What documents need to be given to a borrower when an application for a HELOC is received?
At the time of application you are required to give the HELOC program disclosures and the HELOC booklet "When Your Home is on the Line". In addition, you'll have other disclosures that may be applicable at various points in the process. You will need to do a flood determination and if the property is in an SFHA, you'll need to provide the Flood Hazard Notice within a reasonable amount of time prior to closing. You have the FACT Act requirements to provide the Notice to Home Loan Applicants - Credit Score disclosure. We instruct our lenders to provide that within three business days from date of application. The Reg B Appraisal Rights Notice (or the appraisal itself) must be provided prior to communicating the loan decision, but again we instruct our lenders to provide it within three business days of application unless the application is being decisioned sooner than that and then provide it prior to communicating the decision. At closing you'll have your HELOC note and disclosure, right of rescission notice and that's also when we provide our Privacy Notice. Other state law requirements may also be applicable. For example, in South Carolina, we must provide an Attorney and Insurer Preference disclosure to the applicants within three business days of application.
First published on BankersOnline.com 8/04/08