I am certain many of us currently are looking at mortgage application volume in comparison to reduced staffing due to Covid 19 - in light of this, we are trying to be proactive but recognize we may unfortunately have some LEs issued late. What is the regulatory penalty and do we have to pay the closing costs for the customer or can we still charge the fees to the customer?

Thanks for your insight!

You going to be late. That is it. Only the regulators can address penalties. But I think they might be a little lenient under the circumstances.

A late LE does not constitute a free loan. Where a penalty would come into play is if the FI has established a pattern/practice for providing the LE late.

I agree with Randy though that under the circumstances I don't see the regulatory agencies assessing penalties during this period. However, that may not hold true for FIs that have established such a pattern before the pandemic hit or continues the pattern after the pandemic subsides.