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#2203333 - 01/17/19 09:02 PM Transfer Tax - Changed Circumstance?
Jesenia - Compliance Offline
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The Original / Initial Loan Estimate was disclosed showing 2% transfer tax:1% paid by the Seller, and 1% paid by buyer. We were just told, by the attorney, that since this is an estate transfer of ownership, the transfer tax is exempted and asked us to disclose. Since this is new information, would it qualify as a changed circumstance? The transfer tax is zero % tolerance.

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#2203335 - 01/17/19 09:08 PM Re: Transfer Tax - Changed Circumstance? Jesenia - Compliance
rlcarey Online
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So you are saying that there is not going to be a transfer tax at all? Then what difference does it make? A changed circumstance only happens when fees are going up and not down. You are more than free to issue an informational LE without the transfer taxes.
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#2203368 - 01/18/19 03:26 AM Re: Transfer Tax - Changed Circumstance? rlcarey
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Quote:
A changed circumstance only happens when fees are going up and not down.
wait...what??? Got a citation to back that up, Randy, because it's news to me.

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#2203372 - 01/18/19 12:35 PM Re: Transfer Tax - Changed Circumstance? Jesenia - Compliance
rlcarey Online
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19(e)(3)(iv)(A) Changed circumstance affecting settlement charges. Changed circumstances cause the estimated charges to increase or, in the case of estimated charges identified in paragraph (e)(3)(ii) of this section, cause the aggregate amount of such charges to increase by more than 10 percent. For purposes of this paragraph, “changed circumstance” means:
Last edited by rlcarey; 01/18/19 12:36 PM.
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#2203380 - 01/18/19 02:18 PM Re: Transfer Tax - Changed Circumstance? Jesenia - Compliance
RR Joker Offline
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It's always been that way...an actual CC has never consisted of decreases. If you have time on your hands and just want to issue an info LE, knock yourself out...otherwise just leave it off the CD. No harm, no foul.
Last edited by RR Joker; 01/18/19 02:19 PM.
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#2203404 - 01/18/19 04:01 PM Re: Transfer Tax - Changed Circumstance? Jesenia - Compliance
Truffle Royale Offline

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I'm not denying when you need to redisclose. Rather I'm taking issue with the statement that a changed cirucmstance only occurs when fees increase. The validity of something being a changed circumstance is not dependant on whether or not the occurance changes a fee. The prime example of this is the rate lock.

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#2203453 - 01/18/19 06:04 PM Re: Transfer Tax - Changed Circumstance? Jesenia - Compliance
Dan Persfull Offline
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A changed circumstance is specifically defined by the regulation and a decrease in fees is not part of that definition.

Any revised LE issued due to a decrease in fees is simply an informational LE and it does not reset any tolerance levels. Even a decrease in fees due to a borrower requested change is not a changed circumstance under the regulation.

(C) Revisions requested by the consumer. The consumer requests revisions to the credit terms or the settlement that cause an estimated charge to increase.
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#2203456 - 01/18/19 06:16 PM Re: Transfer Tax - Changed Circumstance? Jesenia - Compliance
rlcarey Online
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Well, that is a separate issue. If the loan was not previously locked, then you are required to issue another LE - regardless if anything has changed or you have a violation. If you have a changed circumstance, issuing a revised LE is optional. It is only if you want to reset your tolerance baselines.
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#2203770 - 01/23/19 10:03 PM Re: Transfer Tax - Changed Circumstance? Jesenia - Compliance
John Burnett Offline
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There are three things that are changed circumstances, listed in 1026.19(e)(3)(iv)(A):

(1) An extraordinary event beyond the control of any interested party or other unexpected event specific to the consumer or transaction;

(2) Information specific to the consumer or transaction that the creditor relied upon when providing the disclosures required under paragraph (e)(1)(i) of this section and that was inaccurate or changed after the disclosures were provided; or

(3) 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.

Note that none of them has to change a closing cost to be a changed circumstance. However, the only reason you need to know what they are is to recognize when they can affect (adversely to the consumer) a closing charge.

