reg z checklist used by regulators

Reg. Z – Closed-end Credit Worksheet

 Yes No N/A Comment
  1. Is the loan covered under Reg. Z closed-end disclosure requirements? If not, skip this section.
  1. The required disclosures are clearly and conspicuously in writing, in a form that the consumer may keep. (12 CFR 226.17(a)(1))
  1. The disclosures were made prior to consummation. (12 CFR 226.17(b))
  1. The TIL reflects the terms of the legal obligation. (12 CFR 226.17(c)(1))
  1. The identity of the creditor making the disclosures was disclosed. (12 CFR 226.18(a))
  1. Amount financed, using that term, and a brief description such as the amount of credit provided to you or on your behalf, was accurately calculated and disclosed. (12 CFR 226.18(b))
  1. A separate written itemization of the amount financed was provided, unless the loan was subject to RESPA. (12 CFR 226.18(c))
  1. Finance charge, using that term, and a brief description such as “the dollar amount the credit will cost you” was accurately calculated and disclosed (12 CFR 226.18(d))
  1. The annual percentage rate, using that term, and a brief description such as “the cost of your credit as a yearly rate” was accurately calculated and disclosed. (12 CFR 226.18(e))
10.  Payment schedule: amount, timing, and number of payments. 1(2 CFR 226.18(g))
11.  Total of payments accurate. (12 CFR 226.18(h))
12.  Demand feature, if applicable. (12 CFR 262.18(i))
13.  Prepayment (12 CFR 262.18(k))
14.  Late payment (12 CFR 262.18(l))
15.  Security interest (12 CFR 262.18(m))
16.  Insurance & debt cancellation ((12 CFR 262.18(n)) (see 226.4(d) for specifics)
17.  Security interest charges (12 CFR 262.18(o))
18.  Contract reference (12 CFR 262.18(p))
19.  Assumption policy (12 CFR 262.18(q))
20.  Required deposit (12 CFR 262.18(r))
21.  If a RMT and subject to RESPA, the following disclosures were provided, as applicable (12 CFR 226.19(a))
a) TIL was provided in a timely manner. (12 CFR 226.19(a)(1))
b) If the APR at the time of consummation varied from the initially disclosed APR by more than1/8 of 1 percentage point in a regular transaction or more than 1/4 of 1 percentage point in an irregular transaction, all of the changed terms were disclosed no later than consummation or settlement. (12 CFR 226.19(a)(2))
22.  If the APR may increase after consummation and secured by a dwelling, maximum interest rate disclosed within the contract. (12 CFR 226.30(a))

Variable Rate Transactions
23.  If the annual percentage rate may increase after consummation in a transaction not secured by the consumer’s principal dwelling or in a transaction secured by the consumer’s principal dwelling with a term of one year or less, the following disclosures were provided (12 CFR 226.18(f)(1):
a) Variable rate feature disclosed.
b) The circumstances under which the rate may increase.
c) Any limitations on the increase.
d) The effect of an increase.
e) An example of the payment terms that would result from an increase.
24.  If the annual percentage rate may increase after consummation in a transaction secured by the consumer’s principal dwelling with a term greater than one year, the following disclosures were provided (12 CFR 226.18(f)(2)):
a) The fact that the transaction contains a variable-rate feature
b) A statement that variable-rate disclosures have been provided earlier. (see ARM loans below)

Adjustable Rate Mortgages
25.  If the APR may increase after consummation in a transaction secured by the consumer’s principal dwelling with a term greater than one year, the following disclosures were provided at the time an application form is provided or before the consumer pays a non-refundable fee, whichever is earlier (12 CFR 226.19(b)):
a) The booklet titled Consumer Handbook on Adjustable Rate Mortgages published by the Board and the Federal Home Loan Bank Board, or a suitable substitute.
b) A loan program disclosure for each variable-rate program in which the consumer expresses an interest.

High Rate High Fee Loans (Sec. 32)

 Complete HOEPA worksheet for all potential loans
26.  If the loan is subject to section 32, verify that:
a) Section 32 disclosures were made. (12 CFR 226.32(c))
b) There are no impermissible balloon payments. (12 CFR 226.32(d)(1))
c) There is no negative amortization. (12 CFR 226.32(d)(2))
d) There are no advance payments of more than two periodic payments. (12 CFR 226.32(d)(3))
e) The interest rate is not increased after default. (12 CFR 226.32(d)(4))
f)  There are no prepayment penalties. (includes Rule of 78s refunds). (12 CFR 226.32(d)(6))
g) Contract does not contain a due-on-demand clause (12 CFR 226.32(d)(8))

Right of Rescission
27.  If a rescindable transaction, verify the following:
a) Notice contained the required information. (12 CFR 226.23(b)(1)&(2))
b) Two copies of the notice and material disclosures were provided to each person entitled to rescind. (12 CFR 226.23(b)(1))
c) Funding delayed until rescission period has expired. 12 CFR 226.23(c))
Real Estate Settlement Procedures Act Worksheet (24 CFR 3500) Yes No N/A Comment
  1. Is the loan covered under RESPA (Reg. X)? If not, skip this section.

