Texas Adopts Provisions Regarding Loan Status Forms
by: Matthew Dailey
The Texas Department of Savings and Mortgage Lending adopted provisions regarding loan status forms. These provisions are effective on May 1, 2014.
When conditional qualification is given to a mortgage applicant by an originator, the form must resemble Form A under 7 TAC s.80.201(a). Most importantly, written confirmation is needed from the applicant to the originator. Form A is a conditional qualification letter and includes the originators license number, contact information for the applicant, loan information and terms, credit and income review and states at the bottom that the form is not an approval.
The originator can add additional aspects of the loan as long as they are not misleading and any items reviewed by the originator in determining qualifications or additional requirements.
Written notification of loan approval on the basis of credit worthiness, but not collateral, must include the information in Form B under 7 TAC s.80.201(b). Some of the necessary information includes the originator’s license number, applicants’ contact information, loan information, property information, credit and income verification, and the expiration date of the conditional approval.
The originator can also include a disclosure of fees charged on the document as well as any aspects of the loan that are not misleading or other items used to the determine the worthiness.
About the Author
Matthew Dailey, J.D. is Regulatory Compliance Consultant at Bankers Advisory. He is a graduate of Stonehill College and earned his Juris Doctor at the New England School of Law. He is admitted to the Massachusetts Bar. Matthew can be reached at matthew@bankersadvisory.com
Anna DeSimone founded Bankers Advisory in 1986 and is a nationally recognized authority in residential mortgage lending. She has received numerous industry awards and has authored more than 40 best practices guides and hundreds of articles.
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