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#1643110 - 12/23/11 09:23 PM Comparison Chart and Improperly Revised GFEs
JSW3178 Offline
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How is the GFE column in the Comparison Chart completed if there have been multiple revised GFEs, but some of the revised GFEs contained, in addition to increased charges related to an allowable changed circumstance, increased charges not related to those circumstances?

Should just the figures from the most recent GFE be used, even though that one contained some unallowable increases along with the allowable ones? Or, rather, should the lender analyze each charge and insert the value from the last time it was reflected on a GFE properly, thereby rending the GFE column unsupported by any single GFE version? Or the last option I can think of does the lender revert back to the last entirely proper GFE and use the values from that, despite the intervening occurrence of legitimate changed circumstances?

Many thanks!

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#1643186 - 12/24/11 02:45 AM Re: Comparison Chart and Improperly Revised GFEs JSW3178
Truffle Royale Offline

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I'd go with option three, going with the last entirely proper GFE.
And then I'd have the most intense training session ever using all of these as the examples of what this kind of nonsence costs the bank, and how bank costs = no bonuses. wink

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#1643345 - 12/27/11 05:51 PM Re: Comparison Chart and Improperly Revised GFEs JSW3178
RulesFollower Offline
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We review charge by charge....if we had a valid changed circumstance that increased the Title Services, for instance, and the recording fees were inadvertantly increased then we would use the most recent disclosed figure that was correct for recording fees.

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#1643389 - 12/27/11 06:43 PM Re: Comparison Chart and Improperly Revised GFEs RulesFollower
Kathleen O. Blanchard Online

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Originally Posted By: RulesFollower
We review charge by charge....if we had a valid changed circumstance that increased the Title Services, for instance, and the recording fees were inadvertantly increased then we would use the most recent disclosed figure that was correct for recording fees.

Doing this charge by charge gives me some concern. I don't think a regulator would expect a consumer to root through disclosures to figure out what they were told. A consumer would expect an entirely correct disclosure. I could see that potentially being cited as UDAAP.
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#1643456 - 12/27/11 08:16 PM Re: Comparison Chart and Improperly Revised GFEs JSW3178
RulesFollower Offline
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Maybe I didn't explain this very well....when we go to closing the latest GFE fees are inserted on the comparision chart, we can all agree on this.

Because we manually review fees line by line from one GFE to the next in our pre-closing audit it is obvious if one of the fees has been inadvertantly changed in the absence of a valid changed circumstance. In that case we go back to the most recent "correct" fee for that line and use it on the comparision chart. We would not take fees from all lines of that previous GFE for the comparision chart, just the fee in question. This may or may not be a pleasing practice for everyone but our compliance officer felt it was the most conservative way to handle the mistake of changing a fee from GFE to GFE in the absence of a valid changed circumstance.

Of course we only apply this procedure to fees subject to a tolerance on the comparision chart and let me add that this is a rare occurance at our bank.

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#1643741 - 12/28/11 04:24 PM Re: Comparison Chart and Improperly Revised GFEs JSW3178
Truffle Royale Offline

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Rules, Now that you have the knowledge, I think it would be to your bank's benefit to print out Kathleen's response and give it to your compliance officer. (S)He may not have thought of the potential UDAAP concerns when they decided to go to the last correct charge.

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#1643795 - 12/28/11 05:21 PM Re: Comparison Chart and Improperly Revised GFEs JSW3178
RulesFollower Offline
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How can this be construed as unfair or deceptive when it is always to the benefit of the customer??

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#1643832 - 12/28/11 05:42 PM Re: Comparison Chart and Improperly Revised GFEs JSW3178
RR Joker Offline
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The Swamp
That was kinda my thought, RF...if the fees grew without a valid CC, then going with the prior lower fee (which should have been carried over to the revision) seems in the customers best interest.
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#1643852 - 12/28/11 06:00 PM Re: Comparison Chart and Improperly Revised GFEs JSW3178
Kathleen O. Blanchard Online

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My concern was the construction of a chart composed of fees from various GFEs could be deceptive. It should be a chart comparing one GFE to one HUD 1. How could a compilation of fees from more than one GFE be construed as proper disclosure?
Last edited by Kathleen B; 12/28/11 06:16 PM.
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The HMDA Academy
www.kaybeescomplianceinsights.com

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#1643883 - 12/28/11 07:00 PM Re: Comparison Chart and Improperly Revised GFEs JSW3178
RulesFollower Offline
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Well none of this is "proper" as we are discussing what to do when you don't do what you are supposed to do...our feeling is that the most conservative approach is best which would be to go back to the last correctly disclosed fee for that line.

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#1643889 - 12/28/11 06:54 PM Re: Comparison Chart and Improperly Revised GFEs JSW3178
Kathleen O. Blanchard Online

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I realize that, but I do not think picking amongst various GFEs is the way to go about this. I think you are making it worse by constructing a false comparison and that this practice could be viewed as deceptive as it creates the impression there was a GFE with all of those fees in it. A customer would have to go to several GFEs to find those fees.

My opinion!

If you get it by your examiners, great.
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Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

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#1643890 - 12/28/11 06:56 PM Re: Comparison Chart and Improperly Revised GFEs JSW3178
Truffle Royale Offline

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The revisions of RESPA were all about stopping deceptive practices that led borrowers into foreclosure and bankruptcy. The new GFE was suppossed to make things easy to read and clear to the borrower.

While I suppose you could make an argument for your approach, it would take a borrower with the knowledge of a...well, one of us to decipher how you're going about fixing your mistake by taking one fee from this disclosure and the next fee from another. I doubt, as apparently so does Kathleen, that you're going to be able to hold up your end of the argument when your examiner sees this on your HUD. And while you acknowledge that it's a 'rare occurrance' if it happens more than once, examiners are prone to site it as a 'pattern and practice'.

All I was suggesting was that you might want to show your CO this discussion and let them decide whether a re-examination of their initial stance was warranted. Forewarned is forarmed and all....

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#1643925 - 12/28/11 07:54 PM Re: Comparison Chart and Improperly Revised GFEs JSW3178
RulesFollower Offline
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Truffle, you are right...this is all about the borrower being able to shop and if we inadvertantly show an increase in a fee how is that hurting the borrower and their ability to shop, and if we use the lesser fee on the comparision chart how is that hurting the borrower and their ability to shop? All any of this could do is hurt US by losing a customer because they think our fees are too high or having a tolerance cure on the HUD.

Kathleen, we are not picking amoung "various" GFEs. As I said this is not common here but when we came across the 1st example of a fee increasing without a valid changed circumstance our compliance officer made that executive decision to not "pad" the comparision chart with the inflated fee but to use the "correct" fee from the prior GFE. I guess we are just left to decide individually which "deceptive practices" we want to avoid.

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#1644068 - 12/29/11 01:29 PM Re: Comparison Chart and Improperly Revised GFEs JSW3178
RR Joker Offline
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It's a no win situation, really. If you use the most recent GFE, you have incorrectly disclosed. If you use those 'inflated' charges, you could be 'padding' your comparison.

If you are trying to correct a couple of situations where it was done incorrectly, rather than picking an choosing among several GFE's, it may make more sense in the long run to prepare a GFE as it should have been and use that one with explanation of the rhyme and reasons behind it.

Just a suggestion...no matter what you do, it's going to be 'wrong' in one aspect or another. Since you would be lowering fees, perhaps this would be a better solution in the long run?
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