A repayment schedule that consolidates more than two periodic payments that are to be paid in advance from the proceeds of the loan .
Most prepayment penalties , including refunds of unearned interest calculated by any method less favorable than the actuarial method . The exception is if :
• the lender verifies that your total monthly debt ( including the mortgage ) is 50 % or less of your monthly income .
• you get the money to prepay the loan from a source other than the lender or an affiliate lender ; and
• the lender exercises the penalty clause during the first five years following execution of the mortgage .
The Real Estate Settlement and Procedures Act ( RESPA ) of 1974 , along with subsequent amendments , restricted consumerpurpose lending to require special timely disclosures regarding the nature and cost of the real estate settlement process .
Additional subsequent regulations came in the Wall Street Financial Reform and Consumer Protection Act of 2010 (“ DoddFrank ”), which reinforced disclosure requirements and added the requirement to prove up the borrower ’ s ability to repay . Loans were prohibited where the borrower had no verifiable source of income .
All the new California state laws and compliance have been added on to the federal legislation of the January 2014 loan servicing requirements imposed by the Federal Consumer Financial Protection Bureau ( CFPB ), which was originated as part of the DoddFrank Wall Street Reform and Consumer Protection Act passed in 2010 . This is a regulatory nightmare laced with legal liability .
This new postCovid lending environment “ The New Reset ” may be referred as a “ reemployment act for
government employee bureaucrats , much bigger government , much greater complex regulations , with much greater threat of negative and punitive consequences for any questionable deviations .” Also , all these new complex laws constitute a reemployment act for lawyers . With this “ New COVID Reset ” private money mortgage brokers may discover fewer freedoms in making experientialbased judgment calls . Lenders / mortgage brokers will find a more difficult environment in which to operate as they “ wind themselves thought this technical maze ” in the uncharted territory of new laws . Operational costs will be higher , which will reduce the bottomline profit .
This new postCovid lending environment “ The New Reset ” may be referred as a “ reemployment act for government employee bureaucrats , much bigger government , much greater complex regulations , with much greater threat of negative and punitive consequences for any questionable deviations .”
MEET DAN HARKEY
Dan is President and CEO at California Commercial Advisers , Inc . He consults on subjects of business growth and private money . Dan often creates articles related to these subjects . He has been active in the real estate and financial services industry since 1972 and possesses a lifetime teaching credential for secondary and adult education . He has taught over 350 educational seminars on subjects related to real estate lending , private money lending , and loan underwriting for commercial / industrial properties .
Contact Dan Today Mobile : ( 949 ) 5338315 Email : dan @ danharkey . com
Competent counsel will be required .
Consumer and business purpose lending is made more complex by both state and federal government regulations that are in some cases conflicting . My comments and opinions are not all encompassing . Any owner / borrower or lender / mortgage broker should consult with a highly competent lawyer to guide them to appropriate actions .
Thank you , Dan Harkey
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