Mortgages Analyzed
Mortgages Analyzed
Mortgages Analyzed
 
Regulation B Related Documents

Regulation B (ECOA) Related Documents

Regulation B Related Documents

CFPB Regulation B (12 CFR 1002), which implements Equal Credit Opportunity Act (ECOA), requires mortgage lenders to make disclosures when soliciting and originating mortgage loans. The table below lists the Regulation B related documents and disclosures that are applicable for consumer purpose residential mortgage loans. The list is not exhaustive since additional or alternate documentation may be applicable or used in certain circumstances.

Source :www.MortgagesAnalyzed.com
 
Document Type Required Applicability   Citation     E-Sign   Form
Application Form Form Yes All mortgage loans §1002.4 (c) N.A. Written
Notice of Action Taken, which can be: Disclosure Yes All mortgage loans §1002.9 (a) Yes Written
Statement of Specific Reasons or the Action Taken Disclosure Yes Declined applications §1002.9 (a) (2) Yes Written
ECOA Notice Disclosure Yes Declined applications §1002.9 (b) (1) Yes Written
Appraisal Disclosure Disclosure Yes First lien loan applications for which an appraisal was developed §1002.14 (a) (2) Yes Written
Appraisal or Other Written Valuations Report Yes First lien loan applications for which an appraisal was developed §1002.14 (a) (1) Yes Written
Appraisal Waiver Letter Letter No. For optional use to demonstrate compliance First lien loan applications for which an appraisal was developed §1002.14 (a) (1) Yes Oral or Written
Acknowledgement of Receipt of Appraisal Letter No. For optional use to demonstrate compliance First lien loan applications for which an appraisal was developed N.A. N.A. Oral or Written
Source :www.MortgagesAnalyzed.com
 

Disclosures Required on Application Form

As per Regulation B the following disclosures are required to be included in the application form.

    Type     Disclosure      Citation     
Self-Test The following disclosures are required when the lender is inquiring about the race, color, religion, national origin, or sex of an applicant or any other person for the purpose of self-test that meets the requirements of §1002.15.
  • The applicant will not be required to provide the information.
  • The lender is requesting the information to monitor its compliance with the Federal Equal Credit Opportunity Act.
  • Federal law prohibits the creditor from discriminating on the basis of this information, or on the basis of an applicant's decision not to furnish the information.
  • If applicable, certain information will be collected based on visual observation or surname if not provided by the applicant or other person.
§1002.5(b)(1)
Sex If the application form is requesting an applicant to designate a title on the application form (such as Ms., Miss, Mr., or Mrs.), then the lender must disclose on the application form that the designation of a title is optional. §1002.5(b)(2)
Marital Status A lender may inquire about the applicant's marital status by using only the terms married, unmarried, and separated. A lender may disclose that the category unmarried includes single, divorced, and widowed persons. §1002.5(d)(1)
Disclosure about income from alimony, child support, or separate maintenance If the lender inquires whether income stated in an application is derived from alimony, child support, or separate maintenance payments, then the lender must disclose to the applicant that such income need not be revealed if the applicant does not want the lender to consider it in determining the applicant's creditworthiness. §1002.5(d)(2)
Government Monitoring Information (HMDA) The lender must inform the applicant(s) that the information regarding ethnicity, race, sex, marital status, and age is being requested by the Federal Government for the purpose of monitoring compliance with Federal statutes that prohibit creditors from discriminating against applicants on those bases. The creditor shall also inform the applicant(s) that if the applicant(s) chooses not to provide the information, the creditor is required to note the ethnicity, race and sex on the basis of visual observation or surname. §1002.13(c)
Source :www.MortgagesAnalyzed.com

In terms of the format of the application disclosures, §1002.4 states:

  • These disclosures need not be retainable.
  • If the application form is provided electronically, then these disclosures can be provided without regard to provisions of the E-Sign Act.
Source :www.MortgagesAnalyzed.com

General Requirements for Reg B Disclosures

Form of Disclosures

Any disclosure required by regulation B that is provided in writing, must be provided in a clear and conspicuous manner. Except for disclosures required on an application (§1002.5 and §1002.13), the disclosures should be in a form that the applicant may retain.

Disclosures in Electronic Form

Any Regulation B disclosure that is required to be provided in writing can be provided to the applicant in electronic form as long as it provided in compliance with the requirements of E-Sign Act.

Foreign-Language Disclosures

Disclosures may be made in languages other than English, provided they are available in English upon request.

Record Retention

The general record retention requirement of Regulation B for consumer purpose loans is to maintain the application, action taken, and other related information and documents for at least 25 months. Our recommendation is to retain the information in the loan file for as long as the loan is current. In case of cancelled, withdrawn, and declined loan applications, the lender should retain the documents for at least 25 months from date of action taken. Additional record retention requirements may apply in cases of enforcement proceedings, commercial purpose applications, self-tests, and other cases.

Source :www.MortgagesAnalyzed.com

External Links

  1. CFPB Regulation B

Updated: Jun 15, 2014

Comments

comments powered by Disqus
CFPB Regulation B requires mortgage lenders to make disclosures when soliciting and originating mortgage loans
Finance
Know all there is to know about the US Mortgage Industry. We help you to make a well informed decision.
Finance
Loan Products
Confused about the choosing right loan product for you? We help you decide the loan product that suits your needs best.
Loan Products
Documents
Here you will find all there is to know about the forms, papers & documents required for Home Loan Mortgage and much more.
Documents
Regulation
List of all the Regulations related to US Mortgage Industry.
Regulations