Thread Options 
|
#2019652 - 06/10/15 08:39 PM
Closing Costs Expire
|
Power Poster
Joined: Oct 2000
Posts: 5,991
Soaring over Georgia
|
On p.1 of the LE in the Rate Lock section, we are required to put a date on which all other estimated closing costs expire. This is required by 1026.37(a)(13)(ii). Reg Z also says in section 1026.19(e)(3)(iv)(E) that if the borrower does not give intent to proceed within 10 business days after the LE is provided to the borrower, a revised LE may be issued. Does this mean the date that needs to go in the rate lock section for expiration of all other closing costs is the date that is 10 business days after the LE is provided? Or are these two sections not related at all? If not related, how is the date that goes in the rate lock section for closing costs expiration determined?
_________________________
Jim Bedsole, CRCM, CBA, CFSA, CAFP
My posts - my opinions
|
|
Return to Top
|
|
|
|
|
#2019708 - 06/10/15 10:21 PM
Re: Closing Costs Expire
RVFlyboy
|
Member
Joined: May 2014
Posts: 61
|
It seems to be the case that those two provisions are related, although their relation seems buried in the section by section analysis. It could be clearer, but hunch is that it is ten days.
"With respect to the suggested confusion over proposed comment 37(a)(13)-2's reference to an expiration date [i.e., that it does not specify a specific expiration date], the Bureau notes that § 1026.37(a)(13) states that the disclosure must state the date and time at which the “estimated closing costs†expire. The Bureau also notes that § 1026.19(e)(3)(iv)(E) provides the closing costs disclosed on the Loan Estimate are not subject to the limitations on increases under § 1026.19(e)(3), if the consumer does not express an intent to proceed within 10 business days after the disclosures are provided. The Bureau believes the statement as proposed provides consumers with enough information regarding the possibility that the estimated closing costs may not be available. Accordingly, the Bureau believes that the comment does not require revision to clarify that it refers to the expiration of the closing costs under § 1026.19(e)(3)(iv)(E). " 78 FR 79919.
|
|
Return to Top
|
|
|
|
|
#2019733 - 06/11/15 12:27 PM
Re: Closing Costs Expire
RVFlyboy
|
Power Poster
Joined: Oct 2000
Posts: 5,991
Soaring over Georgia
|
Thanks, that's what I thought, but glad to have the confirmation of my knowledgeable peers. Follow up question.
We have given the LE without a rate lock. We put the date in that is 10 business days after the LE is delivered for expiration of the closing cost estimates. The borrower gives intent to proceed. As we move through underwriting, we have a change in circumstances and need to issue a new LE. Rate is still not locked (we don't have a formal rate lock program in place in the bank). Now what date do we put for expiration of the closing cost estimates?
Last edited by BeechFlyboy; 06/11/15 12:30 PM.
_________________________
Jim Bedsole, CRCM, CBA, CFSA, CAFP
My posts - my opinions
|
|
Return to Top
|
|
|
|
|
#2019767 - 06/11/15 01:49 PM
Re: Closing Costs Expire
RVFlyboy
|
10K Club
Joined: Oct 2000
Posts: 40,086
Cape Cod
|
The estimates aren't subject to cancellation or expiration once the consumer has given an intent to proceed.
_________________________
John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8
|
|
Return to Top
|
|
|
|
|
#2019768 - 06/11/15 01:50 PM
Re: Closing Costs Expire
RVFlyboy
|
10K Club
Joined: Oct 2000
Posts: 40,086
Cape Cod
|
correction.. They can be cancelled if the consumer withdraws the application or the lender denies the loan.
_________________________
John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8
|
|
Return to Top
|
|
|
|
|
#2019769 - 06/11/15 01:50 PM
Re: Closing Costs Expire
RVFlyboy
|
Power Poster
Joined: Oct 2000
Posts: 5,991
Soaring over Georgia
|
So on the revised LE, do you leave that field blank, put N/A, or something else altogether?
_________________________
Jim Bedsole, CRCM, CBA, CFSA, CAFP
My posts - my opinions
|
|
Return to Top
|
|
|
|
|
#2019873 - 06/11/15 04:32 PM
Re: Closing Costs Expire
RVFlyboy
|
Power Poster
Joined: Oct 2000
Posts: 5,991
Soaring over Georgia
|
Monica, I don't think that would be accurate, at least based on what John Burnett said. After intent is given there is no expiration of the cost estimates, so putting the original expiration date would be misleading, wouldn't it?
