Home Equity LOC Disclosure

USA PATRIOT ACT

 

Section 326 requires financial institutions to verify the identity of account holders to prevent the use of the U.S. banking system in terrorist and other activity.

 

IMPORTANT NOTICE ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT

 

To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account. What this means for you: When you open an account, we will ask for your name, address, date of birth and other information that will allow us to identify you. We may also ask to see your driver’s license or other identifying documents.

 

In some cases, identification for existing customers may be requested so the bank can ensure that it knows the true identity of our customers.
 

Lender: Presidential Bank, FSB 4520 East-West Highway Bethesda, MD 20814

IMPORTANT TERMS OF OUR
PRESIDENTIAL HOME EQUITY LINE OF CREDIT

 
Originator NMLSR ID: 1436217 or 1436218
Origination Co. NMLSR ID: 421593


This disclosure contains important information about our Presidential Home Equity Line of Credit (the "Plan" or the "Credit Line"). You should read it carefully and keep a copy for your records.


AVAILABILITY OF TERMS. All of the terms of the Plan described herein are subject to change. If any of these terms change (other than the ANNUAL PERCENTAGE RATE) and you decide, as a result, not to enter into an agreement with us, you are entitled to a refund of any fees that you paid to us or anyone else in connection with your application.

SECURITY INTEREST. We will take a security interest in your home. You could lose your home if you do not meet the obligations in your agreement with us.

POSSIBLE ACTIONS.  Under this Plan, we have the following rights:

  • Termination and Acceleration. We can terminate the Plan and require you to pay us the entire outstanding balance in one payment, and charge you certain fees, if any of the following happens:
    1. You commit fraud or make a material misrepresentation at any time in connection with the Plan. This can include, for example, a false statement about your income, assets, liabilities, or any other aspect of your financial condition.
    2. You do not meet the repayment terms of the Plan.
    3. Your action or inaction adversely affects the collateral for the Plan or our rights in the collateral. This can include, for example, failure to maintain required insurance, waste or destructive use of the dwelling, failure to pay taxes, death of all persons liable on the account, transfer of title or sale of the dwelling, creation of a senior lien on the dwelling without our permission, foreclosure by the holder of another lien or the use of funds or the dwelling for prohibited purposes.
  • Suspension or Reduction. In addition to any other rights we may have, we can suspend additional extensions of credit or reduce your credit limit during any period in which any of the following are in effect:
    1. The value of your dwelling declines significantly below the dwelling's appraised value for purposes of the Plan. This includes, for example, a decline such that the initial difference between the credit limit and the available equity is reduced by fifty percent and may include a smaller decline depending on the individual circumstances.
    2. We reasonably believe that you will be unable to fulfill your payment obligations under the Plan due to a material change in your financial circumstances.
    3. You are in default under any material obligation of the Plan. We consider all of your obligations to be material. Categories of material obligations include, but are not limited to, the events described above under Termination and Acceleration, obligations to pay fees and charges, obligations and limitations on the receipt of credit advances, obligations concerning maintenance or use of the dwelling or proceeds, obligations to pay and perform the terms of any other deed of trust, mortgage or lease of the dwelling, obligations to notify us and to provide documents or information to us (such as updated financial information), obligations to comply with applicable laws (such as zoning restrictions).
    4. We are precluded by government action from imposing the annual percentage rate provided for under the Plan.
    5. The priority of our security interest is adversely affected by government action to the extent that the value of the security interest is less than 120 percent of the credit limit.
    6. We have been notified by governmental authority that continued advances may constitute an unsafe and unsound business practice.
    7. The maximum annual percentage rate under the Plan is reached.
  • Change in Terms. We may make changes to the terms of the Plan if you agree to the change in writing at that time, if the change will unequivocally benefit you throughout the remainder of the Plan, or if the change is insignificant (such as changes relating to our data processing systems). Any change to this Plan will be made in accordance with the law and will apply to amounts you owe when the change becomes effective, as well as to any credit advances made after the date of the change.
  • Fees and Charges. In order to open and maintain an account, you must pay certain fees and charges.
    • Late Charge. Your payment will be late if it is not received by us within 16 days after the "Payment Due Date" shown on your periodic statement. If your payment is late we may charge you 5.000% of the payment or $5.00, whichever is greater.
    • Third Party Fees. You must pay certain fees to third parties such as appraisers, credit reporting firms, and government agencies. These third party fees generally total between $200.00 and $3,500.00. Upon request, we will provide you with an itemization of the fees you will have to pay to third parties.


    PROPERTY INSURANCE. You must carry insurance on the property that secures the Plan.


