I've searched the posts and haven't found an answer to my question.

Per the RESPA FAQ's:

5) Q: If circumstances change, may a loan originator issue a revised GFE with changes to all of the charges and terms related to the loan?

A: No, the loan originator may only change those charges and terms that are affected by the specific changed circumstance.

If we redisclose a loan because of a rate lock, do you see any issue with also disclosing lowered fees--items that will benefit the customer?

I'm getting different responses from different places--Some say you can't change anything not affected by the changed circumstance. Some say who would complain if you disclose fees that have been lowered. Isn't the whole idea of the regulation to ensure that the customer knows what to expect at closing?

What do you think?

You only revise the charges affected by the changed circumstance all others remain the same.

I went round and round with a HUD rep on this topic a few days ago. When I asked how to explain to a borrower (or a lender) that we aren't allowed to show them any lower costs until they review the HUD she said "tell them it's the law."

I hate to say it but this is one area where I think HUD makes sense by saying you can only change the fees directly affected by the changed circumstance. You've already given your best guess on the Good Faith Estimate. The actual final costs are supposed to be shown on the HUD, not on another estimate.

Same topic different question.....are your required to redisclose the GFE if no fees change but the loan amount goes up by a immaterial amount, i.e. $1,000?

no.

Is there anything in particular that I could quote? I have a third party misinterpretation I am arguing with.

Anything I can quote besides the fact that the FAQ's state "may" for redisclosing and that the GFE is an estimate of the settlement charges it is not a loan commitment?

Quote them the FAQ that says the lender MUST redisclose for a rate lock. Point out that is the ONLY time HUD says you must redisclose. Hopefully, they can connect the dots from there.

If you are trying to convince a secondary market investor though, you may be simply wasting your time to convince them... several do require that the GFE be redisclosed in the event the loan amount changes from the intitial, regardless if it fails to effect any other changes.

We were recently audited and were slammed because we had changed fees to a corrected, lower amount that were not related to the changed circumstance. For instance. We knew the credit report cost was lower, we also had more accurate (lower) figures for the Homeowner's insurance so that fee changed. Our argument was the same as original post. We felt it was in the best interest of the customer to give them the most accurate information we had at the time.

The response we got was that those fees were not allowed to change. They gave no weight to our intentions. Even if the insurance premium we know to be $550, we have to always say it is $600 on the GFE. That figure cannot change.

RESPA is very clear on the fact that nothing can change on a redisclosed GFE except those fees directly affected by the changed circumstance. Period. Doesn't matter if you do it with the best intentions or it benefits the borrower. So unfortunately, I'm not surprised that you got slammed.

The only way I can wrap my head around this is to keep reminding myself that the GFE is no longer a 'good faith estimate'. It is a 'worst case scenario'. To enforce that, I always refer to it as a GFE whenever I'm talking about it too.

I think a light bulb just went off for me. The fees should be accurate at closing on the HUD and can go down, up within tolerance or cured if it is in excess of the tolerances. It's just that the GFE can't change unless there is a change of circumstance and then only the fee(s) that is affected. So at closing you can have a GFE with a higher dollar amount in any given section as long as the fee is the same or less on the HUD? If the TIL is affected it needs to be reissued within 3 days of closing. Do I have it straight in my mind yet?

I love when that happens, but then you wonder why you were such a dolt all along for not getting it sooner! Thanks!

I thought the purpose of the GFE was to allow the borrower the ability to shop. Guess not! Does it change anyone's answer on the lowered fees question if the borrower has not expressed an intent to proceed or what if they revoke their previously expressed intent to proceed. Here is the problem, borrower goes to lender 1 and gets a gfe and says he intends to proceed, then borrower goes to lender 2 with GFE in hand and of course they can beat those numbers because lender 1 put together a worst case scenario. Now borrower goes back to lender 1 and says can you match this or do any better? Lender 1 says yes but I can't issue a new GFE to show you that. Borrower goes with lender 2. Makes no sense.

That's why HUD = DUH.

And that's why giving a seperate sheet that explains actual costs vs what's on the GFE is a good idea.

Beyond that, how many borrowers do you know who are actually shopping the loan? Around these parts, the borrower has already called around for rates and only applies at the place they've decided to do business with.