If the bank takes a property into Other Real Estate Owned, must the bank buy/ maintain flood insurance on the property?
For risk management and safety and soundness purposes, a bank with other real estate owned (OREO) in flood hazard areas should purchase flood insurance policies on its OREO property. However, it is not required to do so by regulation.
Other Real Estate Owned— An institution with other real estate owned (OREO) in SFHAs should, as a
prudent practice, purchase flood insurance policies on its OREO property, although it is not required to do so by the regulations.
We used to say if the funds were improving the commercial part of the building with no benefit to the dwelling it was not reportable--in 2018 is a loan for improving a veterinary clinic that is under the same roof as an individual’s home reportable?
For mixed-use buildings, the closed-end mortgage loan would be reportable if the proceeds go toward either:
1. improving the whole property, or
2. primarily improving the residential portion of the property.
For example, if the loan were to replace the A/C for the whole building, or replace the floors on the residential side, then it would be reportable:
A closed-end mortgage loan or an open-end line of credit to improve a multifamily dwelling used for residential and commercial purposes (for example, a building containing apartment units and retail space), or the real property on which such a dwelling is located, is a home improvement loan if the loan's proceeds are used either to improve the entire property (for example, to replace the heating system), or if the proceeds are used primarily to improve the residential portion of the property. An institution may use any reasonable standard to determine the primary use of the loan proceeds. An institution may select the standard to apply on a case-by-case basis. See comment 3(c)(10)-3.ii for guidance on loans to improve primarily the commercial portion of a dwelling other than a multifamily dwelling.
I have a loan for $200,000 to purchase a principal dwelling. It is unsecured. Do I need a TIL, or since it's out of the threshold, is it exempt from the regulations?
Because the loan is not secured by real property and is over the current Regulation Z threshold of $55,800, it is exempt from Regulation Z, meaning no TRID or TIL forms would be required. Additionally, the loan would be exempt from RESPA and HMDA because it is unsecured. Keep in mind, however, that you will still need to abide by safety and soundness concerns, the bank’s underwriting policy, and any other statutory or regulatory concerns that might apply (ECOA/fair lending, FCRA, e-SIGN, state law, etc.)
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