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#2006866 - 04/08/15 07:12 PM Loan Estimate Delivery and Adverse Action Notice
awilli Offline
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On a consumer purpose, closed-end, residential RE loan, it's my understanding that if we decline it within 3 days of application, we are not required to send the Loan Estimate.

What are the notification requirements for the adverse action? Is the bank required to send the notification letter within the 3 days, or just communicate to the customer within 3 days (keeping the 30-day notificaiton requirement per Reg B)? Or, can the bank just document the denial withing their system, and then just make sure we send the notification letter within the 30-days?
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TRID - TILA/RESPA Integrated Disclosures Rule
#2006887 - 04/08/15 08:11 PM Re: Loan Estimate Delivery and Adverse Action Notice awilli
Jerod Moyer Offline
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Nothing changes under Reg B, treat the same way after 8/1 as you would today.
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#2006890 - 04/08/15 08:18 PM Re: Loan Estimate Delivery and Adverse Action Notice awilli
awilli Offline
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I understand that nothing changes under Reg B. But if a loan is declined within 3 days of application, the Loan Estimate is not required, correct? What (if any) adverse action notification requirements are there under TILA/RESPA in order to avoid the requirement of sending out the Loan Estimate?
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#2006894 - 04/08/15 08:30 PM Re: Loan Estimate Delivery and Adverse Action Notice awilli
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Preamble: The Bureau notes that the comment advocating for requiring creditors to provide application denial notices within the same three business days that are required for the Loan Estimate is outside the scope of the proposal.
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#2006994 - 04/09/15 01:04 PM Re: Loan Estimate Delivery and Adverse Action Notice awilli
John Burnett Offline
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The fine point in your discussion is the difference between the date on which the lender decides to decline the application and the date by which the AAN is to be provided. Clearly, the sooner the AAN is provided, the better, but there is no requirement in the regulation to provide the AAN other than within 30 days of receiving the application (as "application" is defined under Regulation B).

To demonstrate compliance with current RESPA rules and the new TRID rules, you need to document the date of your decision to deny the application in order to justify not providing the GFE or Loan Estimate.
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#2007021 - 04/09/15 01:54 PM Re: Loan Estimate Delivery and Adverse Action Notice awilli
awilli Offline
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Thank you John. And just to clarify, not "application", but rather "complete application" as defined under Reg B. Correct?
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#2007022 - 04/09/15 01:56 PM Re: Loan Estimate Delivery and Adverse Action Notice awilli
John Burnett Offline
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Correct. Complete application.
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#2007037 - 04/09/15 02:27 PM Re: Loan Estimate Delivery and Adverse Action Notice awilli
rlcarey Online
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Well, even if you have an incomplete application, you still have to do something in 30 days.
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#2007284 - 04/10/15 12:33 PM Re: Loan Estimate Delivery and Adverse Action Notice awilli
John Burnett Offline
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Good point, Randy. You can't let an incomplete app just lie there and ignore it.
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#2134005 - 06/12/17 09:23 PM Re: Loan Estimate Delivery and Adverse Action Notice awilli
ComplyCycle Offline
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Are institutions providing any other documents or disclosures if the application is denied within three days, such as the Affiliated Business Arrangement Disclosure or the Home Loan Toolkit?

Thank you in advance.

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#2134029 - 06/13/17 09:06 AM Re: Loan Estimate Delivery and Adverse Action Notice awilli
rlcarey Online
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Not sure why you would?
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#2134659 - 06/16/17 04:34 PM Re: Loan Estimate Delivery and Adverse Action Notice awilli
gcompliance Offline
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This is a different type of question but related to the delivery of the LE. We have a loan officer that had an error in the mailing address and when we mailed the LE package out it came back undeliverable. My opinion since it never made it to the customer's home we did not meet the requirement to deliver the LE. I am getting push back from the sales manager saying we met our obligation by mailing it regardless of the fact there was a slight error on the address which was clearly the loan officer's fault. I say we are not compliant. Opinions? Thanks

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#2134670 - 06/16/17 05:37 PM Re: Loan Estimate Delivery and Adverse Action Notice awilli
John Burnett Offline
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I wouldn't want to be the sales manager trying to defend that position in court or with an examiner. If you mail the disclosure to the wrong address when the applicant gave you a correct address, you haven't delivered the disclosure. Fair is fair!
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#2134687 - 06/16/17 06:32 PM Re: Loan Estimate Delivery and Adverse Action Notice John Burnett
gcompliance Offline
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Thank you for confirming my opinion. Sometimes the sales people just need to hear it from someone other than me.

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#2134720 - 06/16/17 07:57 PM Re: Loan Estimate Delivery and Adverse Action Notice awilli
Compliance NABW Offline
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Agree with John. You now have specific evidence that the customer did not receive the LE. You also know that the LO made a mistake.

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