Be sure to JOIN US on June 2, 2020, for our webinar, “Flood Insurance Requirements”.
Flood insurance isn’t about you. That statement is sometimes hard for banks and lenders to fully grasp. Flood insurance isn’t about protecting the bank, it’s about protecting your borrowers and ultimately the interest of the U.S. Government. We see lenders all the time trying to get out of requiring flood insurance by saying the collateral located in a Special Flood Hazard Area is being taken as an abundance of caution, or the land value far exceeds the structure value, etc. When it comes to flood insurance; however, it doesn’t matter. If your loan is secured by a structure in a SFHA you must play the flood insurance game, it’s not optional.
Read more about fdpa regulation!
Click on the video to listen to Jerod explain more. A transcription is provided below.
Can we match or even beat the competition? Hi, there. This is Jerod Moyer with Bankers Compliance Consulting.
One of the common questions that I get when I do a fair lending session is, we’ve sat and we’ve worked and worked and worked with this client. We’re set to close, and because the CFPB and the other agencies are out there promoting shopping with things like the TRID and Know Before You Owe disclosures, our client actually went and shopped. And at the last minute they bring to the table a lower rate from down the street or some sort of lower pricing from down the street.
And so the question is, can we match or even beat the competition’s price? And the answer is fairly simple, but it comes with some baggage. So you’re not prohibited from beating or matching the competition in the form of pricing and/or underwriting. However, the risk that comes with it is, what you’re really doing there is, you’ve enabled discretionary pricing within your organization. It’s not a bad thing. You just have to have controls in place.
The big thing that we look for when we go into banks and we do our fair lending reviews, if there’s any form of discretionary pricing and/or underwriting, is that these exceptions, and that’s what we’re going to refer to them as, that they’re monitored and controlled. That we know where they’re coming from, where they’re not coming from, and we talk about it and we monitor it along the way. That’s what we’re looking for.
This is just one of the many things that we train on within the fair lending training that we provide. We also have a lot of other training we would invite you to go and check out within our library located on our website. Or give us a call. We’d love to talk about how our team can partner and help your team navigate risks such as fair lending.
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