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#1817769 - 05/28/13 03:58 PM Error(s) on Loan Paperwork
Whodunnit? Offline
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Joined: Apr 2005
Posts: 75
What seems to be the appropriate response to a loan officer who marks corrections on loan paperwork and does not have the customer initial the changes? Corrections on HUD & on the note (in the Fed Box). I feel positive that the reg's won't address this - was wondering how others handle this type of situation? Preferably there would be no corrections marked on the closing paperwork, but if it is a must, I only think it right that the L/O has the customer initial the changes. eek (Changes aren't "minor" items, it's payment amounts, escrows, etc. )

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#1817775 - 05/28/13 04:34 PM Re: Error(s) on Loan Paperwork Whodunnit?
Andy_Z Offline
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If the terms are not acknowledged and approved by all parties, they're just changes that were indicated at some point and have no purpose other than to draw attention to the errors.

You've no idea when these changes were made and if the borrower hasn't agreed to them, what is booked, what will be repaid, why are they different and if the consumer's copy shows the changes.

You need to figure out what was disclosed and agreed to and when. Then get the documents corrected. Counsel may be the best step. Potentially the consumer will acknowledge the changes. That may depend on whose favor they're in.
Last edited by Andy Z; 05/28/13 04:34 PM.
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#1817804 - 05/28/13 05:53 PM Re: Error(s) on Loan Paperwork Whodunnit?
Truffle Royale Offline

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The part that Andy so delicately danced around is whether or not these uninitialed changes will hold up in a court of law.
These documents represent a contract between the bank and the borrower.
Indiscrimate changes that are not properly acknowledged by all parties could possibly be construed to go so far as to invalidate the contract.
We NEVER allow hand-written changes (or...gasp!...white-out) on closing docs.
The LO must call for a new set of closing docs to reflect the changes.

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#1817831 - 05/28/13 06:34 PM Re: Error(s) on Loan Paperwork Truffle Royale
swiggles Offline
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Especially with respect to the Truth In Lending Disclosure.....change one item and likely the entire disclosure won't jive.
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