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#2020148 - 06/12/15 05:04 PM Late Delivery of LE
Tesla Offline
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So, what besides a regulatory violation and possible finding of a pattern or practice, what happens if you fail to provide the LE timely? If you deliver it late, are just stuck with the fees disclosed? Is there any other impact?
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TRID - TILA/RESPA Integrated Disclosures Rule
#2020212 - 06/12/15 07:41 PM Re: Late Delivery of LE Tesla
Andy_Z Offline
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Well, in addition to a fine of up to $5,000 and a year in jail for willful violations, there are a myriad of other penalties and regulators can reach beyond Reg Z and call it UDAAP if they want. But I'd ask how many penalties should there be to do it right? It isn't as though we pick and choose any laws we opt to follow and not follow. If its a one-up violation probably little, if its a pattern or practice I think you'd have potentially severe consequences. At the least examiners dig into EVERYTHING else in great detail.
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#2020376 - 06/15/15 02:15 PM Re: Late Delivery of LE Tesla
Tesla Offline
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I understand that, Andy, and thanks for reminding me, but the question presented to me is what if we miss one, is it like a GFE error and we are stuck with the fees (which doesn't make sense). Anyway, other than the regulatory violations you have noted above, I don't think there is an impact to the transaction, which seems very odd, and I want to be sure I am no missing anything. Thanks!
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#2020389 - 06/15/15 02:37 PM Re: Late Delivery of LE Tesla
John Burnett Offline
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If I recall correctly, the same question was raised under the current GFE requirements, and one of the regulators was pushing for a "zero tolerance" if the GFE was issued late, which would essentially mean that the bank would have to absorb all the costs. Cooler heads suggested that a GFE that was a couple of days late might not be dealt with so harshly, and the discussion devolved into something like "when is the GFE too late to avoid a zero tolerance requirement?"

That question, I believe, has never been finally resolved.

I don't believe the Bureau raised the issue in its issuance of the TRID rules. It's certainly not in the regulation or commentary; I don't recall it being raised in the prefatory text in the Federal Register document. So at some point someone is going to get dinged by an examiner and the discussion of whether there is a "zero tolerance" that results from a failure to timely provide the Loan Estimate will surface. Whether the Bureau will weigh in, or it will be something that's decided by prudential regulators (with the attendant potential for non-uniform enforcement) or a court case is anyone's guess.
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#2020395 - 06/15/15 02:41 PM Re: Late Delivery of LE Tesla
Tesla Offline
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Thanks John. I truly couldn't believe I was being asked to research that question. I was asked in front of a whole group of people and gave the regulatory penalties and jail time speech, but they kept pushing because we have a possible situation where an application could come in on a Saturday and sit on someone's desk. My solution - TRAINING!. They don't think that is good enough.
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#2020399 - 06/15/15 02:45 PM Re: Late Delivery of LE Tesla
Kathleen O. Blanchard Offline

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The creditor (bank, credit union, mortgage lender) needs to have a very firm process to prevent applications being overlooked in the shuffle. Process and training are the answer to prevent problems.
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#2020400 - 06/15/15 02:50 PM Re: Late Delivery of LE Tesla
Tesla Offline
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True - thanks all!
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#2020431 - 06/15/15 03:55 PM Re: Late Delivery of LE Tesla
John Burnett Offline
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Part of your process will need to be making sure than any mailed-in or dropped-off applications for designated loan originators are handled if the "addressee" happens to be out of the office. That is going to take some coordination.

But you know, none of this is new. The same three-day requirement currently applies to the GFE. The only real difference (aside from what you call the disclosure form) is today's 7th criterion for an application under RESPA ("any other information deemed necessary by the loan originator"), which won't be available for applications received after 7/31/2015.
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#2022034 - 06/22/15 09:05 PM Re: Late Delivery of LE Tesla
John Burnett Offline
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In fact, there are a lot of aspects of the TRID rule that are carry-overs from RESPA. Why do you suppose there is such a hue and cry now over provisions that have been in place since 2010 -- other than the fact that the universe of loans to which they apply is much broader?
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#2022040 - 06/22/15 09:14 PM Re: Late Delivery of LE Tesla
Kathleen O. Blanchard Offline

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(Or now that people are reading the rules closely, finding out they were not complying and have a fear of the CFPB pushing them to comply?)
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#2114292 - 01/13/17 08:34 PM Re: Late Delivery of LE Tesla
Norman Paperman Offline
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Bringing this one back to life. Any opinions on the ramifications of a late LE delivery other than pushing out the closing date?

Any support for the zero tolerance rule? Our lending team had a rogue lender deliver the package very late and I need some help here.
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#2114330 - 01/16/17 02:31 PM Re: Late Delivery of LE Tesla
Compliance NABW Offline
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As mentioned above, the main ramification is the potential for regulatory penalties and other repercussions. Some lenders take the stance that they have to give the borrower a "free" loan in this situation, but the Reg. and guidance is not clear on the matter. You definitely have a timing violation, but there is no written language that I am aware of that requires a full tolerance cure for every fee in this situation.

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#2114355 - 01/17/17 02:48 PM Re: Late Delivery of LE Tesla
John Burnett Offline
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Rogue lenders are best handled with an emphatic version of "Our way or the highway." A single late LE may not cause significant repercussions, but a pattern or practice of late disclosures can wreak havoc with your compliance program's rating, in addition to adding to other risks.
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#2114371 - 01/17/17 05:18 PM Re: Late Delivery of LE Tesla
Norman Paperman Offline
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Thank you gentlemen.
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