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#2065178 - 02/20/16 02:49 PM Revised LE ONLY if 10% tolerance is exceeded
Caroline Compliance Offline
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Posts: 127
[u]Am I reading this right? That we can ONLY issues a revised Loan Estimate if/when our related settlement charges increase more than a 10% tolerance if the customer requests a change to terms? Let's say that is a loan amount request... changes from $90,000 up to $95,000. If our 'fees' didn't change by more than a 10% tolerance, we CAN"T reissue a revised LE???

I have staff that believe we must reissue a LE for a simple loan amount change... even when absolutely no fees changed. None.

Is this therefore saying that if the fees don't change by more than the 10% allowance, we CAN"T issue a revised LE!!

Man, that would be great to show them that!!!

May a creditor use a revised Loan Estimate if the consumer requests revisions to the terms or charges? (§ 1026.19(e)(3)(iv)(C))
Yes. A creditor may use a revised estimate of a charge if the consumer requests revisions to the credit terms or settlement that affect items disclosed on the Loan Estimate and cause an estimated charge to increase. (§ 1026.19(e)(3)(iv)(C); Comment 19(e)(3)(iv)(C)-1)

Remember, providing a revised Loan Estimate allows creditors to compare the updated figures for charges that have increased due to an event that allows for redisclosure to the amount actually charged for those services. [b]If amounts decrease or increase only to an extent that does not exceed the applicable tolerance, the original Loan Estimate is still deemed to be in good faith and redisclosure is not permitted. (§ 1026.19(e)(4)(i))

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#2065190 - 02/21/16 01:26 PM Re: Revised LE ONLY if 10% tolerance is exceeded Caroline Compliance
rlcarey Online
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rlcarey
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Galveston, TX
I am not sure where that last sentence came from, but it is not technically correct.

1. You can re-issue if a changed circumstance causes your 0% tolerance fees to increase or your 10% tolerance fees to increase by more than 10%.

2. You can re-issue if the customer requests a change that causes fees to increase.

3. You must re-issue if there is a rate lock entered into by the bank and the applicant.

4. You can re-issue if the original LE expired.

5. You can re-issue the LE for the permanent loan on a two phase construction/perm loan 60 days prior to the permanent loan closing.

This does not mean you cannot re-issue under other circumstances, however it does nothing as far as resetting your tolerances and those comparison would be made to the original LE or the latest LE issued under one of the five conditions.

Bottom-line is, every time you issue an LE is one more opportunity to make mistakes and most banks choose not to re-issue unless it is required to do so.
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#2065206 - 02/22/16 02:29 PM Re: Revised LE ONLY if 10% tolerance is exceeded Caroline Compliance
swiggles Offline
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swiggles
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Randy....that is the best synopsis I have seen. You should be published. LOL
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#2065280 - 02/22/16 05:15 PM Re: Revised LE ONLY if 10% tolerance is exceeded Caroline Compliance
John Burnett Offline
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John Burnett
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Cape Cod
The only change I would suggest is in item 1:

1. You can re-issue if a changed circumstance causes your individual 0% tolerance fees to increase or your 10% tolerance fees as a group to increase by more than 10%.
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#2065841 - 02/24/16 08:02 PM Re: Revised LE ONLY if 10% tolerance is exceeded Caroline Compliance
Caroline Compliance Offline
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Joined: May 2015
Posts: 127
Turns out I was looking at a 2014 of the CFPS Small Lender guide. The most recent one changed 8.6 slightly. Apparently not everything on the interweb is true!! smile

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#2065842 - 02/24/16 08:04 PM Re: Revised LE ONLY if 10% tolerance is exceeded Caroline Compliance
Caroline Compliance Offline
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Posts: 127
And my point, why re-issue if you don't need to and nothing changed. A reduction in the loan amount which changed nothing else would be just wasted paper, and potential examiner ammunition. Sometimes less is more. Some would say, "well, the reduced loan amount changed the payment and shouldn't we disclosure that to the borrower". Sure... on the closing disclosure!!

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#2065844 - 02/24/16 08:08 PM Re: Revised LE ONLY if 10% tolerance is exceeded Caroline Compliance
Caroline Compliance Offline
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Joined: May 2015
Posts: 127
And I like the word choice of CAN. You "MAY" reissue. Only time MUST is for the rate lock. The other situations are optional, if the lender is trying to capture an increase in fees. Too often I think people think 'Change of Circumstance" goes hand-in-hand with REQUIRING a reissue.

A change of fees requires a valid change of circumstance and an allows for an optional reissue.
But a change of circumstance in and of itself does not require a reissue.

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#2065850 - 02/24/16 08:36 PM Re: Revised LE ONLY if 10% tolerance is exceeded Caroline Compliance
John Burnett Offline
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John Burnett
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Cape Cod
Quote:
The other situations are optional, if the lender is trying to capture an increase in fees.


Actually, the other situations are optional, unless the lender is trying to capture an increase in fees, in which case, it's required.
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#2065938 - 02/25/16 02:55 AM Re: Revised LE ONLY if 10% tolerance is exceeded Caroline Compliance
Caroline Compliance Offline
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Joined: May 2015
Posts: 127
Exactly. Thanks John!

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#2066705 - 02/29/16 10:48 PM Re: Revised LE ONLY if 10% tolerance is exceeded Caroline Compliance
zums Offline
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Joined: Jan 2010
Posts: 65
I'm still confused on the required LE at time of rate lock. What if the interest rate being locked per a signed agreement is the same as the rate quoted on the original LE? No change to payment, fees, etc.... is it still required?

From what I have read it mentions only if changed, but having a hard time confirming that we are ok to not re-disclose the LE if the lock comes after initial and there is no change to the rate.

Help?

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#2066711 - 03/01/16 02:22 AM Re: Revised LE ONLY if 10% tolerance is exceeded Caroline Compliance
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 79,926
Galveston, TX
Your have to issue an new LE with the rate lock date disclosed even if there are no other changes.
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#2066807 - 03/01/16 04:32 PM Re: Revised LE ONLY if 10% tolerance is exceeded Caroline Compliance
John Burnett Offline
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John Burnett
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Cape Cod
Under 1026.19(e)(4)(i), IF you're going to use a revised LE to adjust the basis for a cost affected by one of the events in (e)(3)(iv)(A), (B), (C), (E) or (F), you have to send the revised LE within 3 business days of receiving information sufficient to establish the conditions under one of those paragraphs. Notice that the operative word at the start of that section is "IF." You don't have to send a revised LE if you elect not to adjust your basis for the affected costs.

Paragraph (e)(3)(iv)(D) -- the paragraph on rate locks -- is the only paragraph that includes its own requirement for the revised LE, and there is no optional language there. It's required. And the reason is the one that Randy gave -- even if there is no change in the costs, and even if the rate is locked at the same rate given on the initial LE, you have to update the disclosure to answer "YES" to the rate lock question, and provide the (updated) expiration date and time for the rate lock.
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#2066829 - 03/01/16 05:09 PM Re: Revised LE ONLY if 10% tolerance is exceeded Caroline Compliance
zums Offline
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Joined: Jan 2010
Posts: 65
Thanks guys, very much appreciated. Love this place!

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