They're wrong. Send them back to reread the reg in the section mentioned in on of the previous posts in this thread.

Oh, hey, thanx Princess!! I don't know much about the inner workings of Laserpro. That is nice to know. 'Course you KNOW what will happen!! The lenders will just back-date the signature line 3 days before the date the loan papers are being signed.

The only other 3 days that can come into play is if you mail the corrected disclosure. You have to give 3 days for receipt purposes before you can start your 3 day wait period...thus enters 6 days.

But I am still wondering...did the definition of application change for this?

It changed in RESPA - which drives the GFE.
Or do we ignore that (plus all the other RESPA stuff) until January?

I only thought I was confused. Do we give good faith on all consumer dwellings also?

I can't even think of a consumer dwelling closed-end loan that would not have a GFE.

Manufactured home with no land?

Good evening. It's been awhile since I've studied the 226.22 tolerances for APR. Now that it's critical for redisclosure and additional waiting periods, I find myself second guessing the APR tolerance rule in the following instance. Can anyone set me straight?

If we offer a client an interest rate of 6% (no fees) send out our ETIL with this rate and corresponding APR and later drop the rate, must we redisclose the ETIL and wait an additional 3 business days? The additional tolerance seem to only apply when there has been an error in the finance charge--which is not the case when the bank resets the interest rate. Right?

true! There is one!

Tolerances in general are + or - .125% for regular loans and .25% for irregular. That't the APR.

so, even tho it's to the borrower's benefit...it appear you would potentially have to redisclose.

I don't know about this. i am still trying to understand the language on page 10.

Commenters requested guidance on whether corrected disclosures are required if
the APR initially disclosed under § 226.19(a)(1)(i) overstates the actual APR. Comment
19(a)(2)(ii)-1 provides that corrected disclosures are not required when the APR
previously disclosed is considered accurate under the tolerances in § 226.22.

Those are general tolerances...it's hard to try and repeat the entirity of .22.

However, I don't agree that the language set forth in the regulation, applies to only finance charge tolerances.

Thanks.

My head hurts.

I am doing a training of this, this morning for loan staff.
Wish me luck.

So bottom line, anything that changes the APR to more than .125 +/- needs a new TIL and the 3/6 day clock is reset, right?

It appears to me that the additional tolerances for accuracy apply to errors in the finance charge. In this case, the initial ETIL finance charge accurately reflects the terms of the loan. The rate subsequently declined therefore the APR declined as well. If the decline exceeds the 1/8 or 1/4% tolerance it appears that redisclosure and the new 3 business day (6 bus day if mailed) applies.

Also, the APR could go down in cases where finance charge fees stay the same, but the note amount increases or the term increases. It appears that in this case a new ETIL would also be triggered since the difference in APR is not due to a Finance Charge Error.

I'd really like for someone to tell me that this is not the case and that a reduction in the final APR is not a trigger for a new ETIL, to avoid backlash from my mortgage lenders and retail bankers....

If the APR changes, you must redisclose the APR and other changed terms. The APR is the driving force behind redisclosure. If the only inaccuracies involve estimates other than the APR and no variable rate feature has been added - no new disclosure is required. If you hand delicer the revised disclosure, you must wait 3 business days. If you mail the revised disclosure, you must wait 3 business days for the customer to receive the disclosure and then 3 busness days to close. If you mail the redisclosure on Thurs June 4th, they are considered received on Mon and you can close on or after Thurs June 11th. You must also consider whether 7 business days have passed from the time you gave the original early TIL. (in this example, 7 days have passed)

So I'm taking it that the answer to my question is yes, correct?

[So bottom line, anything that changes the APR to more than .125 +/- needs a new TIL and the 3/6 day clock is reset, right?]


That's correct for a regular transaction.

Please define 'regular'.

Simply put, anything that is not "irregular". Irregular would be like a construction loan where funds are made available (advances) as the home is being constructed. (more complex type transactions)

See Reg Z Commentary 226.22 for an in-depth explanation.

Here is a home loan example where no GFE is required- If the collateral is 25 or more acres -RESPA does not apply.

another very good example!

However, both the example of the Mobilehome no land and 25 ormore acres, is a moot point, since MDIA still only applies to RESPA-related loans.

To me, this is the only decent thing about some ofo these changes...in a nutshell, Reg Z has been expanded to all of the categories RESPA already covers...but not more.

But then, that wasn't what actually spurred this conversation. We were talking loans that are covered by Z, but not by RESPA...SO...you should only have a final TIL on the above-mentioned exempt (from RESPA) loans.

I'm not convinced that the other tolerances for accuracy of the APR found further in 226.22(a) are not available to us when determining whether a new ETIL is required. The July 30th changes reference the accuracy rules in 226.22 which go beyond the 1/4 and 1/8% general rules.

Has anyone reviewed section 226.(a)(4) and 226.(a)(5) to assess whether a decrease in APR triggers a new ETIL? This is a critical item to understand and I'm not hearing anyone considering the additional paragraphs regarding accuracy found in 226.22 (a)(4&5).

226.22(a)(4) references 226.18(d)(1) which states that an understated finance charge of $100 or less as well as an overstated finance charge along with the corresponding APR are considered accurate.

Section 226.22(a)(5) provide additional tolerance beyond the 1/8-1/4% (general tolerance) if the actual finance charge and resulting APR are closer to the finance charge and APR that would have been disclosed if a $100 finance charge error would have occurred.

I, too, would like opinions and hopefully documentable evidence that we do NOT need to redisclose if the APR drops "beyond tolerance" in the customer's favor(fingers are crossed here....). Thank you.