waived" -

This is what I'm thinking, too - streamlines with no increase to the lien, lesser interest rates.

I have never, ever seen an RTC waived under conditions where an RTC would be required - this is totally blowing my mind.

Reply by Ali/IL on 5/29/09 8:14pm
Msg #290444

Re: As far as I know it can't be "waived" -

The one I had wife and husband were in different states. It was a split signing. I called regarding the rtc that was in package. I was told by title company that it was being waived. The borrower called his loan officer and was told to date it for that day.

Reply by JanetK_CA on 5/30/09 2:52am
Msg #290481

Streamlines

Yep, all the ones I've seen have been streamline mortgages with the same lender. But some of the packages sure didn't seem "streamlined"!

Reply by bfd110_IN on 5/29/09 9:56pm
Msg #290465

No RTC is becoming common practice with lenders

If a customer is refinacing with the same lender and is either reducing rate or reducing term AND no additional funds are being given back to the borrower, then some lenders have elected to no have a RTC. The pretense is that the loan is bettering the borrower. NOT all lenders do this but I have alot of local banks that are doing this. There isnt a emergency situation. I can't speak for for other states but in INDIANA this is allowed.

Reply by GA/Atty on 5/29/09 10:44pm
Msg #290477

There never has been an RTC on those kinds of loans

I think the original poster is referring to the personal financial emergency exception where an RTC would be required otherwise.

Reply by Glenn Strickler on 5/29/09 10:27pm
Msg #290472

Were they purchases?

None of the FHA purchases I have done have RTC's, just the refi's

Reply by Teddog/CO on 5/30/09 5:40am
Msg #290483

Have not seen RTC waived on any that I have done. At least in the last week.

Reply by BrendaTx on 5/30/09 8:49am
Msg #290490

Re: FHA's having RTC waived - question

Isn't there something about if you modify or refinance with the same lender the RTC can be waived? My brain fails me.

Reply by Linda_H/FL on 5/30/09 8:51am
Msg #290491

Re: FHA's having RTC waived - yep

"The right of rescission does not apply to:

a) A refinancing or consolidation by the same creditor already secured by the consumer’s principal dwelling. CLOSED END LOANS ONLY. [§226.23(f)(2)-page 6666.05]

i) The right of rescission shall apply, however, to the extent the new loan amount exceeds the old loan payoff (principle and interest) and closing costs.

ii) New money includes loans refinanced by the same bank that were not previously secured by the borrowers home. [Commentary to §226.23 (a)(1) #5 – page 6960.01] iii) Open end loans (Home Equity Lines of Credit) always require a right of rescission. There is no exception for a refinancing even if there is no new money."

Reply by MikeC/NY on 5/30/09 6:09pm
Msg #290535

Are these mods? If it's the same lender and the loan amount is not being increased, there's no RTC.

Reply by NCLisa on 5/31/09 11:38pm
Msg #290619

Waiving RTC so they don't have to pay the

additional 1 month interest on the payoff loan. They do this when they close the loan after the last day to close and fund in the same month. If the payoff on the old fha loan isn't in the payoff dept. by 2pm on the 1st of the month, then the borrower has to pay an additional 1 months worth of interest. The lenders want to get these loans out of their que's and done with because they are so far behind. They don't want to wait until the end of next month to get them closed. It is usually the lenders fault that the loan didn't close on time. Paying that additional months interest is a reasonably considered a hardship too.

It is also done to stop a loan from a foreclosure auction.