Lender did not disclose LE within 3 days. Bank is going to absorb all fees. Bank issued LE late.

1. On the CD, the bank needs to disclose the fees, and mark them lender paid, correct?

2. On the CD, are only 3rd party fees shown, but not bank fees? (because the bank simply doesn't chg the fees)

I don't believe that not providing the LE within the 3 days causes all fees to become null and void for the customer. You definitely violated the timing rules, but it is not my understanding that this gives the customer a "free" deal.

I told mgmt. that they didn't have to pay, but they want to do it anyway. I just need to be sure how to do it. I have re-read the Thread discussions, but I'm not sure what the final answer is.

Did the loan close already, or is it coming up for closing? How is the issued LE setup?

It hasn't closed yet.

I would say to lay out the CD how you would normally lay it out and then put all charges in the column for "Paid by Others."

Thanks

Wow! That is amazing. Just make sure that EVERY customer who receives an LE late, also gets a free loan.

Ditto what swiggles said. You have now set a precedent that you will have to pay all fees on every customer that gets a late LE. Does management realize that?

I think that management wants to use that loan as a costly example for the lending staff, in the hope that there won't be any more late LEs. That may be naive of them.

Posting this here so that you know I have tried to read related threads.

My scenario is that we have a group of loans that are unsaleable for a non compliance reason. We are refinancing those loans at no cost to the borrower. Offering an improvement in rate (,125%) and paying all costs period. It doesn't seem to make sense to lock ourselves into a credit at the LE stage. Fees could change but we again will be paying all fees.

In your opinion do we need to disclose these fees and corresponding credit on the LE? We believe that we would put all fees on the CD, and "cure" the violations with a credit.

Thoughts/

My thoughts are is that everyone should have written a comment letter to the CFPB on the recent proposal and hammered them to clarify this and other issues.

My personal opinion is that if the consumer is not legally responsible for the payment of the costs, then they don't need to be listed and then offset by a credit. The discussion in the preamble to the final regulation has been misconstrued. The type of "no cost" loan that the CFPB was referring to in the preamble, was one in which the closing costs were rolled into the loan amount so that the borrower did not have a "cash to close" requirement. A significant departure from previous HUD guidance.

But there is no bright line answer. Call the CFPB and ask them.