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#1389148 - 05/11/10 05:41 PM
redisclose GFE ?
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Joined: Sep 2009
Posts: 296
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I know that under the revised RESPA rules, if the customer did not lock the rate at the time of the initial GFE, then a revised GFE is required when the rate lock does occur. If there were no changes to the rate or related charges, is a GFE still required?
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#1389158 - 05/11/10 05:46 PM
Re: redisclose GFE ?
drewella
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Posts: 47,674
Bloomington, IN
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Yes. When the consumer locks the rate that will have an affect on the important dates section and you must update that section.
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The opinions expressed are mine and they are not to be taken as legal advice.
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#1389291 - 05/11/10 07:54 PM
Re: redisclose GFE ?
Dan Persfull
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AH SO! Thank you so much! You are correct!
I wonder if all of the GFEs that are flying around are really helping the consumer better understand what they are getting in to?
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#1389331 - 05/11/10 08:23 PM
Re: redisclose GFE ?
drewella
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Curled up by the fire...
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I wonder if all of the GFEs that are flying around are really helping the consumer better understand what they are getting in to? I'm gonna go with .....NO! LOL!
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#1389359 - 05/11/10 08:47 PM
Re: redisclose GFE ?
Mrs. Rizzo
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Makes auditing a loan file a real treat!
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#1389601 - 05/12/10 02:32 PM
Re: redisclose GFE ?
Truffle Royale
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Bloomington, IN
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Q&A 19 on page 8 does not refer to the "initial" GFE or rate lock. It simply refers to if the consumer locks the rate after the GFE has been issued the originator must issue a revised GFE updating the important date sections. Extending an expired rate lock would be initiating a new rate lock after a GFE has been issued and IMO require a revised GFE reflecting the changes the extension had in the important dates section of the GFE.
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The opinions expressed are mine and they are not to be taken as legal advice.
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#1389713 - 05/12/10 04:21 PM
Re: redisclose GFE ?
drewella
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So, this may be a rather stupid question but I'm going to ask anyway. When the rate is locked, then the date on line 1 of the Important Dates section would state the rate lock date and line 3 would also need to be completed. Correct? I read through Important Dates section of the FAQ and didn't find anything about this. The lender's argument is that all of that information is on the rate lock agreement.
Is the day the rate is locked considered a "borrower requested change"?
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#1389765 - 05/12/10 05:25 PM
Re: redisclose GFE ?
Brock
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Bloomington, IN
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Drewella, the rate lock agreement is not a GFE and when the consumer locks the rate is the only time the loan originator must issue a revised a GFE.
Line 1 would be updated to show the date the rate lock agreement expires and line 3 would specify the number of days the applicant must go to closing after the rate is locked.
Brock, no it does not change my opinion. The redisclosure requirement is based on the fact the consumer locked the rate. Not whether the change is detrimental or beneficial. The rate lock changes the important dates section from the date of the rate lock therefore HUD is saying you must redisclose these dates to the consumer. Whether you or I see the reasoning is of no consequence, it's what HUD requires that matters. You will have to contact them for the reasoning of this requirement.
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The opinions expressed are mine and they are not to be taken as legal advice.
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#1389808 - 05/12/10 06:05 PM
Re: redisclose GFE ?
Truffle Royale
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Does not change my opinion. That question is under the changed circumstance section and the Q&A is stating the request for a new rate lock period would be a changed circumstance allowing a revised GFE.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.
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#1389888 - 05/12/10 07:37 PM
Re: redisclose GFE ?
Truffle Royale
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Well, my original question was concerned an initial rate lock that occurs after the GFE is issued. So per #19 we MUST reissue. Merci
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#1394291 - 05/20/10 08:11 PM
Re: redisclose GFE ?
Truffle Royale
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The Swamp
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okay, different question. We instituted rate locks for HPML and HMDA purposes. They are not particularly customer driven, but we use a rate lock sheet that the borrower acknowledges and lock the rate for 30 days. I would think that these would be handled the same way for the important dates section. I don't know of any reason it has to be customer requested...any arguments ??
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#1470525 - 11/19/10 04:19 PM
Re: redisclose GFE ?
RR Joker
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So, if you were going to honor the initial rate, after the lock as expired, you would re-disclose with the same rate lock date, and just adjust the lock period? I'm assuming you would have to keep the same rate lock date, correct? If you didn't your rate lock date & Index would not match.
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#1470554 - 11/19/10 04:45 PM
Re: redisclose GFE ?
Lauren83
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Bloomington, IN
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How about Q&A 19 on page 8? If by "acknowledges" you mean the applicant is agreeing to lock the rate for those 30 days then no arguments. But unless they are agreeing to the lock then I'll refer back to Q&A 19 because unless they expressively agree to the lock they are not locking the rate.
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The opinions expressed are mine and they are not to be taken as legal advice.
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#1470571 - 11/19/10 05:03 PM
Re: redisclose GFE ?
Dan Persfull
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The Swamp
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They sign the rate lock sheet, so I would say they truly are acknowledging it.
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My opinion only. Not legal advice. Say you'll haunt me - Stone Sour
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#1471269 - 11/22/10 08:02 PM
Re: redisclose GFE ?
RR Joker
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In a previous life I worked for a large bank that only required a GFE to be re-disclosed for rate locks and extensions if rate or fees increased. No need to re-disclose if rate/fees were the same or lower. (policy for new RESPA, not referring to guidelines before Jan 2010). I checked with someone still working for that bank and the policy has not changed.
I've recently learned at the bank I currently work at that not only is a new GFE required for locks and extensions, but if it isn't done w/in 3 days, the file won't be sold on the secondary market and will instead be closed as a portfollio loan using the secondary market rate/fees due to an incurable violation. Not a fun lesson to learn the hard way.
Anyone else gone through a similar situation after missing the 3 day window for re-disclosure after lock or extension?
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#1471295 - 11/22/10 08:44 PM
Re: redisclose GFE ?
Clif741
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Bloomington, IN
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If you missed your 3 day window you no longer have a qualified changed circumstance and have no basis for issuing a revised GFE and must live with the fees previously disclosed and in most cases this will likely put the loan outside the approved perimeters for the secondary market.
BTW...when the consumer exercises a rate lock option the lender must issue a revised GFE within 3 business days under the current rules.
Last edited by Dan Persfull; 11/22/10 08:52 PM. Reason: Add comment.
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The opinions expressed are mine and they are not to be taken as legal advice.
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#1471354 - 11/22/10 09:28 PM
Re: redisclose GFE ?
Dan Persfull
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To follow-up on this a bit...
If you have not issued a revised GFE for a fee within 3 days (say it was appraisal came back with Pest and Dry Rot) what do you think the proper procedure is?
I am getting that you go ahead and issue the revised GFE, to give an accurate view of costs, then remedy it with a lender -credit 'cure' on the Hud-1 for the fee. So Bank are disclosing the fee but doing cure by paying bank paying for it.
ETA: (and of course some high-intensity training for the staff who didn't issue it)
Last edited by Avanti; 11/22/10 09:29 PM.
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#1471385 - 11/22/10 10:08 PM
Re: redisclose GFE ?
Avanti
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Posts: 47,674
Bloomington, IN
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I am going to assume the Pest / Dry Rot discovery in the appraisal mandated a pest inspection. This would be a qualified changed circumstance allowing you to issue a revised GFE showing the inspection costs.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.
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