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a. Direct Loans (09/26/2022)
i. Definition
A Direct Loan process refers to where the Borrower applies directly to the Lender or its sponsored TPO for the Loan without assistance from a Dealer, contractor, or third party that has a financial interest in the loan transaction.
ii. Standard
The credit application, signed by the Borrower, may be filled out by the Borrower or by a person acting at the direction of the Borrower who does not have a financial interest in the loan transaction.
For a Direct Loan purchase transaction, loan proceeds are disbursed to the Borrower and seller jointly. However, the Borrower may provide the Lender with an executed assignment of Borrower’s interest in the loan proceeds to the seller on or before the date of disbursement to properly complete payment.
For a Direct Loan refinance transaction, proceeds are disbursed to the Note holder of the Loan being paid off.