On our secondary market loans (FNMA) there is a .25% delivery fee based on the loan amount. On the original GFE the loan officer forgot to disclose this fee. The loan amount was $125,000 for a fee of $312.50. Later on down the road the Customer decides they would like the loan amount to be $130,000. This would be a chaneg of circumstance and our .25% delivery would be affected. Now here is where the question comes in...it seems like we would be able to disclose the higher fee of $325 on the reissued GFE no? What about the original tolerance violation?

You could disclose the $12.50 on the revised GFE as that is all that changed with the change of circumstances.

This is interesting to me and i'm sure someone with more knowledge than me will opine, but i'm fairly certain the intent of RESPA is that if you forget a fee, you're stuck. However, it doesn't quite seem right (i know, i know, very little seems right about RESPA) that, if the loan amount were to increase (maybe several times), you would have to continue to eat even the increase. Makes me wonder if you could claim a changed circumstance, not to recapture the error of the original omission, but to disclose .25 of the increased loan amount ($5,000)....(what, like $12.50). I'm guessing no, you couldn't....just a thought.

So we would still have to eat the original omission but not the additional $12.50 is what you are saying? I get what you are saying riatchjay, the intent of the law is to make sure that you are showing the correct fees for the customer, in this case we did not follow the intent by accidentally not disclosing that delivery fee, however why should we be on the hook for more and more if the customer wants to change the loan amount?

Randy agrees....i'd go with what he says and re-disclose the $12.50 if you want.

Makes perfect sense, except we didn't change anything on the reissued GFE (continued to show no delivery fee) so now we must credit the entire $325.00 right??

I would say so, yes.

agree

Two questions?

Why a credit? A fee you did not disclose in 801 or 802 is a fee you now have to eat. The way I see it you charge the 12.50 and eat the other 312.50 on your GOS.

If the rate has not been locked couldn't you disclose the fee on 802 as a charge for the rate chosen? Our system defaults the market condition on 801, some of the other fees may not be known at the time of the GFE. Once we find out there are additional fees (credit score, LTV, secondary financing) we give the borrower the choice to pay the delivery fees in cash (802) or in the rate.