Closed-End Credit Forms Review Worksheet

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Closed-End Credit Forms Review Worksheet

c.
Obtained the customer’s signature or
initials as an affirmative request for the
insurance? [226.18(n) and 226.4(d)]
17. If the property insurance premium has
been excluded from finance charge, has
the bank:
a.
Disclosed that the consumer may
choose the insurance company?
b.
Disclosed the cost of the insurance for
the initial term if obtained from or
through the bank? [226.18(n) and
226.4(d)]
18. Are the disclosures required under
226.4(e) to exclude certain fees required
by law, such as a filing fee or certain
insurance premiums from the finance
charge provided? [226.18(o)]
19. Is there a statement referring to the
contract document for specified
information? [226.18(p)]
20. Is there an appropriate assumption
disclosure for residential mortgage
transactions? [226.18(q)]
21. If a deposit is required as a condition of
the transaction, has the bank disclosed
that the APR does not reflect its effect?
[226.18(r)]
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Worksheet #4
Closed-End Credit – Adjustable Rate Mortgage Forms Review
Use this worksheet when reviewing variable rate loans or ARMs with a maturity greater than one year secured
by the principal dwelling of the borrower. To complete, review the forms and place a check in each
applicable box. Determine the accuracy of the disclosures by comparing them to the contract and other
bank documents. This worksheet can be used for reviewing audit work papers, evaluating bank policies,
performing expanded procedures, and training as appropriate. Only complete those sections of the worksheet
that specifically relate to the issue being reviewed, evaluated or tested, and retain those completed sections in
the work papers.
When reviewing audit or evaluating bank policies, a “No” answer indicates a possible exception/deficiency
and should be explained in the work papers. When performing expanded procedures, a “No” answer
indicates a possible violation and should be explained in the work papers. If a line item is not applicable
within the area you are reviewing, indicate “NA.”
Underline the applicable use:
Audit
Bank Policies
Expanded Procedures
Closed-End Credit Adjustable Rate Mortgage Forms Review Worksheet
Product Type:
Yes No
Yes No
Yes No
Yes No
Yes No
1. Is the fact that the note contains a
variable rate feature disclosed?
[226.18(f)(2)(i)]
2. Is there a statement that variable rate
disclosures were provided earlier?
[226.18(f)(2)(ii)]
Disclosure At Time Of Application (one for each program in which the consumer expresses an interest)
[226.19(b)(2)]
3. Are disclosures provided either at time of
application or before consumer pays any
nonrefundable fee or, if the application
is received from a mortgage broker or
over the telephone, mailed within three
business days following receipt of the
application? [226.19(b) & footnote 45b]
4. Do variable rate program disclosures
provide:
a. The booklet entitled “Consumer
Handbook on ARMs,” or a suitable
substitute? [226.19(b)(1)]
b. A statement that interest rate,
payment or the term can change?
[226.19(b)(2)(i)]
c. The index/formula with source of
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Closed-End Credit Adjustable Rate Mortgage Forms Review Worksheet
Product Type:
Yes No
Yes No
Yes No
Yes No
Yes No
information disclosed?
[226.19(b)(2)(ii)]
d. An explanation of the interest
rate/payment determination and
margin? [226.19(b)(2)(iii)]
e. A statement that consumer should ask
for the current margin and interest
rate? [226.19(b)(2)(iv)]
f. The fact that interest rate is
discounted, if applicable, and a
statement that the consumer should
ask about the amount of discount?
[226.19(b)(2)(v)]
g. The frequency of interest rate and
payment changes? [226.19(b)(2)(vi)]
h. The rules relating to changes?
[226.19(b)(2)(vii)]
i. An historical example or the
maximum interest rate and payment?
[226.19(b)(2)(viii)]
j. An explanation of how the loan
payment can be calculated based on
example? [226.19(b)(2)(ix)]
k. The fact that the loan program
contains a demand feature?
