FDIC Federal Register Citations

From: Schoenbucher Karen
Sent: Wednesday, February 25, 2004 2:30 PM
To: regs.comments@federalreserve.gov; Comments; regs.comments@occ.treas.gov; regs.comments@ots.treas.gov
Subject: EGRPRA

I would like to take this opportunity to comment on three of my favorite regulations.

HMDA Reg C has always been fun & challenging. I've had lots of interesting experiences with it, but thought I'd finally gotten it down pat. Well then along came HOEPA & the Rate Spread. I found it almost too much to believe when the 4th item in the training package (St Louis Fed) under the Goals said "Clarify & simplify the rule." To me, nothing could be further from the truth. How & to what type of loan HOEPA applies to soooo confusing! We're trying to build a road map to follow this one. It would have been easier to ask the question "Do you sell or add Credit Life Ins to this loan" and give an answer! As for the Rate Spread, I think if you'd simply asked for either the stated interest rate & APR or the APR only, that would have been more meaningful than trying to again figure out what loans this applies to & to compare the APR to a Treasury Security Rate. This may mean something to someone somewhere, but we're at a loss on our end.

TIL Reg Z is sometimes confusing to most people because we feel that all most customers want to know is "What's my interest rate and monthly payment amount?" The components of what goes into making up the APR calculation should or could be simplified if someone could come up with an updated chart from the original that Alan Dombrow first created (see my attachment which may not be all inclusive) that would just spell out what is & is not included in the APR & Finance Charges. We've been dealing with this for some years now, and it's time to lay all the cards out on the table & get everyone on the same page. I cannot answer a question about these two items without referring either to Alan's chart or my own.

And on a related matter, RESPA & the HUD-1. I've read all about HUD's proposal to make changes & all I can say is Heaven help us all if their ideas get approved. It is hard enough to get a realistic picture out to the customer in 3 days, let alone have that become a contract for fees to be paid at closing. The GFE is just that, an "Estimate" of the costs. But things change all the time, and to make one estimate a contract is unrealistic. The GFE & early TIL should be an estimate based only of the facts known at the time of application. And please don't review the final HUD-1 to the GFE, too many variables come into play and as I said, things change between the time an application is taken & the loan closes.

Thanks for letting me put in my two cents worth. Karen

Karen A. Schoenbucher
V P & Compliance Officer
Southwest Bank, Ft Worth, Tx