Posted by TacomaBoy on 4/4/11 5:28pm
Msg #378585
Rat Poop?
I’ve been around this industry for awhile, so I smell a RAT!
I took a signing the other day from a well know American Bank through a national escrow company. The signing job was for a "non-owner occupied property loan“, so there was no NORTC. Also, the doc package had none of the usual supporting papers for a non-owner occupied property loan. Indeed, the lender instructions even stipulated that the loan was for an owner occupied property. A simple mistake or an oversight?
When I mentioned this to the borrowers they just laughed at me and said that they've lived in their home for 15+ years. They also said there was no such discussion with anyone about the non-occupancy issue? I explained to them about the NORTC and again they simply grinned and said that canceling was not a possibility. I don't think they were part of this charade, so they were not concerned about any of the technical and/or legal stuff.
So, I documented all of the above and faxed it escrow for clarification, but I never heard a thing from anyone about all of this. My guess it that “somebody” (LO or Mortgage Management) is manipulating the deal. Perhaps its all just to skirt the required NORTC in order to fund the deal before the end of March. Maybe its a benign attempt to save the borrower’s interest rate, but I seriously doubt it comes from a position of altruism. I’m not sure if any of this stuff qualifies as fraud, but it’s sure 10+ on my “Creepiness Scale”! ;-o
Hasn’t the mortgage industry learned anything from straitening out the problems associated with the Sub-Prime mess? I guess manipulating circumstances will always be endemic with in the mortgage community.
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Reply by ReneeK_MI on 4/5/11 4:36am
Msg #378686
Certain O/O refi's are exempt from RTC
Here is the exemption rule specific to refi's:
"(2) A refinancing or consolidation by the same creditor of an extension of credit already secured by the consumer's principal dwelling. The right of rescission shall apply, however, to the extent the new amount financed exceeds the unpaid principal balance, any earned unpaid finance charge on the existing debt, and amounts attributed solely to the costs of the refinancing or consolidation. "
Complete Reg Z here: http://www.fdic.gov/regulations/laws/rules/6500-1400.html
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