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#2206003 - 02/13/19 05:21 PM Loan Amount Sought Refi six pieces of info
KTMiteComply Offline
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KTMiteComply
Joined: Jul 2007
Posts: 3,298
only if I want to....
Hey good morning,

I have a file where the Loan Officer is doing a Refinance to pay off Borrowers 2nd Mtg and do some Home Improvements but the Borrower was unsure how much they wanted to Borrow. So loan officer stated that since the Borrower did not know loan amount sought, it was not Disclosed, which was approved by Mgmt stating that we did not have one of the six pieces of info as a requirement by TRID, which was the Loan Amount Sought .

About a week later they called back and gave her a loan amount and it was then she Disclosed. Is this accurate? To me you at least know they've got to pay off your 2nd Mtg and should just estimate what you think you will need for Improvements and then you can finalize later if you need less or more once the appraisal comes in?

Thanks
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TRID - TILA/RESPA Integrated Disclosures Rule
#2206009 - 02/13/19 05:33 PM Re: Loan Amount Sought Refi six pieces of info KTMiteComply
rlcarey Offline
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rlcarey
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Galveston, TX
No loan amount - no TRID application. You don't have to fabricate anything.
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#2206010 - 02/13/19 05:35 PM Re: Loan Amount Sought Refi six pieces of info KTMiteComply
KTMiteComply Offline
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KTMiteComply
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Posts: 3,298
only if I want to....
Great...I do tend to overanalyze things. Thanks Randy.
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#2212734 - 05/02/19 07:59 PM Re: Loan Amount Sought Refi six pieces of info KTMiteComply
Mel in WA Offline
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Joined: Mar 2013
Posts: 1,204
Could be another case of overthinking, but here goes...…

Our online application system allows us to suppress the property value field on a refinance in order to allow a loan officer to reach out to the applicant and confirm they truly want to move forward and officially apply. This would eliminate issuing disclosures to applicants that are not serious.

However, a debate is happening that a refinance applicant knows the value of their property and we should allow it to be completed for all refinances. Thoughts??

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#2212800 - 05/03/19 05:30 PM Re: Loan Amount Sought Refi six pieces of info KTMiteComply
Mel in WA Offline
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Joined: Mar 2013
Posts: 1,204
Bump

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#2212802 - 05/03/19 06:02 PM Re: Loan Amount Sought Refi six pieces of info KTMiteComply
Truffle Royale Offline

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I did a quick search but couldn't find the previous thread that warned against suppressing one of the six required pieces for online apps. I distinctly remember it did warn against it, however.
I also find your statement "...allow a loan officer to reach out to the applicant and confirm they truly want to move forward and officially apply" disturbing. It sounds like you're discouraging prospective borrowers in an effort not to have to disclose LEs. I'd hate to have to explain that to an examiner.

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#2212803 - 05/03/19 06:03 PM Re: Loan Amount Sought Refi six pieces of info Mel in WA
Carolina Blue Offline
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Carolina Blue
Joined: Jul 2005
Posts: 958
Lost in a regulatory fog
I'd be very careful about this practice, especially if you are collecting the other five elements of an application. I thought this issue was directly addressed in the reg. but I can't find it right now. If you're suppressing information to avoid providing disclosures then I think you have a Reg.Z violation or possibly worse a UDAAP issue.

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#2212804 - 05/03/19 06:04 PM Re: Loan Amount Sought Refi six pieces of info KTMiteComply
burke116 Offline
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Joined: Jun 2014
Posts: 549
RVA
https://www.federalregister.gov/document...ation-x-and-the

Based on this premise, the Bureau stated that the proposed definition of application should facilitate consumers' ability to receive reliable estimates early in the loan process, but should not restrict a creditor's ability to determine which information is necessary for sound underwriting, because creditors would be able to continue to collect whatever additional information, in the creditor's view, is necessary for underwriting the consumer's loan application after receiving the six specific items of information that constitute an application under proposed § 1026.2(a)(3)(ii). It further stated that removing the catch-all item from the current definition could ensure that the disclosures are both received early in the loan process and based on the information most critical to providing reliable estimates. The Bureau also stated that creditors would be able to collect whatever information is, in the creditor's view, necessary for a reasonably reliable estimate, provided that it collects the additional information prior to collecting the six pieces of information specified in proposed § 1026.2(a)(3)(ii). The Bureau acknowledged in the proposal that creditors could strategically order information collection in a manner that best suits the needs of the creditor. But the Bureau believed that even if the creditor did so, the proposed definition would still be better than the current definition in facilitating consumers' ability to receive reliable estimates early in the origination process. The Bureau also believed that the proposed change to the definition could facilitate consumer shopping because it could ensure that consumers would not be required to disclose sensitive information, such as the consumer's social security number or income, until after the creditor collects less sensitive information. The more sensitive information the consumer provides, the more the consumer may feel committed to a loan offer and be less likely to continue shopping. The Bureau therefore proposed to remove the catch-all item, but believed that the proposal preserved creditors' ability to collect any additional necessary information, which it believed would strike the appropriate balance between the needs of consumers and the needs of industry.