Special Information Booklet
  1. If secured by a first lien and for the initial purchase of a 1-4 family residential property, the HUD booklet was provided in a timely manner. (24 CFR 3500.6)

Servicing Disclosure Statement
  1. If secured by a first lien:
a)   SDS was delivered at the time of application in a face-to face interview or no later than the 3rd business day
b)   Accurate and acknowledged by all applicants. (24 CFR 3500.21(b) & (c))

Good Faith Estimate
  1. Good faith estimate reasonable, complete, and delivered in a  timely manner.( 24 CFR 3500.7(a) and (c))
  1. Name, address, and phone number of required providers disclosed. (24 CFR 3500.7(e)(1)(ii))
  1. Statement describing the nature of any relationship between required providers and the bank. (24 CFR 3500.7(e)(1)(iii))

Affiliated Business Arrangement Disclosure
  1. If applicable, the AfBA disclosure was provided in a timely manner and contained the required information. (24 CFR 3500.15)

Settlement Statements
  1. HUD-1 charges itemized and accurate. 24 CFR 3500.8(b)

Escrow Accounts
  1. If an escrow account is established:
 Complete Escrow worksheet for all applicable loans
a)   Bank provided initial statement at closing or not later than 45 days after settlement. 24 CFR 3500.17(g)(1)
b)   Initial statement is accurate. 24 CFR 3500.17(c)(1)
c)   Initial statement includes monthly mortgage and escrow payments, itemizes estimated taxes, insurance premiums, anticipated disbursement dates, and other charges to be paid in year after account is established, indicates the cushion amount and a running trial balance. 24 CFR 3500.17(g)(1)(i)

Notice of Servicing Transfer
  1. If the loan was sold subsequent to closing, the bank provided the required notices in a timely manner. (24 CFR 3500.21(d))
Flood Disaster Protection Act Worksheet (12 CFR 22) Yes No N/A Comment
  1. Is the loan secured by improved real property? If not, skip this section.

Initial Determination
  1. Bank used the current “Standard Flood Hazard Determination Form”. (12 CFR 22.6)
  1. If the bank requires the escrow of taxes, insurance, etc. on the loan, flood insurance premiums are also escrowed. (12 CFR 22.5)
  1. Fees charged for determining whether the property is in a flood hazard area are reasonable. (12 CFR 22.8)

Flood Notice
  1. Notification is accurate and furnished in a timely manner (12 CFR 22.9)

Flood Insurance
  1. Evidence of flood insurance was obtained prior to consummation. (12 CFR 22.3; Force placed, if necessary. 12 CFR 22.7)
  1. Property has sufficient coverage. (12 CFR 22.3)
  1. Bank listed as mortgagee?
Reg. B (12 CFR 202) Yes No N/A Comment

Appraisal Rules
  1. If secured by a 1-4 dwelling, bank provided the customer with either a copy of any appraisal used to determine the value of the property or a notice of the customer’s right to receive a copy. (12 CFR 202.14)

Written Application
  1. If for the purchase or permanent construction or refinancing of the borrower’s principal residence, a written application was obtained. (12 CFR 202.4(c)(

Monitoring Information
  1. Monitoring information was not recorded unless so required. (12 CFR 202.13)

Evidence of Intent
  1. If there were multiple applicants, each person’s intent to be a joint applicant was evidenced at the time of application. (12 CFR 202.7(d)(1))
Reg. C (12 CFR 203) Yes No N/A Complete HMDA worksheet for all applicable loans
  1. If applicable, the bank obtained the required monitoring information.
  1. The application was correctly recorded on the LAR within 30 days of the end of the calendar quarter in which the action was taken.
Fair Housing Home Loan Data Worksheet (12 CFR 27) Yes No N/A Comment – Applies only to OCC regulated banks.
  1. Did the bank obtain all of the required information on a written application? (12 CFR 27.3(b))
Reg. V (12 CFR 222) Yes No N/A Comment
  1. If a consumer loan, did the institution provide a clear and conspicuous notice about furnishing negative information, in writing, to the customer? (Appendix B)
  1. Was medical information obtained and/or used only within the restrictions? (12 CFR 222.30)
Fair Credit Reporting Act Yes No N/A Comment

Home Loan Notice
  1. If the transaction was secured by the consumer’s principal residence and a credit score was obtained, were the required disclosures provided in a timely manner? (Section 609(g)(1))

Fraud Alerts
  1. If a credit report was obtained and the report reflected a fraud or active duty alert, did the lender take steps to form a reasonable belief that the identity of the person making the request is known? (Section 605A(h)(1)(B))
Consumer Protection in the Sales of Insurance (12 CFR 14) Yes No N/A Comment
  1. Was the required disclosure made orally and in writing at the time the consumer applied for the extension of credit in connection with which an insurance product or annuity is solicited, offered, or sold? (12 CFR 14.40(b))
  1. Was the required disclosure provided at consummation? (12 CFR 14.40(a))
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