[226.19(b)(2)(x)]
l. Information on, and timing of,
adjustment notices? [226.19(b)(2)(xi)]
m. A statement that disclosures for other
variable rate loan programs are
available? [226.19(b)(2)(xii)]
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Worksheet #5
Closed-End Credit File Review
Use this worksheet when reviewing closed-end credit loans. The worksheet contains all the standard closed-
end credit disclosure requirements and should be used with the other closed-end worksheets. Determine the
accuracy of the disclosures by comparing them to the contract and other bank documents. To complete,
review loan files and place a check in each applicable box.
This worksheet can be used for reviewing audit work papers, evaluating bank policies, performing expanded
procedures, and training as appropriate. Only complete those sections of the worksheet that specifically relate
to the issue being reviewed, evaluated or tested, and retain those completed sections in the work papers.
When reviewing audit or evaluating bank policies, a “No” answer indicates a possible exception/deficiency
and should be explained in the work papers. When performing expanded procedures, a “No” answer
indicates a possible violation and should be explained in the work papers. If a line item is not applicable
within the area you are reviewing, indicate “NA.”
Underline the applicable use:
Audit
Bank Policies
Expanded Procedures
Closed-End Credit File Review Worksheet
Product Type:
Name of Borrower:
Account Number:
Yes No
Yes No
Yes No
Yes No
Yes No
1. Are disclosures furnished before
consummation? [226.17(b)]
2. Is the amount financed disclosed and
accurate? [226.18(b)]
3. Is there a separate itemization of the
amount financed (RESPA-GFE, if
applicable, may be substituted)?
[226.18(c)]
4. Is the finance charge disclosed and
accurate? [226.4, 226.18(d) & footnote
41]
5. Is the APR disclosed and accurate?
[226.18(e), footnote 42 & 226.22(a)]
6. Are the following required disclosures on
variable rate loans (other than those
secured by the consumer’s principal
dwelling with a term of more than one
year) provided?
a. Circumstances that permit rate
increase? [226.18(f)(1)(i)]
b. Limits on the increase:
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Closed-End Credit File Review Worksheet
Product Type:
Name of Borrower:
Account Number:
Yes No
Yes No
Yes No
Yes No
Yes No
Periodic? [226.18(f)(1)(ii)]
Lifetime? [226.18(f)(1)(ii)]
c. Effects of increase? [226.18(f)(1)(iii)]
d. Hypothetical example of new payment
terms? [226.18(f)(1)(iv)]
7. Are the following required disclosures
provided if the annual percentage rate
may increase after consummation on
variable rate loan transaction secured by
the consumer’s principal dwelling with a
term greater than one year:
a. The fact that the transaction contains a
variable-rate feature?
b. A statement that variable-rate
disclosures have been provided earlier?
[226.18(f)(2)]
8. Is the payment schedule (amount, timing,
and number of payments) provided and
accurate? [226.18(g)]
9. Is the total of payments provided and
accurate? [226.18(h)]
10. a. If the obligation has a demand feature,
is that fact disclosed?
b. If the disclosures are based on an
assumption of one year as provided in
section 226.17(c)(5), is that fact disclosed?
[226.18(i)]
11. If a credit sale, is the total sale price
accurate? [226.18(j)]
12. Is the security interest described
accurately, if applicable? [226.18(m)]
13. Is the credit life insurance premium or
debt cancellation fee for the initial term
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Closed-End Credit File Review Worksheet
Product Type:
Name of Borrower:
Account Number:
Yes No
Yes No
Yes No
Yes No
Yes No
accurately disclosed, if applicable?
[226.18(n) & 226.4(d)]
14. Is the cost of insurance for the initial term
accurately disclosed if from or through
the creditor? [226.18(n) and 226.4(d)]
15. Are deposits required for credit
transactions disclosed accurately?
[226.18(r)]
16. Are REM closing fees that are excluded
from the disclosed finance charge bona
fide and reasonable? [226.4(c)(7)]
17. Is the maximum interest rate in the
contract (variable rate mortgage)
disclosed? [226.30(a)]
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Worksheet #6
Closed-End Credit – Adjustable Rate Mortgage File Review
Use this worksheet when reviewing variable rate loans or ARMs with maturity greater than one year secured by
the principal dwelling of the borrower. To complete, review applicable loan files and place a check in each
applicable box. Determine the accuracy of the disclosures by comparing them to the contract and other bank
documents. This worksheet can be used for reviewing audit work papers, evaluating bank policies, performing
expanded procedures, and training as appropriate. Only complete those sections of the worksheet that
specifically relate to the issue being reviewed, evaluated or tested, and retain those completed sections in the
work papers.
