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#2185098 - 07/12/18 01:58 PM Revised LE for Informational Purposes
Luv2run Offline
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Now that there has been clarification that a lender may revise an LE for informational purposes(TILA RESPA 2017), I was curious to see who will send out revised LE's for this purpose. I am hesitant to encourage this practice based on the fact that the revised version will have to have the most current information to date......I am afraid it will confuse some in the tolerance comparison. I would love to hear some thoughts on this.
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TRID - TILA/RESPA Integrated Disclosures Rule
#2185104 - 07/12/18 02:42 PM Re: Revised LE for Informational Purposes Luv2run
RR Joker Offline
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Nope...waste of precious time.

As you point out, I would also be concerned about tracking correct comparison.
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#2185110 - 07/12/18 02:57 PM Re: Revised LE for Informational Purposes Luv2run
raitchjay Offline
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OK
I would agree and add that, at least in our market, most of your applicants simply don't care, so you're wasting your time for something that doesn't benefit your bank and that your applicant very likely views as not your bank being diligent and professional, but as a nuisance.
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#2185115 - 07/12/18 03:00 PM Re: Revised LE for Informational Purposes Luv2run
Adam Witmer Offline
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I agree with raitchjay and Joker. It's not only a waste of time, but it makes it more complicated for determining good faith (tolerances).
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#2185208 - 07/12/18 08:19 PM Re: Revised LE for Informational Purposes Luv2run
Luv2run Offline
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Thanks so much! I am glad to see that I am not alone in my thinking.
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#2185315 - 07/13/18 04:10 PM Re: Revised LE for Informational Purposes Luv2run
Larry Offline
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We're working on system changes to be able to provide them when requested by borrowers.

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#2185352 - 07/13/18 06:11 PM Re: Revised LE for Informational Purposes Luv2run
John Burnett Offline
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While I don't disagree with your reasoning for not wanting to "muddy the waters" here -- information overload was one of the things the Bureau also wanted to avoid for consumers -- there may be times when there is a significant change in the cash to close (to or from the borrower). An informational loan estimate might be in order then. But the three-day wait after receipt of the CD may also give the borrower the time to adjust expectations.

There are also situations when you have to send a revised LE within 3 biz days of a changed circumstance or other event under 1026.19(e)(3)(iv). When you do that, you have to bring all the info on the LE current, and that is going to create tolerance calculation challenges, too.
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#2185357 - 07/13/18 06:22 PM Re: Revised LE for Informational Purposes Luv2run
Tarhe Offline
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If a revised LE is provided for informational purposes only, but it does not reset tolerances (perhaps because the 10% threshold was not met), is it true that the amounts disclosed under "Loan Estimate" on the Closing Disclosure must be from the most recent LE provided to the consumer, even if the most recent LE was only provided for informational purposes and not to reset tolerances?

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#2185401 - 07/13/18 10:15 PM Re: Revised LE for Informational Purposes Luv2run
Tarhe Offline
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I found this reference which supports my email above:
38(e)6. Estimated amounts. The amounts disclosed on the alternative calculating cash to close
table under the subheading “Loan Estimate” under § 1026.38(e)(1)(i), (2)(i), (4)(i), and (5)(i) are
the amounts disclosed on the most recent Loan Estimate provided to the consumer under
§ 1026.19(e).

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#2208656 - 03/13/19 06:20 PM Re: Revised LE for Informational Purposes Luv2run
Stephen McCall Offline
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Bumping this up again in response to the two posts above mine, as I've been doing some similar research this morning.

My thought process:
If you issued a revised LE for informational purposes, and not because a valid COC event occurred, then the fees you use to test for tolerance - and the amount you disclose in the "LE" column on the Cash to Close table - should be from the most recent LE disclosed in accordance with COC provisions under 19(e)(3).

Example:
  • 3/1: Initial LE
  • 3/4: COC Event + Revised LE
  • 3/19: Borrower asks for new copy, despite no valid COC event + Informational LE delivered
  • 3/20: Informational LE
  • 3/25: Initial CD


Summary:
The baseline for determining tolerances would be the fees that were disclosed on the 3/4 LE
The amounts in the LE column in the "Calculating Cash to Close" table on p. 3 of the 3/25 CD would be from the 3/4 LE.

Do you guys agree?

§1026.19(e)(3)(iv)-4
4. Revised disclosures for general informational purposes. Section 1026.19(e)(3)(iv) does not prohibit the creditor from issuing revised disclosures for informational purposes, e.g., to keep the consumer apprised of updated information, even if the revised disclosures may not be used for purposes of determining good faith under § 1026.19(e)(3)(i) and (ii).

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#2208664 - 03/13/19 06:27 PM Re: Revised LE for Informational Purposes Luv2run
rlcarey Offline
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No - 3/20

Official Interpretation

38(i) Calculating cash to close.


5. Estimated amounts. The amounts disclosed in the “Loan Estimate” column of the calculating cash to close table under § 1026.38(i)(1)(i), (3)(i), (4)(i), (5)(i), (6)(i), (7)(i), (8)(i), and (9)(i) are the amounts disclosed on the most recent Loan Estimate provided to the consumer.
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#2208668 - 03/13/19 06:34 PM Re: Revised LE for Informational Purposes Luv2run
Adam Witmer Offline
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I agree with Randy that the calculating cash to close info comes from the most recent LE.

Also, to clarify: your fees for tolerances will most likely come from both the 3/4 revised LE AND the initial LE. While the fees on the revised LE most likely align correctly, there could be instances where the initial LE is different and, without a valid changed circumstance for those fees, you would need to revert to the initial LE.
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#2208669 - 03/13/19 06:34 PM Re: Revised LE for Informational Purposes Stephen McCall
John Burnett Offline
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Sorry, there's another comment that you need to see:

Comment 38(i) -5:
5. Estimated amounts. The amounts disclosed in the “Loan Estimate” column of the calculating cash to close table under § 1026.38(i)(1)(i), (3)(i), (4)(i), (5)(i), (6)(i), (7)(i), (8)(i), and (9)(i) are the amounts disclosed on the most recent Loan Estimate provided to the consumer. (emphasis added).

You don't do your tolerance calculations using the estimated amounts shown in the Estimates column of the Calculating Cash to Close table of the Closing Disclosure. You use the original estimates as adjusted by any revised Loan Estimates issued in compliance with §1026.19(e)(3)(iv) and (e)(4).
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#2208671 - 03/13/19 06:37 PM Re: Revised LE for Informational Purposes Luv2run
John Burnett Offline
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Glad to see that Randy, Adam and I are in harmony on this.
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#2208673 - 03/13/19 06:42 PM Re: Revised LE for Informational Purposes Luv2run
Adam Witmer Offline
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That is always nice, isn't it, John? wink
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#2208711 - 03/13/19 11:55 PM Re: Revised LE for Informational Purposes Luv2run
Stephen McCall Offline
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Thank you guys for the insight. smile

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