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#1643739 - 12/28/11 04:24 PM Is this a Changed Circumstance?
Couples Offline
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The Igloo
Will we ever get this Reg straight in our heads? It still gives me nightmares. Anyway........

We redisclosed and sent out a new GFE after we determined our customer had paid for an appraisal that was prepared for another financial institution and it was an appraisal our Bank was willing to accept.

The cost for the appraisal for the other institution was higher than our cost disclosed on the GFE. As a result, we redisclosed using the higher amount of the cost of the appraisal. The changed circumstance, according to the underwriter, was that we found out there was an appraisal that we may be willing to accept.

Any thoughts on this? I am not sure if that is a changed circumstance.

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RESPA
#1643750 - 12/28/11 04:32 PM Re: Is this a Changed Circumstance? Couples
Truffle Royale Offline

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My gut reaction was that this was not a changed circumstance.

But upon further consideration, if THE BORROWER REQUESTED that you accept the appraisal they had already paid for it would be ok. Borrower requests are valid changed circumstances.

But I'd ask that underwriter to run things by me before redisclosing on future loans.

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#1643761 - 12/28/11 04:37 PM Re: Is this a Changed Circumstance? Couples
Couples Offline
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The Igloo
Agreed. Questionable but I am tending to think it could lean toward a changed circumstance.

Thanks for your help!!!!

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#1644399 - 12/29/11 08:51 PM Re: Is this a Changed Circumstance? Couples
RaesPlace Offline
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Do you really think a change is necessary at all? I haven't had this happen, but my initial reaction would be to leave our fee as is and then not charge for it on the HUD. The amount they paid to another financial institution would not really be an item paid in connection with our loan, would it?

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#1644421 - 12/29/11 08:54 PM Re: Is this a Changed Circumstance? Couples
Truffle Royale Offline

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I see your point. I read too fast and didn't get that the appraisal was already paid for. You could have left well enough alone and then treated it as you would any other service that was not used by leaving it off the comparison chart.

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#1644812 - 12/30/11 05:06 PM Re: Is this a Changed Circumstance? Couples
Couples Offline
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The Igloo
That is a good point. I keep forgetting that it would not show up on the comparison chart. That throws me everytime. We have so few loans where that is a factor.

Thanks for everybody's help.

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#1654976 - 01/24/12 04:27 PM Re: Is this a Changed Circumstance? Couples
Libby M. Offline
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Mississippi, USA
If we ordered title work from an attorney and quoted fees on the GFE of $575 but that attorney then tells us that he can't complete the title work so we order from another attorney who charges $750, is that a changed circumstance and if so how to document?
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#1654992 - 01/24/12 04:57 PM Re: Is this a Changed Circumstance? Couples
RulesFollower Offline
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Why can't the attorney complete the title work? Was he on your service provider list? I can only compare this to our use of title companies and we disclose worst case fees regardless of which title company is chosen. In our office this would not be a changed circumstance UNLESS the reason had something to do with currative work, etc.

Are the bulldogs you love MSU Dawgs??

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#1655549 - 01/25/12 03:07 PM Re: Is this a Changed Circumstance? Couples
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
Appraisal:

Did you obtain the appraisal from the other financial institution or did you accept the copy that was given to the borrower? If you did not get the appraisal from the financial institution then you have a violation of the appraisal requirements.


Title Company:

It appears you chose the title company. You are stuck with the original fees shown on the GFE. The fact your first chosen provided cannot perform the work for you is not a changed circumstance regardless of the reason why they can't. When you choose the provider you are always subject to the tolerance of the fees disclosed regardless which provider you end up choosing.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#1655889 - 01/25/12 07:24 PM Re: Is this a Changed Circumstance? Couples
KTMiteComply Offline
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only if I want to....
I have something as well today. The appraisal came in too low and according to the LO we are going to have to take 1/2% hit on the back end. So the Investor is telling them that when they disclose the new loan amount that they can add a Discount Point in order to make up the 1/2% hit? I didn't think we could "add" a discount point after the fact? He said the Investor told him that in order for the customer to keep the rate that they would have to pay the discount points... please help set me straight on this crazy

thanks a bunch
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#1656003 - 01/25/12 08:40 PM Re: Is this a Changed Circumstance? Couples
Truffle Royale Offline

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The investor is correct.
In order to keep the rate he wants, it's now going to cost the borrower.
You check off the 'you pay a charge of $___' box in Block 2 and add it the total in A.
But you have to do this within three days of the CC.

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#1656046 - 01/25/12 09:02 PM Re: Is this a Changed Circumstance? Couples
KTMiteComply Offline
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KTMiteComply
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only if I want to....
Even if the loan is locked until 02/03?

So it's like the value of the house came back lower, so this "charge" can now be added to the GFE so the LO can make up what he is loosing on the backend? I thought the only thing that could change would be the items that the change affected? Like I know block 1 would decrease b/c the loan amount will be less and transfer tax or title may change. But I guess block 2 coincides with block 1??? Maybe this is where I'm getting confused b/c we normally don't use #2 charge (points)

Thanks truff....just needed to talk it out! smile
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Trust in the Lord with ALL your heart...Prov 3:5-6

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#1656055 - 01/25/12 09:11 PM Re: Is this a Changed Circumstance? Couples
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
The lower appraisal is affecting the pricing based on the LTV being higher than anticipated therefore the pricing - rate and/or points - are affected by the changed circumstance therefore you have a valid reason to revise the fees.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#1656529 - 01/26/12 06:20 PM Re: Is this a Changed Circumstance? Dan Persfull
WHEDA Offline
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WHEDA
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Wisconsin
I understand where Dan & Truff are coming from IF the loan amount remains unchanged - there would be an increase in LTV which could bump the transaction from 90% to 95%, or 95 to 97. However, KT mentioned a "new" loan amount so if one assumes the loan amount is reduced to maintain the original LTV level, why would the investor charge an additional 50 basis points?

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#1656592 - 01/26/12 07:13 PM Re: Is this a Changed Circumstance? Couples
Truffle Royale Offline

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risk based pricing?

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#1656644 - 01/26/12 07:52 PM Re: Is this a Changed Circumstance? Couples
WHEDA Offline
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WHEDA
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Wisconsin
Possibly. But isn't that typically based on LTV, credit score or something other than purchase price, or the fact that an appraisal came in lower than the original contract price?

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