_________________________
Jim Bedsole, CRCM, CBA, CFSA, CAFP
My posts - my opinions
|
|
Return to Top
|
|
|
|
|
#2020108 - 06/12/15 03:47 PM
Re: Closing Costs Expire
RVFlyboy
|
Power Poster
Joined: Oct 2000
Posts: 5,991
Soaring over Georgia
|
Here's the text of an email I just sent to CFPB: On p. 1 of the Loan Estimate required under Section 1026.19(e)(1) and in accordance with 1026.37(a)(13)(ii), we must provide the consumer with the date the estimated closing costs will expire. Our understanding from the regulation, commentary, and final rule discussion is that the date disclosed here is the date 10 business days after the Loan Estimate is provided where beyond that date we would no longer be bound by the estimates provided under the provisions of 1026.19(e)(3)(iv)(E) if the consumer has not indicated by that date intent to proceed with the transaction. Once we have issued the loan estimate and the consumer has indicated intent to proceed, we would generally be bound by those disclosures (subject to specific variances) through the closing the transaction.
Assume we have issued a Loan Estimate to a consumer on 8/3/2015 and have indicated that the other estimated closing costs expire on 8/14/2015 at 5:00pm EDT. On 8/12/2015, the consumer indicates intent to proceed. On 8/19/2015 a valid change in circumstances occurs requiring a new Loan Estimate be issued within 3 business days after the change in circumstance. On the new Loan Estimate, what date do we put in this field for the date the other estimated closing costs expire? At this stage, the estimated closing costs no longer expire, so any date put here would seem to be misleading. The regulation and commentary do not seem to allow for this language to be dropped on the new Loan Estimate. Should we put “N/A� Should we put the date from the original LE (which would seem to really be misleading, since that date is now in the past)?
We appreciate any guidance you can provide on this.
I'll keep everyone posted on what I hear (if anything).
_________________________
Jim Bedsole, CRCM, CBA, CFSA, CAFP
My posts - my opinions
|
|
Return to Top
|
|
|
|
|
#2020123 - 06/12/15 04:11 PM
Re: Closing Costs Expire
RVFlyboy
|
10K Club
Joined: Oct 2000
Posts: 40,086
Cape Cod
|
Apparently the Bureau focuses only on the 10-[general] business-day period counted from the delivery of the initial Loan Estimate following which (if the consumer has failed to express an intent to proceed) the LE is deemed to have expired (unless the disclosure of the expiration date on the initial LE reflected a later expiration date). It doesn't address at all what new expiration date to include on a revised LE, whether the revision is issued to establish new estimates once the first LE has expired, or for other changed circumstances. There's no suggestion anywhere that a revised LE issued for whatever reason triggers a new 10-business-day "LE life." That's all I can come up with after scouring the Federal Register document, the regulation and the commentary.
So my recommendation would be to leave the same date you used for the first LE, even if it's a past date.
_________________________
John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8
|
|
Return to Top
|
|
|
|
|
#2026966 - 07/14/15 02:18 PM
Re: Closing Costs Expire
RVFlyboy
|
Power Poster
Joined: Oct 2000
Posts: 5,991
Soaring over Georgia
|
So here's what I heard from an attorney with CFPB in response to my inquiry. It was very vague and she admitted to being new at CFPB. It sounded like they really didn't have a good answer and she gave conflicting information. At one point she said to use the prior date. Then at another point she said you would put a new date of 10 business days from the LE re-issue date. When I challenged her on that, she said we could request that the customer provide a new intent to proceed. When I asked for clarification to be sure that a new intent to proceed was not required, she said she would have to research that some more. Then when I said I thought putting the prior date, even if it was in the past, would be more easily explainable to the customer than putting some arbitrary future date that really had no impact on anything, she said that sounded right to her.
Bottom line, there is no official guidance on this from CFPB. Absent that, I'm going with John and Kaybee and going with the prior date, even if it is in the past.
_________________________
Jim Bedsole, CRCM, CBA, CFSA, CAFP
My posts - my opinions
|
|
Return to Top
|
|
|
|
|
#2026977 - 07/14/15 02:48 PM
Re: Closing Costs Expire
RVFlyboy
|
10K Club
Joined: Oct 2000
Posts: 40,086
Cape Cod
|
Don't you wish that, if they already have the question, they'd put someone on it who has a definitive answer? And if they are getting the question cold, they'd simply admit they don't have the answer and need to research it further? (And then get back to you with what they learned, of course.)
_________________________
John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8
|
|
Return to Top
|
|
|
|
|
#2033384 - 08/12/15 08:24 PM
Re: Closing Costs Expire
RVFlyboy
|
Gold Star
Joined: Feb 2007
Posts: 289
|
Any updates on this one? Here's what appears to be programmed in our LOS -- the expiration date moves out 10 business days every time the LE is issued/reissued unless we have indicated that the borrower has indicated an intent to proceed, in which case the last expiration date remains fixed. I do not understand why the expiration date would move when a revised LE is issued. Also -- is everyone following up to get new "intent to proceed" each time an LE is reissued?
|
|
Return to Top
|
|
|
|
|
#2033411 - 08/12/15 09:09 PM
Re: Closing Costs Expire
RVFlyboy
|
10K Club
Joined: Oct 2000
Posts: 40,086
Cape Cod
|
You don't need to provide a revised LE just because the borrower hasn't given you an intent to proceed within the 10-day window. You have a right to issue a revised LE within three days of receiving the intent to proceed if the intent is received more than ten days after the provision of the first LE. Once the intent to proceed is received (and you've issued a revised LE in the case of a late intent to proceed) you are wed to the estimates in the LE unless some other form of changed circumstance comes up.
