TOPIC: Truth in Lending

VA - Allocating Seller Credits

Person at a bank ($898MUSA)
A purchase agreement states that a seller's credit will be provided as either a percentage or specific dollar amount.   Since the VA  indicates that the Seller credits must be entered in the "Seller-Paid" column on the Closing Disclosure as opposed to a lump sum credit in Section L, should the applicable seller-paid fees be included in the APR calculation as a finance charge and subtracted from the amount financed?

Has anyone received direction from the VA?  The circular does not address the impact to the APR.

Also, can you provide your loan origination system and briefly state how it handles a seller credit when applied to a borrower obligated fee? 

VA Circular 26-17-11 #2 states that
Seller credits must be entered in the "Seller-Paid" column, 
Regulation Z

General seller credits are to be disclosed either as a lump sum credit on the Closing Disclosure in section L per §1026.38 or be attributable to a specific loan cost reflected in the Closing Disclosure on page 2. 

Those seller-paid prepaid finance charge fees need to be considered in the calculation of the finance charge and APR per 1026.4(c)(5), comment 1 since the consumer is legally bound to the creditor for the charge.  An agreement between the seller and buyer for credits is an agreement between those parties and does not impact the legal obligation between the borrower and the creditor (the buyer is still paying them indirectly through negotiations with the seller).   

    LaserPro, LOC Account Opening Disclosure Table Challenges

    Director at a bank ($253MUSA)
    Good morning, setting up a basic personal LOC in LaserPro and running into issues.  Has anyone else run into a challenge getting LaserPro to show the APR in 16-point font on the Non-Home Equity LOC Account Opening Disclosure Table?  We seem to only have a selection for an APR for Cash Advances, which is 14 or 12 point font.  Any thoughts would be appreciated.

    Secondly, our product is interest only and the payments are the greater of the interest only payment or $50.  Understanding that, we have to include a row in the table for the Minimum Interest Charge.  We can't figure out how to add this information either.

    Thanks in advance.

      Coronavirus- Lending Considerations

      AVP at a bank ($124MUSA)
      I have read all the guidance issued by FDIC regarding working with customers to minimize the impact on the community during this pandemic.  What are the lending considerations I need to be thinking about, especially related to consumer lending on primary residences?  Is there anything that would restrict or complicate modifying those loans or deferring several months payments?  Have you developed programs to address these situations that will surely arise as local small businesses struggle and either close or lay off employees?