When reviewing audit or evaluating bank policies, a “No” answer indicates a possible exception/deficiency and
should be explained in the work papers. When performing expanded procedures, a “No” answer indicates a
possible violation and should be explained in the work papers. If a line item is not applicable within the area
you are reviewing, indicate “NA.”
Underline the applicable use:
Audit
Bank Policies
Expanded Procedures
Closed-End Credit – Adjustable Rate Mortgage File Review Worksheet
Name of Borrower:
Account Number:
Yes No
Yes No
Yes No
Yes No
Yes No
1. Did the bank provide timely early disclosures for
residential mortgage transactions subject to RESPA?
[226.19(a)(1)]
2. Was the booklet entitled “Consumer Handbook on
ARMs” or a substitute provided? [226.19(b)(1)]
3. Does the contract contain an independent index [12
CFR 34.22] if the transaction is an ARM under 12
CFR 34.20 or an ARM under 226.19(b)?
Subsequent Disclosures
4. Were subsequent disclosures mailed in accordance
with timing requirements? [226.20(c)] and do they
provide the:
a. Current and prior interest rates (verify accuracy of
rates used)? [226.20(c)(1)]
b. Index values on which interest rates are based
(verify accuracy of indexes used)? [226.20(c)(2)]
c. Extent to which the creditor has foregone an
interest rate increase (only if carryover exists)?
[226.20(c)(3)]
d. Contractual effects of the adjustment, including
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Closed-End Credit – Adjustable Rate Mortgage File Review Worksheet
Name of Borrower:
Account Number:
Yes No
Yes No
Yes No
Yes No
Yes No
the new payment amount and a statement of the
loan balance? [226.20(c)(4)]
e. Payment required to avoid negative amortization?
[226.20(c)(5)]
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Worksheet #7
Right of Rescission File Review
Use this worksheet when reviewing the right to rescission for both closed- and open-end loans subject to
Regulation Z that are secured by the consumer’s principal dwelling. Requirements for closed- and open-end
loans are found in 12 CFR 226.23 and 12 CFR 226.15, respectively. (Note: Loans not subject to rescission
include business purpose credit, refinancings in which no new money is advanced, and residential mortgage
transactions.). To complete, review applicable loan files and place a check in each applicable box
This worksheet can be used for reviewing audit work papers, evaluating bank policies, performing expanded
procedures, and training as appropriate. Only complete those sections of the worksheet that specifically relate
to the issue being reviewed, evaluated or tested, and retain those completed sections in the work papers.
When reviewing audit or evaluating bank policies, a “No” answer indicates a possible exception/deficiency
and should be explained in the work papers. When performing expanded procedures, a “No” answer
indicates a possible violation and should be explained in the work papers. If a line item is not applicable
within the area you are reviewing, indicate “NA.”
Underline the applicable use:
Audit
Bank Policies
Expanded Procedures
Right of Rescission File Review Worksheet
Product Type:
Name of Borrower:
Loan/Account #:
Type of Credit (closed or open):
Yes No
Yes No
Yes No
Yes No Yes No
1. Were two copies furnished to each person
entitled to rescind? [226.23(b)(1)/226.15(b)]
2. Does the rescission notice identify the
transaction? [226.23(b)(1)/226.15(b)]
3. Does the rescission notice disclose:
a. The retention or acquisition of a security
interest in the consumer’s principal
dwelling? [226.23(b)(1)(i)/226.15(b)(1)]
b. The consumer’s right to rescind?
[226.23(b)(1)(ii)/226.15(b)(2)]
c. How to exercise the right to rescind?
[226.15(b)(1)(iii)/226.23(b)(3)]
d. The effects of rescission?
[226.23(b)(1)(iv)/226.15(b)(4)]