_________________________
John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8
|
|
Return to Top
|
|
|
|
|
#2033436 - 08/13/15 12:53 PM
Re: Closing Costs Expire
RVFlyboy
|
Gold Star
Joined: Feb 2007
Posts: 289
|
I'm sorry, I wasn't clear. My question relates to the expiration date on the LE when the LE is reissued due to a change in circumstance. Our LOS has programmed the expiration date on the LE to move out 10 business days each time an LE is issued. They fix the date once we indicate the borrower has expressed an intent to proceed, so that any LE issued after the intent to proceed has been marked has the expiration date of the last issued LE. Why doesn't the expiration date stay fixed? Shouldn't it remain 10 business days from the original LE? Has anyone received clear guidance from the CFPB?
|
|
Return to Top
|
|
|
|
|
#2039156 - 09/17/15 06:41 PM
Re: Closing Costs Expire
time flies when you're having fun
|
Platinum Poster
Joined: Mar 2006
Posts: 738
|
Currently on we list,in the Important Dates section of the GFE #1 and #2, 30 days out from the date the GFE. Now switching over to the Loan Estimate are we only going to have to concern ourselves with the 10 days or can we keep the estimates for the 30 days?
|
|
Return to Top
|
|
|
|
|
#2039204 - 09/17/15 08:17 PM
Re: Closing Costs Expire
RVFlyboy
|
10K Club
Joined: Oct 2000
Posts: 40,086
Cape Cod
|
If the bank wants to continue shooting itself in the foot, I don't think the regulation will prevent it. If you use a 30-day period on the Loan Estimate, you are effectively changing the changed circumstance revised estimate rule for receipt of an intent to proceed more than 10 days from the delivery of the loan estimate to more than 30 days after loan estimate delivery. You always have the option of sticking with your estimates longer than 10 days, but why would you want to?
_________________________
John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8
|
|
Return to Top
|
|
|
|
|
#2039232 - 09/17/15 09:01 PM
Re: Closing Costs Expire
John Burnett
|
Platinum Poster
Joined: Jun 2001
Posts: 644
|
Apparently the Bureau focuses only on the 10-[general] business-day period counted from the delivery of the initial Loan Estimate following which (if the consumer has failed to express an intent to proceed) the LE is deemed to have expired (unless the disclosure of the expiration date on the initial LE reflected a later expiration date). I just want to verify that when you say "general" business day, you are referring to the definition that does not include Saturday if the bank is closed ... rather than the "specific" definition that does include Saturday. Thank you for your help!!!!
|
|
Return to Top
|
|
|
|
|
#2039306 - 09/18/15 01:34 PM
Re: Closing Costs Expire
RVFlyboy
|
10K Club
Joined: Oct 2000
Posts: 40,086
Cape Cod
|
That is what my use of the word "general" was meant to convey, yes.
_________________________
John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8
|
|
Return to Top
|
|
|
|
|
#2039579 - 09/19/15 12:50 PM
Re: Closing Costs Expire
John Burnett
|
New Poster
Joined: Sep 2015
Posts: 3
|
I just want to make sure I'm getting this right. I understand that we have a right to issue a revised LE within three days of receiving the intent to proceed if the intent is received more than ten days after the expiration of the first LE. If no fees have changed, it is my understanding that we would not issue another LE. We would only issue a revised LE (within 3 days of intent to proceed) if any of the fees from the initial LE changed. Is my understaning correct? Since we received an intent to proceed after the 10-day closing cost expiration, if we have to issue a revised LE, do we need another intent to proceed from the borrower and would we give an 10-day closing cost expiration date?
Last edited by KE 3113; 09/19/15 01:24 PM.
|
|
Return to Top
|
|
|
|
|
#2039634 - 09/21/15 03:34 PM
Re: Closing Costs Expire
RVFlyboy
|
10K Club
Joined: Oct 2000
Posts: 40,086
Cape Cod
|
You would only issue a revised LE under the "expired LE" provision if the intent to proceed is received more than 10 days from delivery of the LE and there have been changes to any of the fees disclosed on the original LE. The borrower's intent to proceed, however, remains effective and the prohibition on imposing fees on the borrower is lifted. No additional intent to proceed is needed.
If the lender issues a revised LE under the "expired LE" reason or for any other changed circumstance, the closing cost expiration date from the original LE continues to be disclosed.
_________________________
John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8
|
|
Return to Top
|
|
|
|
|
|
Previous Thread
Index