    MINIMUM PAYMENT REQUIREMENTS. You can obtain advances of credit during the following period: ten (10) years (the "Draw Period"). After the Draw Period ends, the repayment period will begin. You will no longer be able to obtain credit advances. The length of the repayment period is as follows: 240 months (20 years), consisting of monthly payments of 0.41667% of the principal balance outstanding at the end of the draw period plus all accrued finance charges. Your Regular Payment will equal the amount of your accrued FINANCE CHARGES ("First Payment Stream"). You will make 120 of these payments. Your payments will be due monthly. Your "Minimum Payment" will be the Regular Payment, plus any amount past due and all other charges. An increase in the ANNUAL PERCENTAGE RATE may increase the amount of your Regular Payment. The Minimum Payment during the First Payment Stream will not reduce the principal that is outstanding on your Credit Line. After completion of the First Payment Stream, your Regular Payment will be based on a percentage of your balance at the start of this payment period plus all accrued FINANCE CHARGES as shown below ("Second Payment Stream"). Your payments will be due monthly.
     

    Range of Balances Number of Payments Regular Payment Calculation
    All Balances 240 0.417% of your balance at the start of the repayment period plus
    all accrued FINANCE CHARGES
     

    Your "Minimum Payment" will be the Regular Payment, plus any amount past due and all other charges. An increase in the ANNUAL PERCENTAGE RATE may increase the amount of your Regular Payment. 

    In any event, if your Credit Line balance falls below $100.00, you agree to pay your balance in full. 

    MINIMUM PAYMENT EXAMPLE. If you made only the minimum payment and took no other credit advances, it would take 29 years and 11 months to pay off a credit advance of $10,000.00 at an ANNUAL PERCENTAGE RATE of 5.250%. During that period, you would make 120 monthly payments ranging from $40.27 to $44.59. Then you would make 239 monthly payments ranging from $42.22 to $86.29. 

    TRANSACTION REQUIREMENTS. The following transaction limitations will apply to the use of your Credit Line:

    • Credit Line Presidential Home Equity Line Check and In Person Request Limitations. The following transaction limitations will apply to your Credit Line and the writing of Presidential Home Equity Line Checks and requesting an advance in person.
    • Minimum Advance Amount. The minimum amount of any credit advance that can be made on your Credit Line is $100.00. This means any Presidential Home Equity Line Check must be written for at least the minimum advance amount.

    TAX DEDUCTIBILITY. You should consult a tax advisor regarding the deductibility of interest and charges for the Plan.

    VARIABLE RATE FEATURE. The Plan has a variable rate feature. The ANNUAL PERCENTAGE RATE (corresponding to the periodic rate), and the minimum payment amount can change as a result. The ANNUAL PERCENTAGE RATE does not include costs other than interest. 

    THE INDEX, The annual percentage rate is based on the value of an index (referred to in this disclosure as the "Index"). The Index is the Prime rate as published in the Wall Street Journal. When a range of rates has been published, the higher of the rates will be used, Information about the Index is available or published at least weekly in the Wall Street Journal Money Rates Table. We will use the most recent Index value available to us as of the date of any annual percentage rate adjustment. If the Index is no longer available, we will choose a new Index and margin. The new index will have an historical movement substantially similar to the original Index, and the new Index and margin will result in an annual percentage rate that is substantially similar to the rate in effect at the time the original Index becomes unavailable. 

    ANNUAL PERCENTAGE RATE. To determine the Periodic Rate that will apply to your First Payment Stream, we add a margin to the value of the Index, then divide the value by the number of days in a year (daily). To obtain the ANNUAL PERCENTAGE RATE we multiply the Periodic Rate by the number of days in a year (daily). This result is the ANNUAL PERCENTAGE RATE for your First Payment Stream, To determine the Periodic Rate that will apply to your Second Payment Stream, we add a margin to the value of the Index, then divide the number by the number of days in a year (daily). To obtain the ANNUAL PERCENTAGE RATE we multiply the Periodic Rate by the number of days in a year (daily). This result is the ANNUAL PERCENTAGE RATE for your Second Payment Stream. A change in the Index rate generally will result in a change in the ANNUAL PERCENTAGE RATE. The amount that your ANNUAL PERCENTAGE RATE may change also may be affected by the lifetime annual percentage rate limits, as discussed below.

    • Initial Annual Percentage Rate Discount. The initial annual percentage rate is "discounted"--it is not based on the Index and margin used for later rate adjustments. The initial discounted rate will be in effect for 6 Months.
    • Please ask us for the current Index value, margin, discount and annual percentage rate. After you open a credit line, rate information will be provided on periodic statements that we send you.

