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Timing of a revised loan estimate

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  • #6466
    jholzknecht
    Keymaster

    Submitted in 10/16/14 Compliance Master Group Session

    When you have a Changed Circumstance that requires a revised Loan Estimate and the Loan Estimate is sent to the borrower via email (and you have complied with E-Sign Requirement). Do you have to have “evidence” that the borrower received the revised Loan Estimate? Everything we have read indicates no as long as you deliver or place in the mail the revised Loan Estimate at least 7 business days before consummation. But if we wanted to waive the additional 3 day waiting period to close sooner then we would need evidence. Otherwise no evidence is required. What would constitute “evidence”? Will a “read receipt” suffice or do you need to prove that they were able to “download” the attachment?

    #6467
    jholzknecht
    Keymaster

    Section 1026.19(e)(4) requires delivery of the revised Loan Estimate within three business days of receiving information sufficient to establish a reason for providing the revised disclosure. The revised Loan Estimate does not have to be provided seven business days before disclosure.

    Section 1026.19(e)(4)(ii) requires that the consumer must receive a revised Loan Estimate no later than four business days prior to consummation, and provides that if the revised disclosures are not provided to the consumer in person, the consumer is considered to have received the revised version of the disclosures three business days after the creditor delivers or places in the mail the revised disclosures. If, however, there are less than four business days between the time the revised version of the disclosures is required to be provided and consummation, creditors comply with the requirements if the revised disclosures are reflected in the Closing Disclosure.

    Example: If the creditor is scheduled to meet with the consumer and provide the Closing Disclosure on Wednesday, and the APR becomes inaccurate on Tuesday, the creditor complies with the redisclosure requirements by providing the Closing Disclosure reflecting the revised APR on Wednesday. However, the creditor does not comply with the redisclosure requirements if it provided both a revised version of the Loan Estimate reflecting the revised APR on Wednesday, and also provides the Closing Disclosures on Wednesday.

    #6469
    Mary Frances
    Member

    Sorry this is so long… We are probably making this way too hard but we are trying to decide if the bank needs different software to “prove” the borrower was able to open an attachment when we email the Loan Estimate, revised Loan Estimate or the Closing Disclosure.

    We read 1026.19(e)(4)(ii) but we also read this in the Sept. 2014 Small Entity Guide (page 48-49) which is where we got the 7 business days:

    Are there any restrictions on how many
    days before consummation a revised
    Loan Estimate may be provided?
    (§ 1026.19(e)(4))

    Yes.

    •The creditor may not provide a revised Loan Estimate on or after the date it provides
    the Closing Disclosure.
    •The creditor must ensure that the consumer receives the revised Loan Estimate no later
    than four business days prior to consummation. If the creditor is mailing the revised
    Loan Estimate and relying upon the 3 business day mailbox rule, the creditor would need
    to place in the mail the Loan Estimate no later than seven business days before
    consummation of the transaction to allow 3 business days for receipt. (§ 1026.19(e)4 ;
    Comment 19(e)(4)(i)-2)

    So if we do not want to wait the 7 business days and want to show evidence that the borrower received the email delivery of the revised loan estimate earlier. What would be our evidence?

    Example of Electronic Delivery from the official interpretation of 1026.19(e)(1)(iv) says:
    Electronic delivery. The three-business-day period provided in § 1026.19(e)(1)(iv) applies to methods of electronic delivery, such as email. For example, if a creditor sends the disclosures required under § 1026.19(e) via email on Monday, pursuant to § 1026.19(e)(1)(iv) the consumer is considered to have received the disclosures on Thursday, three business days later. The creditor may, alternatively, rely on evidence that the consumer received the emailed disclosures earlier. For example, if the creditor emails the disclosures at 1 p.m. on Tuesday, the consumer emails the creditor with an acknowledgement of receipt of the disclosures at 5 p.m. on the same day, the creditor could demonstrate that the disclosures were received on the same day.

    So does the acknowledgement of receipt mean the email was opened or the attachment was opened?

    #6480
    rcooper
    Member

    The email acknowledgement from the consumer would indicate they had received the disclosures via email, not necessarily that they had opened/read it. If you plan to email the disclosures you must also comply with the E-SIGN Act which will include, among other things, evidence that the consumer can access documents in the form they will be sent (demonstrable consent).

    Here’s a link to the E-SIGN act on BOL: https://www.bankersonline.com/regs/esign/esign.html

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