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#1894855 - 02/07/14 04:28 PM Old RESPA steps....
4newt Offline
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I know, I know: out with the old, in with the new. But I have a question.

Although the old 3500.2(b) reads ".....and any other information deemed necessary by the loan originator" as part of the items needed to be a complete application, a training I attended stressed that this could NOT include verification documentation. The new ATR rules very clearly include verification. As you would want to know their ability to repay prior to approving a request for credit and giving early disclosures, determining ATR does include verification. Am I correct that this is a case of "out with the old, in with the new" for a complete application?

Or do we need to go ahead and give a GFE even if the timing doesn't allow for ATR verifications, knowing that providing a GFE does not necessarily mean you have to make the loan.
Last edited by jnewt; 02/07/14 04:30 PM.
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Ability to Repay/Qualified Mortgage Rule
#1894869 - 02/07/14 04:39 PM Re: Old RESPA steps.... 4newt
RR Joker Offline
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I would not cross that line. Reg Z ATR and Reg X disclosure definitions should not be confused with each other. And at any rate...approving a request has nothing to do with disclosing that request.

Your last sentence is correct.
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#1894870 - 02/07/14 04:39 PM Re: Old RESPA steps.... 4newt
dblack Offline
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Originally Posted By: jnewt

Or do we need to go ahead and give a GFE even if the timing doesn't allow for ATR verifications, knowing that providing a GFE does not necessarily mean you have to make the loan.


Bingo.

1024.7(a)(5) says you cant require verification as a condition of providing the GFE.

The purpose of the earlies is so the customer can shop and compare. They will be less inclined to do that if they have to go through all of the verification steps before they get the GFE.


ETA:

Dang you Joker, beat by 14 seconds smile
Last edited by dblack; 02/07/14 04:40 PM.
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#1894873 - 02/07/14 04:42 PM Re: Old RESPA steps.... 4newt
RR Joker Offline
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and current 1024.2 still reads

Application means the submission of a borrower's financial information in anticipation of a credit decision relating to a federally related mortgage loan, which shall include the borrower's name, the borrower's monthly income, the borrower's social security number to obtain a credit report, the property address, an estimate of the value of the property, the mortgage loan amount sought, and any other information deemed necessary by the loan originator. An application may either be in writing or electronically submitted, including a written record of an oral application.

5) The lender may at any time collect from the loan applicant any information that it requires in addition to the required application information. However, the lender is not permitted to require, as a condition for providing a GFE, that an applicant submit supplemental documentation to verify the information provided on the application.
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#1894876 - 02/07/14 04:42 PM Re: Old RESPA steps.... 4newt
4newt Offline
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East Texas
Ok, thanks for the quick replies!

That is what I was thinking after going around the long way. It seems to be easy to forget that GFE does not mean commitment.
Last edited by jnewt; 02/07/14 05:13 PM.
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#1894878 - 02/07/14 04:43 PM Re: Old RESPA steps.... RR Joker
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smile
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