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#1661051 - 02/06/12 05:45 PM HELOC application change before closing
Sewanee, CRCM Offline
Gold Star
Joined: Dec 2006
Posts: 435
I can argue in different directions on this, but haven't found anything definitive.

We have a HELOC application that was taken under a No Closing Costs plan; the application disclosure lists that there are no third-party fees.

However, the decision by a loan committee is that we are to split the loan fees with the customer. There is no origination fee and no prepaid interest, so there should not be a change to the APR.

If this was a closed-end homequity application, we might have a case of a changed circumstance (depending on the reason for our decision, which is a whole different issue), and we would be required to re-issue the GFE within 3 days of the changed circumstance, but with no waiting before closing. Would the same thing apply here? Just give the customer a new application disclosure showing the expected third-party fees, and go ahead and close?

Surely someone else has run into this.
Keep Calm and Carry On

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Lending Compliance
#1661063 - 02/06/12 06:01 PM Re: HELOC application change before closing Sewanee, CRCM
Truffle Royale Offline

10K Club
Joined: Jul 2003
Posts: 17,390
Just because you have a valid changed circumstances does NOT mean you are required to re-issue the GFE.

That said, I'm thinking you're going to have to do something to communicate the fact that you're not paying as promised now. I don't think how you do it is mandated by a Reg.

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