Randy, I'm not sure I follow....i see "changed circumstances" do NOT include the 6 pieces of information necessary to have a RESPA application UNLESS "the information changes or is found to be inaccurate after the GFE has been provided". Wouldn't this mean that if an applicant puts $75,000 down on their application as their income, but the subsequent tax returns that they provide to us only show an income of $50,000, we would have a "changed circumstance"?

Randy-I disagree-in the example rjenkins gives, if information (in this case income) given by the applicant is later found to be inaccurate, that would be a changed circumstance. One of the definitions of Change of Circumstance from the RESPA in Plain English:

"Changed situation or inaccurate information provided by the borrower after issuance of the GFE"

If you issue a GFE and the interest rate is floating and then you reissue the GFE due to the setting of the rate by the lender (for example, 45 days later)but the borrower has already indicated intent to proceed, does Line 2 in Important Dates change from the initial GFE? Is it 10 bus days from the date the revised GFE is provided to the borrower?

You can get 100 free booklets per location from HUD per year. Vendors forget to mention that. I called HUD 12/7 and they said still not available and don't order until they are. They suggested "call back after Christmas".

OK, I agree on the income, but the question is how does that really change the circumstances that are going to impact settlement costs and fees - unless you plan on denying the loan and making a counter-offer?

Mgmt asked this question "After closing, if we realize the charge was more and we will still be within the 10%, can we revise the HUD-1 and increase that charge and COLLECT the money from the borrower?" I told them no. Do you agree?

I know we can't deny the loan if everything the applicant provides us up front is accurate. However, I've instructed my folks that we can deny it if during underwriting is becomes evident that the facts are not the same and we would be unwilling to underwrite the loan based on the changed facts. For Example - ever know of a seller who overvalues their home? If they try to sell it for $500,000 and that is what the applicant applies for, but the appraisal comes in at $200,000 - would you really be willing to loan the customer $400,000? We may make a counteroffer or deny.

It is disturbing to me that none of the examples provided by HUD provide for this occurrence. I thought the "no-doc" loan was one of the reasons we had the mortgage crisis.

"I know we can't deny the loan if everything the applicant provides us up front is accurate."

Sure you can.

Question - if they provide accurate information, we've pulled a CBR and its great - everything is good in underwriting - why would we deny the loan? Other than failure to provide flood insurance or failure to verify identity - what reasons would there be at this point?

Kinda my thought....to me the issue is ...can we claim "changed circumstances" and re-issue a GFE? in the case that walden cites, you could re-issue the GFE based on the fact that the appraisal comes in with a drastically different value than what the applicant had listed.....kinda gets me thinking.....if you revise your GFE based on this, would that kind of get you out of the counteroffer part? I mean, you could look at your new GFE almost as being a counteroffer.

Does anyone have any direction on this:

If the borrower (by his own choosing) brings in at application, but prior to the GFE being delivered, bank statements, pay stubs etc - we can copy and use them?

Currently, a portion of our "application fee" covers the cost of the credit report, a fee that could vary between applications. Regardless of the cost of the credit report, our app fee remains the same. We are trying to figure out if and how we disclose it separately since technically, this is a third party charge. We will not collect the credit report fee up front. We will collect the entire application fee at the time allowed. Should we:

1) list the entire app fee in block 1, a credit in block 2 for the credit report, then re-post the fee in Block 3
or
2) list the credit report fee in Block 3 and the difference in Block 1

Part of my argument against option 1, would be the obstacle of not being able to check the "charge" box if the customer had to pay points. One of the solutions given to me was to offset the charge amount by the cost of the credit report. Can we do this?

I'm sorry if this was clarified earlier. I tried to go through the 44 pages of this thread for the answer, but can't seem to find anyone else with the same inquiry.

See the following HUD FAQ:
12) Q: If a revised GFE is provided due to changed circumstances or a borrower requested change, is it necessary to complete Line 2 of the ―Important Dates‖ section on the revised GFE if the shopping period has ended and the borrower has already expressed intent to continue with the application?

A: Yes, the loan originator must complete Line 2 in the ―Important dates‖ section. The date entered must be at least 10 business days from the date the revised GFE is provided to the borrower.

New Question - about capturing the applicant’s intent to proceed with the loan covered not by the initial GFE, but by a revised GFE, in order to charge fees other than for a credit report after that revised GFE is issued. The rule and FAQs don’t seem clear on this. I don’t see any postings on point.

In the event a revised GFE is issued due to an allowable changed circumstance, is there a requirement to capture the applicant’s intent to proceed for the loan that is represented by the revised GFE in order to charge fees? Or is the intent that was captured for the initial GFE sufficient to charge fees after a revised GFE is issued?

We don’t collect fees until closing, except for loans that withdraw, so we’re concerned that, if we issue a revised GFE, we have to capture intent before we could collect the fees in the event of a withdrawal after that point. What are the thoughts out there? Any gurus that can provide guidance based on anything HUD reps have indicated?

jsw-That is a good question. I don't recall reading specifically about obtaining intent based on a redisclsoure.
David had noted earlier intent can be as simple as verbally confirming with the borrower they intend to proceed. I came up with a checklist which will require one of the staff to document how intent was noted. Verbal confirmation is probably the easiest route.

If a bank has a closed-end credit home equity loan where the only fee charged to the consumer is the fee to record the mortgage, would it be safe to say that the very last figure on page 2 of the GFE which is the sum of A + B should equal the amount of the recording fee paid by the consumer plus the estimated insurance amount in block 11?

Odd day's interest is not collected on home equity loans. There is no escrow. The cost of the outside fee appraisal, credit report fee, the flood certification, the property search, the fee to file a notice of settlement(NOS), and a judgment search will all be paid for by the bank. These fees would be listed in blocks 3, 4, and 6 as appropriate and then a credit for the sum of such fees would be in block 2 box 2. The sum of the fee for the filing of the NOS and the mortgage recording fee would be shown in block 7. Block 1 would be zero.

If the appraisal is done by one of our in-house appraiser's, I would put the amount of the appraisal fee in box 1 and then make sure that the amount of the appraisal is included in the credit for box 2 and I would not list the appraisal in block 3.

Is this right?

I agree.

Thanks David. My bank viewed your 11/10 BOL webinar on completing the new GFE and HUD-1/HUD-1A forms and I wanted to make sure I got this right. I really learned alot from the webinar. You and Jerod did a great job!!

BTW - I heard that a major forms vendor is selling the "revised" HUD booklet to financial institutions. I am trying to get a copy of one to see what the heck they are selling.

Has anyone been contacted by a forms vendor aggressively pushing you to buy the "revised" HUD booklet now?

There is a vendor out there encouraging you to pre-order the booklets from them since they will fill order requests on a first come first serve basis once HUD releases the new booklet.

Well a client says they just RECEIVED the "revised" booklets and so they threw out all of the "outdated" 1997 booklets!

The loan officer misquoted (understated) the processing fee on the GFE - quoted $200, should be $250. Do we show $100 on the comparison chart in both the GFE column and the HUD-1 column because it is a zero tolerance charge?

The loan officer misquoted (understated) the processing fee on the GFE - quoted $200, should be $250. Do we show $200 on the comparison chart in both the GFE column and the HUD-1 column because it is a zero tolerance charge?

you can download a copy of the old booklet from the HUD website to use until new ones are available...if you need some in the interim...just go print some out.

I have what I think is an odd twist to this:

Loan officer just asked if we list the total for title services in box 4, must we also list this in box 6, since it would be a required service that the borrower can shop for?

{I guess we're going to let the borrower shop for it. That's a whole 'nother question...}