If- after we send the GFE -the applicant changes their mind and askes for a fixed rate vs an ARM or they ask for a product with a prepayment penalty, are we required to issue a revised GFE to update the Summary of Your Loan section on p.1?

Yes, along with a bunch of other reasons. All those listed are considered a changed circumstance, which requires a new GFE within three business days. The fees for the new product or changed circumstance must remain available for 10 business days. Here are the cons for not providing a new GFE:

Do you intend to honor all the fees and terms on the original GFE for the new product?

What if the fees are higher on the other product, are you willing to give that loan at a lower cost to the borrower.

If they want a loan with a PPP, problem is you can't charge it if you didn't disclose it.

Fixed rate loans sold to the secondary market require title endorsements that adjustable rate do not require. Is the bank willing to pay for those endorsements? It will have to if they didn't disclose them on the original GFE.

I thought I read here that the ten days are not refreshed when you give a revised GFE? ALso, are you saying that if the customer changes to a prepayment penalty product you must redisclose the GFE in order to enforce your prepayment penalty?

True - the ten days are not refreshed IF they have already expressed their intent to proceed.

As for the PPP, that is our understanding. Otherwise how would the borrower know that they are applying for a loan with a PPP? We would issue a new GFE because our fees, terms and rates are different on those products. We would also give them a proper ARM Disclosure with the PPP box checked as well as a new TIL with the PPP box checked.

Thanks. 1:41 AM seriously???

To tag onto this post...

If the loan amount changes, but neither the fees nor the APY changes, are we REQUIRED to reissue?

I found my answer here.

Didn't look at the answer you found - you are not required to issue a new GFE. You can, but you don't have to. If the borrower locks the rate you MUST issue a new GFE (the only time you are reuqired to do so).

When rate locked and revised GFE is issued do you redate the date of the GFE or leave the original date? (Referring to date under property address).

What happens if you don't issue a revised GFE w/in 3 days of lock? I know HUD says you have to issue one, but in the real world things are not so cut and dry. Do they expect that you won't do the loan? What if you were giving the borrower a great deal? I mean in the past you were required to give a GFE w/in three days of application, but it wasn't a deal breaker if it went out on day 4 once in a while. I just think there needs to be some guidance on what we can do to fix problems when they arise. Because they are going to arise, and it just doesn't make sense to say the loan is dead.

There is never a cure for missing a delivery timing requirement. It's a violation plain and simple but some disclosures still have to be delivered but in doing so it does not negate the timing violation.

IMO, if you don't issue the revised GFE within the 3 business days then you are bound by all the fees disclosed on the original GFE and if you are found to have issued the GFE after the 3 day requirement and you adjusted the fees based on the revised GFE you could possibly be required by your regulator to adjust the closing fees on the SS to the original GFE figures and refund accordingly. However, since I have not seen any exam procedures this is purely speculation.

I agree with Dan. You have 3 days to issue the revised GFE. After that - you lose the opportunity.


The date of the GFE (upper right hand corner) changes to the date prepared/sent. #2 in the "Important Dates" section remains the same as the original GFE.

I understand that it is a violation and we don't want it to happen and I totally understand about the fees, but my question concerns the case when you lock in the rate and none of the fees change. If we failed to give a new gfe w/in three days of lock, should we go ahead and issue the revised GFE on day four or just not do one at all?