I have a new manager in our real estate department that is giving the GFE, early TIL and all other disclosures when the applicant calls. They send all the disclosures with an application for the consumer to complete. When they receive the completed application back they place a date stamp indicating the date they receive the application. We use a date stamp system to indicate the start of the application. In most all cases the GFE and other disclosures are given anywhere from 1 to 10 days prior to the date stamp that indicates the start of the application. I have been reading RESPA and HUDS Reg X and cannot find anything in regards to this being some type of problem. Can someone assist me? I am not sure this is in violation.

I don't think that it is either. Disclosure time frames are designed to ensure that the applicant obtains the information in a reasonable time. Early is reasonable. Of course, if the transaction changes, then re-disclosures are necessary.

Tina, here's an identical post I think will help you.

Great post, THANKS!!

I didn't go to the linked post but what hit me is how can you send an accurate GFE without knowing something about the property? Is all new title work needed? Is a full-blown new appraisal needed? Is a survey needed? etc. If the GFE is going out showing the worst possible scenario with all costs have you really complied? If so, it would seem you have at least put yourself at a competetive disadvantage.

Just something to think about.

They are probably giving a GFE that contains "range" info for a typical situation. I'm seeing more and more of these. They are generic for the type of loan discussed/applied for.

Playing devil's advocate for a minute on that....has the consumer really received meaningful information to use for comparison purposes if every lender starts giving out GFEs that say "Your costs will range from $1,000 to $3,000?"

I recall the old days of discussion when folks were coming in for pre-approval letters and whether that process triggered a GFE. The answer was no since no specific house was in mind to tailor the GFE to the circumstances that might be unique to the house. Seems to me that rule would hold true here as well. Until you have information on the house how can a meaningful GFE be given?

Steve, we did this at another institution upon request of a customer. We would take the information they provided and would prepare a GFE. We also had a standard cover letter informing them the GFE was based on information given, that is was for informational purposes only, not connected with any application received by the requester and our best guess (based on the property's location) as to what the taxes and insurance would be and that the pre-paid interest was based on 15 days. We also stated that if they chose to complete an application with us, we would then provide an accurate GFE based upon the terms requested in the application. Because of our market area, our "preliminary" GFE was usually within $100-$600 (either way) of the "final" GFE given at application. We also stamped the GFE in big red block letters "Comparison GFE".

In reply to:

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has the consumer really received meaningful information to use for comparison purposes if every lender starts giving out GFEs that say "Your costs will range from $1,000 to $3,000?"

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[RANT Warning, not to Steve] Most likely not, but is that the bank's fault, or HUD's? HUD has given requirements for GFE's that in todays business arena for some banks (ie, centralized processing, applications taken in at any number of offices) are unable to be accomplished from the information that HUD us requiring to be disclosed. HUD requires the GFE to go out within 3 business days and it sometimes takes the documentation that length of time just to get where it's supposed to go.

We just had FDIC in and were 'criticized' for not having all the dollar amounts on the GFE, and for time-frame. I presented the dilemma to them and we came out of it with a GFE pre-filled out with $$ ranges. We were told this was acceptable.

So to answer, no, it's not meaningful, but then, HUD's made it that way. [RANT over]

These "early" GFEs are usually only given out when the customer calls and says I'm thinking about buying this house, I will need $XX,XXX for XXX months. Would you please send me a statement (that's what they usually request in our area anyway) an estimate of what it would cost me at your current rates. The customer is not applying for a loan, they are requesting information.

So, let me throw this out, a GFE is only required when an application is received. So, do the "early" GFEs even have to comply with RESPA (just a thought) if they are only being given as a "courtesy" to the customer? Would it be better, in these cases, to send an estimated "closing statement"?

Warning...somewhat of a rant follows.

This discussion points out the biggest beef all of us that struggle with compliance have with HUD --- they don't know how banks work in the real world. I was part of a group in DC that once tried to get the responsiblity for RESPA taken away from HUD and given to the FRB as the latter understands banks and the effect of regs on them. The FRB wanted nothing to do with RESPA. HUD can't even get simple things done like getting a settlemeent costs booklet out for non-purchase deals. So we struggle with what goes in the GFE, what constitutes an "application" for the GFE and the miniscule details of what goes in and on what line for the HUD-1.

I was always under the impression an application for the purposes of the GFE was something more than a name and income information. A specific house was needed to make the application complete to start the 3-day clock. Why I have this in my head is something I can't lay my hands on right now. I guess we could ask HUD....