    FREQUENCY OF ANNUAL PERCENTAGE RATE ADJUSTMENTS. Your ANNUAL PERCENTAGE RATE can change monthly. There is no limit on the amount by which the annual percentage rate can change during any one year period, However, under no circumstances will your ANNUAL PERCENTAGE RATE exceed 24.000% per annum or, go below 0.500% per annum at any time during the term of the plan.

    MAXIMUM RATE AND PAYMENT EXAMPLE. 

    • Draw Period. If you had an outstanding balance of $10,000.00, the minimum payment at the maximum ANNUAL PERCENTAGE RATE of 24.000% would be $203.84, This ANNUAL PERCENTAGE RATE could be reached immediately or prior to the 1st payment.
    • Repayment Period. If you had an outstanding balance of $10,000.00, the minimum payment at the maximum ANNUAL PERCENTAGE RATE of 24.000% would be $245.54, This ANNUAL PERCENTAGE RATE could be reached at the time of the 1st payment during the repayment period.

    PREPAYMENT. You may prepay all or any amount owing under the Plan at any time without penalty.

    HISTORICAL EXAMPLE. The example below shows how the ANNUAL PERCENTAGE RATE and the minimum payments for a single $10,000.00 credit advance would have changed based on changes in the Index from 2003 to 2017. The Index values are from the following reference period: as of the last business day in July. While only one payment per year is shown, payments may have varied during each year. Different outstanding principal balances could result in different payment amounts.

    The table assumes that no additional credit advances were taken, that only the minimum payments were made, and that the rate remained constant during the year. It does not necessarily indicate how the Index or your payments would change in the future.


    INDEX TABLE
    Year (as of the last business day in July) Index
    (Percent)
    Margin *
    (Percent)
    ANNUAL
    PERCENTAGE
    RATE
    Monthly
    Payment
    (Dollars)
    Draw Period 2004
    2005
    2006
    2007
    2008
    2009
    2010
    2011
    2012
    2013
    4.250
    6.250
    8.250
    8.250
    5.000
    3.250
    3.250
    3.250
    3.250
    3.250
    1.000
    1.000
    1.000
    1.000
    1.000
    1.000
    1.000
    1.000
    1.000
    1.000
    **0.500
    7.250
    9.250
    9.250
    6.000
    4.250
    4.250
    4.250
    4.250
    4.250
    4.25
    61.58
    78.56
    78.56
    50.96
    36.10
    36.10
    36.10
    36.10
    36.10
    Repayment Period 2014
    2015
    2016
    2017
    2018
    3.250
    3.250
    3.500
    4.250
    5.000
    1.000
    1.000
    1.000
    1.000
    1.000
    4.250
    4.250
    4.500
    5.250
    6.000
    77.80
    75.99
    76.09
    79.60
    82.46
     
    *   This is a margin we have used recently; your margin may be different.
    **  This ANNUAL PERCENTAGE RATE reflects a discount that we have provided recently; your Plan may be discounted by a different amount.

    SETTLEMENT COSTS. In order to obtain your account without paying the Settlement Costs itemized on the Settlement Sheet, you must keep your account open for 36 months from the origination date. These costs generally range from $240.00 to $3,500.00, During the 36 month period the Settlement Costs will be deemed deferred. Upon expiration of the 36 month period, the Settlement Costs will be forgiven. If you terminate your account within the 36 month period, you must pay us the Settlement Costs and we may charge the Settlement Costs to your account as a loan to be repaid at the payoff and termination of your account. Certain costs listed on the Settlement Statement may not be deemed deferred and must be paid in cash at settlement or charged to your account. These costs will be itemized on the Settlement Statement, but listed as "POC". These costs will not be forgiven even if your account remains open for 36 months.
     


    By clicking the "I Agree" button below, the Borrower acknowledges having read the above Disclosure Statement,
    receipt of the handbook entitled "What You Should Know About Home Equity Lines of Credit" and declares
    that, "Everything in this application is correct, to the best of my knowledge. I understand that Presidential Bank will retain
    this application, if it has been tendered or required, whether or not it is approved. I authorize Presidential Bank
    to check my credit and employment history."

    I have read this document.

     

     

     

     

    Presidential Bank reminds you that email@presidential.com is NOT a secure means of communication. Please refrain from including personal information such as account numbers, Tax ID/Social Security numbers, passwords, etc. We encourage you to maintain contact with us through our new Secure Email service, located within Personal Online Banking. Help us keep YOUR personal information PRIVATE!

Last Modifications: 8/7/2018 5:06:35 PM