I searched but couldn’t 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 won’t 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 HUD’s 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”.

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.

Thanks Truffle.

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.

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.