About the Author
Karen Deis is publisher of www.MortgageCurrentcy.com, the only e-zine that explains the mortgage rules and regulation changes in plain language so you can easily understand how they affect you and your loan files.
A loan application requires 6 pieces of information in order to trigger the GFE and disclosures:
1. Property Address
2. Loan Amount sought
3. Monthly Income
4. Estimated Value
5. Borrower Name
6. Social Security Number to pull credit report
Here’s a link to the “official” rule. Go to “Definitions” to start on page 2 section 3500.2 (b) Application means… Use the search feature for pdf documents and search for “application,” and it will direct you throughout the document to further your understanding.
Without all these 6 items you do not have an application, and therefore disclosure is not required. This is useful for pre-approvals — no address or TBD address means that you can pull credit and evaluate income (all 5 other pieces of info deemed necessary to approve a loan). For refinance inquiries — if they apply, it is a full application and is subject to disclosure because you will automatically have all 6 required pieces of information.
For online applications, the clock starts when the lender receives notification of the application — usually those systems send an email to the lender. More than one person should receive this notice in order to avoid missing the email while on vacation or otherwise out of the office. Online applications are not specifically addressed Online applications are not specifically addressed or treated differently than any other form of application (telephone, face-to-face, or mail) in the regulations. Once you are notified or receive the application, the clock starts ticking for proper disclosure. In the above pdf, search “days” and you will be directed to several points of information regarding the timing.
In addition, go to www.mortgagecurrentcy.com and search for “RESPA” — this will provide you with articles written about the topic. You can also look in the compliance section for various articles regarding different compliance rules.sed or treated differently than any other form of application (telephone, face-to-face, or mail) in the regulations. Once you are notified or receive the application, the clock starts ticking for proper disclosure. In the above pdf, search “days” and you will be directed to several points of information regarding the timing.
I understand that to have an application you have to have all 6 points. So missing an address, you do not have an application.
However, both M&T and US Banks (so far) are not buying my loans because i didn’t send out a Gd FTH with a signed 1003 on
a TBD. I didn’t think I had to until I had a property.
they BOTH claim that a signed 1003 is sufficient to determine an application EVEN THOUGH I HAVE NO PROPERTY ADDRESS?
Where do they get this? I don’t see where this JUMP is warranted without an address; a signed 1003 wipes out all the rules of the 6 items?
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If you have the 6 pieces of information “verbally” over the telephone and run the credit report, no documentation to check income or assets, is this considered a application and be HMDA reported. I know it is for reg b but what about HMDA
Although short-term loans could be applied both web offline, But mostly,
the preference is given for the online procedure that
doesn’t require much time. They will completely understand any organization’s lending policy and they are well aware of what pitfalls to look out for.
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The link in this page to the HUD site does not work and I can not find the rule you are quoting. Can you please send me the link? Thank you
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