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Is it necessary to have a new GFE if the amount of the loan changes before the closing of the loan?
by Andy Zavoina, BOL Guru

Question: Is it necessary to have a new GFE if the amount of the loan changes before the closing of the loan?

Answer: New GFEs during the application process are not required unless you have a change in the APR (see the cite below). If there is a change, you need only make the disclosure prior to/at consummation.

That said, it is always a good idea to provide new disclosures when changes are substantive (loan amount, payment, etc.) and a final truth in lending at closing. This will keep you in compliance with "Z" and provide optimal customer service so there are no new surprises.

226.19 Certain residential mortgage and variable-rate transactions.

(2) Redisclosure required. If the annual percentage rate at the time of consummation varies from the annual percentage rate disclosed earlier by more than 1/8 of 1 percentage point in a regular transaction or more than 1/4 of 1 percentage point in an irregular transaction, as defined in 226.22, the creditor shall disclose all the changed terms no later than consummation or settlement.

First published on 2/2/03

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