We sent loan documents to a borrower to sign that listed an incorrect rate and lower payment than what we were actually offering the borrower.

This was not caught, borrower signs docs and sends them back. The issue was then caught, so we sent the borrower updated documents with a higher rate and payment. Borrower signed and sent back.

Is this ok? I know that is was a simple error, but the borrower signed the docs for the lower rate. It seems like it could be considered deceptive to send docs with a lower rate and then say "our mistake, your rate is higher" and send new docs.

Is this a TILA violation or UDAAP? Or is it permissible?

Signed what specific documents?

The borrower signed loan documents with the lower rate. Then was told those were wrong and was sent the loan documents with the higher rate and signed those.

He signed the note?

Yes, the note.

Good lord. You entered into a signed legal contract with the borrower and then said oops - we did not mean it? Here - please sign these documents at a higher rate so we can shred the other ones.

I think you can figure out if that would be a UDAAP for not.

That sounds like a lawsuit waiting to happen. I can't believe the borrower would actually sign new docs.

Lucy holds the football for Charlie Brown to kick. THIS time, she promises, she won't grab the ball just when Charlie Brown tries to kick it. You know the rest. The borrower is Charlie Brown and the bank is Lucy.