Truth in Lending
National Loan Auditors Baseline Compliance Reviews include comparisons, tests, functions and calculations under the Truth In Lending Act (click here for a description of National Loan Auditors Section 32 HOEPA review): Federal Truth in Lending Act Tolerance Tests (TILA/Tolerance).
National Loan Auditors recalculates the following amounts and schedules based on the loan data submitted to the system to determine if the loan is within the permissible finance charge tolerances ($35 and $100) and APR Tolerance (1/8 of 1%). Complete forensic loan analysis requires the following:
• Amount of finance charge.
• Annual percentage rate (APR).
• Payment schedule.
• Amount financed.
• Total amount of payments.
• Amortization schedule.
• Federal Truth in Lending Act Right of Rescission Tests (TILA/ROR).
National Loan Auditors validates that the rescission period for the loan is in compliance with Truth In Lending timing requirements by comparing the loan disbursement date to the most current dates provided in the loan data submitted to the forensic loan software:
• Forensic loan analysis requires the date the document was signed.
• For the purpose of a thorough forensic loan audit we require the last disclosure date.
• Right of rescission expiration date.
• HOEPA disclosure date (if applicable).
• HOEPA, State and local high costs.
Federal (HOEPA), state and municipal high cost thresholds
National Loan Auditor’s forensic loan analysis compares the loan data to the calculated high cost thresholds as defined in the Home Ownership and Equity Protection Act (HOEPA) and all applicable state and local jurisdictions.
National Loan Auditors does not require our client to make any determination about whether a fee is a finance charge or is included in a points and fee analysis. Simply stated, clients do not submit calculated values (e.g. total loan amount) or finance charge "flags." Using documented loan data, National Loan Auditors recalculates all values and classifies all fees to determine whether an APR or points and fees threshold has been triggered.
National Loan Auditors returns Pass/Fail messages showing the calculated loan APR and points and fees versus the legal limits (including the difference). National Loan Auditors also returns payment streams, finance charge worksheets, and high cost points and fees worksheets to further assist our client in identifying high cost loans.
State Consumer Credit Law
National Loan Auditors complies with over 300 U.S. State Laws regarding consumer residential mortgage loans secured by real property as these laws relate to such issues as:
• Usury rate ceilings percentage caps.
• Prohibited fees identified during a comprehensive loan document review.
• Fee percentage of dollar amount limits.
• Prepayment penalty prohibitions and limitations.
• Late fee dollar amount limits and length of late fee grace periods.
• Interest accrual start dates.
• Negative amortization prohibitions.
• Balloon payment prohibitions or term limitations.
• Payment and term limitations.
National Loan Auditors applies preemptions, as appropriate, under the Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMCA) and the Alternate Mortgage Transactions Parity Act (AMTPA). Additionally, for loans identified as high-cost loans by the HOEPA & High Costs review, National Loan Auditors will further compare the applicable loan data to requirements of jurisdiction specific laws prohibiting predatory lending. National Loan Auditors forensic loan audit considers and weighs historical rules, indices and information in accordance with state laws that are preserved to enable retrospective quality control loan auditing.
HOEPA
Home Ownership Equity Protection Act state and local high costs.
Federal (HOEPA), state and local high cost thresholds.
National Loan Auditors compares the loan data collected during a forensic loan audit to the calculated high cost thresholds as defined by the Home Ownership and Equity Protection Act (HOEPA) and applicable state and local jurisdictions.
National Loan Auditors does not require the client to make any determination about whether a fee is a finance charge or is included in a points and fee analysis. In other words, clients do not submit calculated values (e.g. total loan amount) or finance charge "flags." Using raw loan data, National Loan Auditors recalculates all values and classifies all fees to determine whether an APR or points and fees threshold has been triggered.
National Loan Auditors returns exception messages showing the calculated loan APR, points and fees versus the legal limits (including the difference). National Loan Auditors also returns payment streams, finance charge worksheets, high cost points and fees worksheets to assist the client in minimizing potentially high cost loans.
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