February 5, 2016 at 1:28 pm #8740
The following questions were received during the Compliance Master’s Group sessions:
1. Revised Loan Estimate – Are you recommending the RLE be delivered in each of the changed circumstances or only when fees change sufficient to exceed the 10% tolerance? Presentation doesn’t seem to factor that.
A revised loan estimate should be delivered to the borrower anytime the fees exceed the allowed tolerance (0% or 10%) and the reason for the revision can fit into a changed circumstance category. It is also acceptable to provide a revised loan estimate even if the fee doesn’t exceed the allowed tolerance to ensure the borrower has a true picture of what the closing costs are for the loan.
2. Related question – Should the FI maintain copies of RLEs even if not provided to the consumer?
In my opinion, if a Revised Loan Estimate is completed it should be provided to the consumer; however, if the FI chooses not to provide (maybe 10% tolerance was not surpassed) it should be maintained in the files.
3. We had a recent situation where the appraisal valuation changed the loan amount so we thought new disclosures needed. No fees changed at all and had a hard time deciding what reason for disclosures – no change in fees, only a change in payment and loan amount. Didn’t see that any of the allowed 5 reasons would apply?? Thanks.
I would agree that a revised Loan Estimate would be needed in this case due to the loan amount changing. Even though the fees didn’t change you still want to provide your borrower with the most accurate picture of their loan, including the payment amount. The appraised value changing would fit into a changed circumstance as information specific to the transaction (anticipated appraisal value) was inaccurate or changed after the disclosure was provided.
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