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#2002035 - 03/17/15 03:57 PM Rate lock extension
gunches Offline
100 Club
Joined: Dec 2005
Posts: 210
We are the originator on a mortgage loan in which we had to extend the lock, Fannie Mae charged a fee to extend it and we are passing this on to the customer.
What line of the HUD does this fee get disclosed on?

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RESPA
#2002039 - 03/17/15 04:03 PM Re: Rate lock extension gunches
#Just Jay Offline
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#Just Jay
Joined: Oct 2006
Posts: 14,390
Cheeseheadland
My first question to you: why are you extending the lock?
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#2002040 - 03/17/15 04:05 PM Re: Rate lock extension gunches
gunches Offline
100 Club
Joined: Dec 2005
Posts: 210
We had to have a manufactured home inspection completed to be sure it was on permanent foundation, and it took longer than expected

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#2002041 - 03/17/15 04:05 PM Re: Rate lock extension gunches
Truffle Royale Offline

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Joined: Jul 2003
Posts: 17,292
You needed to have redisclosed the GFE to capture this fee if you wanted to pass it on to the borrower because it's a Block 1/zero tolerance fee. You should also have checked your ETIL to make sure adding the fee doesn't throw the APR out of tolerance by more than .125%

If you're now at closing, you have to show the fee on line 802 and cure for the entire amount.

You will have two non-cureable violations. One for not redisclosing the GFE as called for by RESPA. (an extension is considered a rate lock and must be redisclosed for) The other will be for not redisclosed the ETIL if the APR changed more than allowed.

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#2002043 - 03/17/15 04:11 PM Re: Rate lock extension gunches
#Just Jay Offline
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#Just Jay
Joined: Oct 2006
Posts: 14,390
Cheeseheadland
Along with what Truff stated, I would even go so far to opine that unless your borrower somehow caused they delay, or you or your chosen inspector is the cause for the delay, then this may not even be a cost you could have passed on along to your borrower.
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I don't repeat gossip, so listen closely...

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#2002637 - 03/19/15 03:51 PM Re: Rate lock extension gunches
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,464
Bloomington, IN
We had to have a manufactured home inspection completed to be sure it was on permanent foundation, and it took longer than expected.

Explain to us how that is the fault of the consumer. If you can't, then as JJ stated you shouldn't be passing any additional charges to the consumer.
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The opinions expressed are mine and they are not to be taken as legal advice.

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