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#2212807 - 05/03/19 06:17 PM Re: Loan Amount Sought Refi six pieces of info KTMiteComply
rlcarey Offline
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Galveston, TX
Also, from the 08/26/14 CFPB webinar. If all you are doing is collecting the five elements, then I think you are OK. If you are collecting more than that and not asking the sixth element until you contact the customer, I think that is a problem. That is not sequencing - it is collecting additional information prior to providing the early disclosures.

Ayoubi: And another question about online applications: [Bullet 4] May an online application system
refuse to accept applications submitted by a consumer that contain the six elements of an application
because other preferred information was not included?

Arculin: This is a great question and it’s a tough one but I think the answer is no. As I noted before, the
Final Rule does provide creditors a great deal of flexibility in terms of collecting additional information at
or before the time the creditor collects the six elements of an application, including the ability to sequence
or strategically collect information, as well as an ability to encourage consumers to submit additional
information that would be helpful in developing a Loan Estimate. This may commonly include saving a
specific piece of information, such as a consumer’s social security number, for last. But as we’ve also
made clear, the Bureau has never endorsed refusal of any of the six elements by a creditor because it
would like additional information. Whether the application is submitted online or through a dialog with a
loan officer or other means, the submission of the sixth element of an application by a consumer for
purposes of obtaining an extension of credit does equal an application.

In other words, there is a degree of consumer empowerment here. The Rule contemplates the use of
online application systems but does not provide special treatment for them in this regard, other than to
clarify how the principal of submission translates to online applications that are saved as we discussed in
the previous question. Therefore, the same principal that applies to oral applications would have to apply
to online applications. And in our view, this means an online application system designed to reject or
refuse to accept applications on the basis that they lack other information that a creditor normally would
prefer to have, or requires to have today beyond the six elements, would not comply with the Rule.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2236083 - 05/03/20 07:58 PM Re: Loan Amount Sought Refi six pieces of info rlcarey
Motivated Offline
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Joined: Nov 2015
Posts: 2
Our application does not require an address as borrower's often will enter an address when they are just looking and it might not be the actual property. However, for a refinance, technically the borrower didn't submit an address but if they complete the application, they entered their current address - would you consider that we must disclose within the 3 days as obviously we know the address? What exactly does sequencing of the 6 pieces mean? What compliantly can we sequence on a refinance?

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#2236090 - 05/04/20 02:18 PM Re: Loan Amount Sought Refi six pieces of info KTMiteComply
RR Joker Offline
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Posts: 20,654
The Swamp
As to refinances and addresses, yes.
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#2236127 - 05/04/20 08:28 PM Re: Loan Amount Sought Refi six pieces of info KTMiteComply
Diane Dean Offline
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Joined: Oct 2012
Posts: 92
We don't have much from the CFPB other than what's already been posted here as far as what exactly they feel is okay with sequencing or the strategic collection of information. Be careful not to forget about Regulation B, however. Here is how we lay it out in our Mortgage Life Cycle training manual:

The Rule does permit sequencing or “strategic collection” of information (the six items)... However, ...it does not endorse outright refusal of that information to delay completion of the application, even where the creditor has not obtained other information that it would prefer to have... beyond the six elements. Therefore, the creditor must still produce the Loan Estimate within three business days even if it is unable to collect the sought-after information. [Outlook Live Webinar 8-26-14]

***Regulation B Reminder: Nevertheless, the creditor must act with reasonable diligence to collect information needed to complete the application. For example, the creditor should request information from third parties, such as a credit report, promptly after receiving the application. If additional information is needed from the applicant... the creditor should contact the applicant promptly. [Comment #6 to §1002.2(f)].
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