Receive an application,GFE etc from broker on 1/5/10; The Broker's GFE did not include any of our fees. Do we send an Adverse Action or can we issue a new GFE by 1/8/10 based on changed circumstances?

What would be the reason for denying the loan on your Adverse Action?

If you accepted the brokers GFE and application then you have to honor it. The broker not doing the GFE correclty is not a changed circumstance so you can't issue a new one.

We have decided we are going to review the brokers GFE and if they did not include our fees, they'll have to shop the loan somewhere else.

I have (am still) having problems with the Broker issued GFE. Am I correct in thinking that if the Broker issues the GFE and he shops the deal to our bank, if we accept the deal we have to go along with all his disclosed fees? Previously we were brought the deals (normally after they had been turned down by other Lenders - we accepted Borrowers who were not A/B paper - and we would renegotiate the terms with the Broker, lower loan amount, higher interest rate and fees etc. Now we would not be able to do this if the Broker had isued a GFE, is that correct?

Yes, that is correct. Once the lender accepts the broker's package/GFE, they are bound by all terms and fees disclosed on the broker's GFE. Unless you implement a process such as jlroberts noted above and review the broker's GFE prior to accepting their package, you are pretty much stuck with the terms/fees the broker disclosed.

Thanks Chance. I guess I had it, just doesn't seem right, but I could say that about a lot of these changes :-)

If you don't mind I would like to revisit this issue once again. We have had some difference of opinions on this throughout our bank so we contacted a Compliance Firm that we can refer to at times for questions.

We have a Brokerage Company that lets say takes a loan file 10/02/10 and is trying to shop the loan around. On 11/5/10 they come to us to see if we can sell the loan. We were told by this Compliance Firm that as long as the 10 days (or whatever date was put in Block 2 in important dates) had passed, then we can reissue a new GFE in our name.

The reason this has come up is b/c the Investors are telling us that all disclosures HAVE to be in our name and not that of the Broker Company, but it was our understanding that we were bound by that Brokers GFE if it was disclosed???

Thanks for any clarification.

Partial answer - RESPA Q&A


8) Q: Are the following sufficient to establish "changed circumstances"; consistent with 24 CFR § 3500.7(f)?

i) A mortgage broker issues a GFE that the lender does not accept.
A: This does not constitute a changed circumstance.

KT, the 10 days is only for the borrower to express intent...if the borrower never expressed intent, then you can re-issue...however, if the borrower expressed intent, you are bound by that GFE.

Chances of a borrower NOT expressing intent within 10 days usually means they went somewhere else.

OH! And Happy Birthday!

My question is if the borrower did not express intent, why is the borker forwarding the application to a lender?