RESPA GFE For Incomplete Application?
by Dan Persfull, BOL Guru Guru BIOS
Question: I understand that once an application is taken and credit is pulled the lender has 3 days to mail or have the customer sign RESPA GFEs. However, what does a lender do if the customer is looking to purchase a home or is just shopping and the information to complete the application or GFE is insufficient such as loan amount, etc. What does the lender do at this point?
Answer: First, your disclosures are required at the time of application, or within 3 business days after receipt of the application. When you pull the credit report has no bearing on this requirement.
Second, look to the definition of an application in 3500.2(b).
Application means the submission of a borrower's financial information in anticipation of a credit decision, whether written or computer-generated, relating to a federally related mortgage loan. If the submission does not state or identify a specific property, the submission is an application for a prequalification and not an application for a federally related mortgage loan under this part. The subsequent addition of an identified property to the submission converts the submission to an application for a federally related mortgage loan.
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