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#1824953 - 06/19/13 02:25 PM Low Appraisal & timing of revised GFE??
Rdy2Retire Offline
100 Club
Joined: Dec 2004
Posts: 117
GA Mountains
I searched but couldnt find a post that covered this specific question being asked by my secondary market originators.

We get an appraisal that is low and the original deal wont work. We give the borrower several options on what they can do to still make the deal work. Pay loan down, do a HARP refi., subordinate the 2nd etc. It sometimes takes a week or more for them to decide what they want to do. When does our 3 day window start to issue the revised GFE? At the time we get the appraisal or when the borrower tells us how they want to proceed?

On Page 17 (Q3) of HUDs FAQ it states: When there is a changed circumstance, and the loan originator intends to issue a revised GFE, the loan originator must do so within 3 business days of receiving the information "sufficient" to establish changed circumstances. A loan originator may issue a revised GFE reflecting only the increased charges resulting from the changed circumstance.

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#1824960 - 06/19/13 02:38 PM Re: Low Appraisal & timing of revised GFE?? Rdy2Retire
Truffle Royale Offline

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Posts: 17,344
Three day clock starts ticking when you get the appraisal.

Not sure what kind of costs you would need to redisclose to capture tho.

If there are fees associated with each of the options and the borrower doesn't respond by end of day 2, I'd redisclose for the worst case scenario.

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#1824989 - 06/19/13 03:05 PM Re: Low Appraisal & timing of revised GFE?? Rdy2Retire
Rdy2Retire Offline
100 Club
Joined: Dec 2004
Posts: 117
GA Mountains
Thanks Truffle.

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#1825087 - 06/19/13 04:21 PM Re: Low Appraisal & timing of revised GFE?? Rdy2Retire
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 79,293
Galveston, TX
Three day clock starts ticking when you get the appraisal.

I disagree. When the appraisal came in too low, you have a denied loan application. If you want to counter-offer the customer another product, lower loan amount, large down payment, etc., you will not be "receiving the information "sufficient" to establish changed circumstances" until the customer indicates that they would like to proceed with one of the options. If they indicate which one, then you issue the GFE. If they give you no indication, you issue the AAN.

Otherwise, I guess you could just give them a multitude of GFEs for every other possible counter-offer they could accept.
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#1825229 - 06/19/13 07:18 PM Re: Low Appraisal & timing of revised GFE?? Rdy2Retire
Truffle Royale Offline

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Joined: Jul 2003
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Wonder if I could get my examiner to go with that line of logic, Randy? Maybe I'll ask it as a hypothetical when they land here in the imminent future.

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