Thread Options
#1810171 - 05/02/13 02:30 PM Providing GFE and TIL when not required
BFaith75 Offline
100 Club
Joined: Dec 2012
Posts: 105
Our instititution is making some programmatic changes, and has found that these changes will be easier to implement and sustain if we provide the GFE and TIL on HELOCs even though those disclosures are not required on HELOCs.I realize we will be bound by these disclosures if we decide to provide them. However, I am looking for input from others on the following questions. Are there other potential negative consequences of this practice? Is there anyone else out there who regularly provides these disclosures on HELOCs? I would really appreciate any input!

Return to Top
Lending Compliance
#1810190 - 05/02/13 03:06 PM Re: Providing GFE and TIL when not required BFaith75
KPOC Offline
Gold Star
KPOC
Joined: Jul 2012
Posts: 460
Greater Boston Area
My only advice is to just not do it. Why would it be easier?

Return to Top
#1810192 - 05/02/13 03:08 PM Re: Providing GFE and TIL when not required BFaith75
Combustible Offline
Diamond Poster
Joined: Dec 2008
Posts: 1,268
We were criticized by our regulators for providing RESPA disclosures on loans that were not applicable to RESPA (FRB)

I've always wondered if other institutions have been criticized for this also?

Return to Top
#1810195 - 05/02/13 03:10 PM Re: Providing GFE and TIL when not required BFaith75
Kathleen O. Blanchard Offline

10K Club
Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,277
How would you deal with HELOC APR if you use same programming as other products? HELOCs have their own rules.

I would not recommend this approach.
_________________________
Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

Return to Top
#1810238 - 05/02/13 03:59 PM Re: Providing GFE and TIL when not required BFaith75
BFaith75 Offline
100 Club
Joined: Dec 2012
Posts: 105
Thanks for your responses. Amicomply, what was your feedback from the regulators? Did they explain why it was an issue?

Return to Top
#1810288 - 05/02/13 05:02 PM Re: Providing GFE and TIL when not required BFaith75
Rocky P Offline
Power Poster
Joined: Jun 2003
Posts: 7,402
Florida
The problem with giving any disclosure that is NOT required is that at a minimum:
1 - you may be giving the customer protection that is not required or given by the regulation
2 - if the disclosure is incorrect, the bank could be cited even if it is not required.
_________________________
Integrity. With it, nothing else matters. Without it, nothing else matters.

Return to Top
#1810300 - 05/02/13 05:27 PM Re: Providing GFE and TIL when not required BFaith75
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 46,768
Bloomington, IN
1 - you may be giving the customer protection that is not required or given by the regulation
2 - if the disclosure is incorrect, the bank could be cited even if it is not required.


#1 I agree with.

#2 I disagree with. You can't be cited for a violaiton where none exists.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

Return to Top
#1810335 - 05/02/13 05:52 PM Re: Providing GFE and TIL when not required BFaith75
RR Joker Offline
10K Club
RR Joker
Joined: Nov 2002
Posts: 20,654
The Swamp
I think the biggest problem with this scenario is the way you disclose an APY on HELOC vs closed-end credit.

As far as the GFE/HUD goes...that's optional for HELOC's. It's awfully cumbersome,however, IMHO.
_________________________
My opinion only. Not legal advice.

Say you'll haunt me - Stone Sour

Return to Top
#1810374 - 05/02/13 06:23 PM Re: Providing GFE and TIL when not required BFaith75
Combustible Offline
Diamond Poster
Joined: Dec 2008
Posts: 1,268
The regulators looked at it as if we were just trying to cover everything without proper knowledge of what should be covered and what shouldn't. Basically they said, if it's not a RESPA loan, don't give RESPA disclosures. I believe the bank thought it was better to overdisclose than underdisclose, and it backfired.

Return to Top
#1810419 - 05/02/13 07:13 PM Re: Providing GFE and TIL when not required Dan Persfull
Rocky P Offline
Power Poster
Joined: Jun 2003
Posts: 7,402
Florida
Originally Posted By: Dan Persfull
[i]#2 I disagree with. You can't be cited for a violaiton where none exists.

Wish that were the case.
OCC Miami Field Office - bank had citation for 2 loans with incorrect dates on Right to Cancel forms for business purpose loans. Bank argued that document was unnecessary, OCC countered that if they were issued they needed to be correct. Management acquiesced - only (im)material exception on report.
_________________________
Integrity. With it, nothing else matters. Without it, nothing else matters.

Return to Top
#1810477 - 05/02/13 08:12 PM Re: Providing GFE and TIL when not required BFaith75
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 46,768
Bloomington, IN
Wish that were the case.
OCC Miami Field Office - bank had citation for 2 loans with incorrect dates on Right to Cancel forms for business purpose loans. Bank argued that document was unnecessary, OCC countered that if they were issued they needed to be correct. Management acquiesced - only (im)material exception on report.


Business purpose loans are not subject to 1026.15 or .23.

If I give them an incorrect rescission I have no violation of Reg. Z. I may have an unintentional contractual error due to the wording of the document but I do not have a regulatory violation.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

Return to Top
#1810485 - 05/02/13 08:25 PM Re: Providing GFE and TIL when not required BFaith75
rlcarey Online
10K Club
rlcarey
Joined: Jul 2001
Posts: 79,335
Galveston, TX
To finish Dan's sentence above:

....regulatory violation....regardless of what the feeling might be in some field office.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top

Moderator:  Andy_Z