If one of those changed circumstances results in an increase to closing costs, or if the consumer requests a change that increases closing costs, or if the consumer's intent to proceed is received after the stated expiration of the loan estimate terms (which must be at least 10 days after they are provided), a revised LE can be provided within 3 business days to reflect new current info and reset the cost basis for the directly affected costs.

And just because it bugs me, it's a changed circumstance, not a change of circumstances.
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#2203775 - 01/23/19 10:19 PM Re: Transfer Tax - Changed Circumstance? Jesenia - Compliance
raitchjay Offline
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"And just because it bugs me, it's a changed circumstance, not a change of circumstances."

Glad i'm not the only one.....it's also not a "change IN circumstance".
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#2203801 - 01/24/19 01:10 PM Re: Transfer Tax - Changed Circumstance? Jesenia - Compliance
Adam Witmer Offline
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You guys (John & raitchjay) are cracking me up on your semantics regarding "changed circumstance." laugh

For the record, the 12/31/2013 TRID final rule does use "change in circumstances" a couple of times and the 2017 amendments uses the phrase "change of circumstance," even though neither term is used in the actual reg or commentary. So, if we are getting technical, the CFPB apparently recognizes those phrases. wink
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#2203819 - 01/24/19 02:38 PM Re: Transfer Tax - Changed Circumstance? Jesenia - Compliance
raitchjay Offline
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Ok...let me rephrase then........the term "change in circumstance" doesn't agree with me. I like plain old "changed circumstance". smile
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#2203846 - 01/24/19 04:24 PM Re: Transfer Tax - Changed Circumstance? Jesenia - Compliance
mtngrrl Offline
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And ALL of you are cracking me up, because only truly deeply nerdy compliance geeks would ever have this conversation, much less find it entertaining! (and yes, I'm including myself in the population...)

smile
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#2203851 - 01/24/19 04:32 PM Re: Transfer Tax - Changed Circumstance? Jesenia - Compliance
raitchjay Offline
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laugh true
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#2203853 - 01/24/19 04:48 PM Re: Transfer Tax - Changed Circumstance? mtngrrl
Adam Witmer Offline
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Originally Posted By mtngrrl
only truly deeply nerdy compliance geeks...)

I find this to be a politically correct statement. wink
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#2203857 - 01/24/19 04:52 PM Re: Transfer Tax - Changed Circumstance? John Burnett
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And while I enjoy the semantics of this, (it's a 'valid CC' to me) I need to take the time to thank John for proving my point.
Quote:
Note that none of them has to change a closing cost to be a changed circumstance.

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#2203863 - 01/24/19 05:15 PM Re: Transfer Tax - Changed Circumstance? Jesenia - Compliance
RR Joker Offline
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I've used COC from day one of it being a 'thing' before TRID ever even happened.
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#2206521 - 02/19/19 09:55 PM Re: Transfer Tax - Changed Circumstance? Jesenia - Compliance
julesbok Offline
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OK
We have a twist on the situation that started this string - we just found out this morning from the title company that the buyer is responsible for the documentary stamps (normally paid by the seller in OK, so they were not disclosed on the LE) on the purchase of an ORE property from FNMA. Our CloD needs to go out today in order to close by this Friday - 2/22 due to right of rescission on their current residence also being pledged on the loan (this is a bridge loan)…closing on the purchase is scheduled for 2/28.

The Seller is providing a $9,500 credit towards all closing costs, so the doc stamps will be covered, as the total closing costs come in less than the Seller Credit listed in Section L on page 3.

The question is, because the Documentary Stamp figure is being shown in the Buyer column on the CloD, do we also need to show a Lender Credit - no time to issue a Changed Circumstance LE and send out a revised CloD tomorrow, since it was not disclosed on the LE?

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#2206522 - 02/19/19 09:58 PM Re: Transfer Tax - Changed Circumstance? Jesenia - Compliance
rlcarey Online
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If this is a changed circumstance you can document that on the initial CD if you are within 4 business days of closing. You don't have to do it on an LE.
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#2206524 - 02/19/19 09:59 PM Re: Transfer Tax - Changed Circumstance? Jesenia - Compliance
julesbok Offline
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Oh good! Thanks so much for the quick response Randy! I really appreciate it!

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