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#2167788 - 03/13/18 10:53 AM Valid Change of Circumstances?
ComplianceMN Offline
Member

Registered: 05/05/15
Posts: 67
Loc: MN
I think this is a valid change of circumstances but wanted to confirm. We are doing a construction loan and obviously included the cost of the appraisal on the LE. Well as it turns out because of the weather the customer is going to wait until later to complete some of the outside work and so some of the loan amount will be held back in escrow for those costs. There will be a final inspection that needs to be done when all of the outside work is completed (which we did not know about at the time of issuing the LE). So because we did not know about this at the time, I believe we can reissue the LE (assuming we are within our 3 day timeframe) to include the inspection fee, correct? Thanks!

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TRID - TILA/RESPA Integrated Disclosures Rule
#2167792 - 03/13/18 11:04 AM Re: Valid Change of Circumstances? [Re: ComplianceMN]
rlcarey Offline
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Registered: 07/16/01
Posts: 66625
Loc: Galveston, TX
Sounds like: "New information specific to the consumer or transaction that the creditor did not rely on when providing the original disclosures required under paragraph (e)(1)(i) of this section." to me.
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#2167799 - 03/13/18 11:14 AM Re: Valid Change of Circumstances? [Re: ComplianceMN]
RR Joker Offline
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Registered: 11/15/02
Posts: 19800
Loc: The Swamp
I do an awful lot of construction loans and have a final inspection involved for every one of them. I'm wondering why you wouldn't typically have one to verify completion under normal circumstances?
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#2167809 - 03/13/18 11:28 AM Re: Valid Change of Circumstances? [Re: ComplianceMN]
Truffle Royale Offline


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Registered: 07/09/03
Posts: 16627
I don't think the OP is talking about the same final inspection that you are, Joker.
We do a lot of construction perm loans here and never have a final inspection on them.
The appraisal comes to us 'as is'.

The OP's situation is for work that will be left undone till weather changes. They are doing an escrow holdback for completion and will need a final inspection after it's finished.
I agree with Randy that this falls under 'new information' and is definitely a valid CC that the OP can redisclose for.

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#2167829 - 03/13/18 12:11 PM Re: Valid Change of Circumstances? [Re: ComplianceMN]
ComplianceMN Offline
Member

Registered: 05/05/15
Posts: 67
Loc: MN
Thanks for feedback. I did get some additional information. We are not actually doing the construction loan. The builder financed the construction and so we are doing a purchase loan for our customer but because of the weather the builder won't be able to complete some of the outside work (driveway and landscaping) prior to closing and so we just found out we will have to do an escrow holdback for completion of this work pending a final inspection.

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#2168754 - 03/16/18 03:32 PM Re: Valid Change of Circumstances? [Re: ComplianceMN]
sassycassy Offline
New Poster

Registered: 10/14/14
Posts: 2
Our institution has recently implemented the borrower to sign a rate lock agreement once they have given their Intent to Proceed or they can sign an agreement to float the rate until they wish to lock. My question is, if the customer decides to float the rate, and the rate increases from the time the initial LE was disclosed, should we treat this as a Change of Circumstance or a Counteroffer?

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#2168768 - 03/16/18 03:51 PM Re: Valid Change of Circumstances? [Re: ComplianceMN]
RR Joker Offline
10K Club

Registered: 11/15/02
Posts: 19800
Loc: The Swamp
Welcome to BOL smile

Once you lock the rate, you will issue a new LE, but until that time, a floating rate is just that...no re-disclosure needed until you lock it.
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My opinion only. Not legal advice.

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#2168800 - 03/16/18 04:48 PM Re: Valid Change of Circumstances? [Re: ComplianceMN]
Darth HMDA, CRCM Offline
Diamond Poster

Registered: 12/13/13
Posts: 1245
Loc: CA
agreed.

And welcome to BOL!! smile

we need more sassy people haha
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The opinions expressed are mine, do not represent the opinions of my employer, and they are not to be taken as legal advice.

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