I am pretty sure I know the answer to this but I just want to be certain. Have a loan that was disclosed on the GFE without an origination charge because the borrower wanted the rate that did not include an origination charge (consequently block 1 shows no charge). The particular bank in question doesn't lock rates in the traditional sense, but quotes a rate and honors it whenever the file closes. Customer came back later and now wants the lower rate he was offered that had an 1% origination charge per the rate sheet. The bank doesn't offer points, but I believe the only way to account for this would be in block 2 and not block 1 at all. The bank refuses to use block 2 because they "don't offer points". Obviously since the customer requested the change it's a valid change of circumstance, but is it viable to make this change in block 1 at all? I say no.

Why not? The customer is asking for different pricing. If that pricing impacts both the interest rate and interest rate defendant charges (i.e. the origination fee), then it is a change in circumstance. Reissue and move on.

Thanks rlcarey. I thought because we hadn't disclosed ANY origination charge that we couldn't update Block 1. I'm finding lots of different regulator guidance on block 1. Some says it can never change unless the loan amount causes a percent driven amount to increase. Very little I have read has pointed to allowing us to add an origination charge later in the process even if it resulted from a customer requested change.

The customer originally asked for a loan priced at PAR. They changed their mind and now want to apply for a loan at PAR - xx% and in order to receive the lower rate, an origination charge/point, whatever you want to call it is assessed. It is a different loan product.