Thread Options
#2258581 - 08/24/21 01:53 PM Overstating fees on LE
Shih_Tzu_Lvr Offline
Member
Joined: Nov 2011
Posts: 84
Can the lender purposely overstate loan estimate costs in order to avoid curing?

I don't believe so but cant find reference in the regulation.
Last edited by John Burnett; 08/24/21 06:42 PM.
Return to Top
TRID - TILA/RESPA Integrated Disclosures Rule
#2258583 - 08/24/21 02:22 PM Re: Overstating fees on LE Shih_Tzu_Lvr
Inspector Offline
Gold Star
Joined: Apr 2016
Posts: 250
The disclosures need to be made in good faith and arbitrarily inflating the fees is not a good faith disclosure.

That said, if you are frequently seeing appraisals that are coming back with higher charges than you are originally quoted or you are regularly needing appraisal re-inspections it is not unreasonable to include a higher or additional fee to reflect the elevated possibility that those fees will occur.
_________________________
Opinions expressed are my own and do not reflect legal advice or the opinions of my employer.

Return to Top
#2258585 - 08/24/21 02:38 PM Re: Overstating fees on LE Shih_Tzu_Lvr
Inherent_Risk Offline
Gold Star
Joined: Jan 2017
Posts: 320
For a citation:

1026.17(c)(2)(i) If any information necessary for an accurate disclosure is unknown to the creditor, the creditor shall make the disclosure based on the best information reasonably available at the time the disclosure is provided to the consumer, and shall state clearly that the disclosure is an estimate.

Official interpretation of Paragraph 17(c)(2)(i)
1. Basis for estimates. Except as otherwise provided in §§ 1026.19, 1026.37, and 1026.38, disclosures may be estimated when the exact information is unknown at the time disclosures are made. Information is unknown if it is not reasonably available to the creditor at the time the disclosures are made. The “reasonably available” standard requires that the creditor, acting in good faith, exercise due diligence in obtaining information. For example, the creditor must at a minimum utilize generally accepted calculation tools, but need not invest in the most sophisticated computer program to make a particular type of calculation. The creditor normally may rely on the representations of other parties in obtaining information. For example, the creditor might look to the consumer for the time of consummation, to insurance companies for the cost of insurance, or to realtors for taxes and escrow fees.

AND

Official interpretation of 1026.19(e)(1)(i) Creditor.
1. Requirements. Section 1026.19(e)(1)(i) requires early disclosure of credit terms in closed-end credit transactions that are secured by real property or a cooperative unit, other than reverse mortgages. These disclosures must be provided in good faith. Except as otherwise provided in § 1026.19(e), a disclosure is in good faith if it is consistent with § 1026.17(c)(2)(i). Section 1026.17(c)(2)(i) provides that if any information necessary for an accurate disclosure is unknown to the creditor, the creditor shall make the disclosure based on the best information reasonably available to the creditor at the time the disclosure is provided to the consumer. The “reasonably available” standard requires that the creditor, acting in good faith, exercise due diligence in obtaining information. See comment 17(c)(2)(i)-1 for an explanation of the standard set forth in § 1026.17(c)(2)(i). See comment 17(c)(2)(i)-2 for labeling disclosures required under § 1026.19(e) that are estimates.

Return to Top