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#1810171 - 05/02/13 02:30 PM Providing GFE and TIL when not required
BFaith75 Offline
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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!

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#1810190 - 05/02/13 03:06 PM Re: Providing GFE and TIL when not required BFaith75
KPOC Offline
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My only advice is to just not do it. Why would it be easier?

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#1810192 - 05/02/13 03:08 PM Re: Providing GFE and TIL when not required BFaith75
Combustible Offline
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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?

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

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

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#1810288 - 05/02/13 05:02 PM Re: Providing GFE and TIL when not required BFaith75
Rocky P Offline
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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.
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#1810300 - 05/02/13 05:27 PM Re: Providing GFE and TIL when not required BFaith75
Dan Persfull Offline
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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.
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#1810335 - 05/02/13 05:52 PM Re: Providing GFE and TIL when not required BFaith75
RR Joker Offline
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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.
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#1810374 - 05/02/13 06:23 PM Re: Providing GFE and TIL when not required BFaith75
Combustible Offline
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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.

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#1810419 - 05/02/13 07:13 PM Re: Providing GFE and TIL when not required Dan Persfull
Rocky P Offline
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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.
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#1810477 - 05/02/13 08:12 PM Re: Providing GFE and TIL when not required BFaith75
Dan Persfull Offline
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Dan Persfull
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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.
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#1810485 - 05/02/13 08:25 PM Re: Providing GFE and TIL when not required BFaith75
rlcarey Online
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Galveston, TX
To finish Dan's sentence above:

....regulatory violation....regardless of what the feeling might be in some field office.
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