I am interested in some opinions on this scenario and whether adding or revising information is necessary to have made a "good faith" disclosure of fees. I am using HOA fees but the question would be applicable to other items that fall under 1026.19(e)(iii).

Lender is not aware that a property has an HOA and issues a LE based upon the best information at the time that there is no HOA. A few days later the lender gets the PSA which specifically notes the HOA set up fee that has to be paid when then the loan closes. This would not require re-disclosure.

Now after the PSA is received, lets say there is a rate lock or some other change circumstance that requires a new LE. Would the lender be required to add the HOA fees on this revised LE when the reason for the new LE is not related to the HOA fees?

All fees on any disclosure issued must be based on the then currently known fees based on good faith. If you know - you have to add or updated as required on any disclosure issued.

5. Best information reasonably available. Regardless of whether a creditor may use particular disclosures for purposes of determining good faith under § 1026.19(e)(3)(i) and (ii), except as otherwise provided in § 1026.19(e), any disclosures must be based on the best information reasonably available to the creditor at the time they are provided to the consumer.

Following up to my own question from over a year ago, should have worked this all the way through then.

Given the same scenario I laid out above, where the second LE does not include the HOA fees in good faith, would those fees be subject to a tolerance? 1026.19(e)(3)(iii) states that if fees are not disclosed in good faith they become subject to the tolerance under 1026.19(e)(3)(i) which doesn't allow for changes. However, the reference in the commentary is to "original estimates" and not subsequent estimates.

Maybe I am trying to split hairs too finely but would the "not in good faith" HOA fees in my scenario still not be subject to tolerance since they are subsequent estimates and not the original estimate?

If you are issuing a disclosure, whether an initial or subsequent disclosure, those disclosure are provided under .19(e)(1)(i) and all subsequent disclosure would be considered under the general good faith provisions and all such charges would have to be disclosed at that time. Failure to do so, IMHO, is going to require a cure.


Official Interpretation

19(e)(3)(iii) Variations permitted for certain charges.

Comment 3 - For example, if the consumer informs the creditor that the consumer will obtain a type of inspection not required by the creditor, the creditor must include the charge for that item in the disclosures provided under § 1026.19(e)(1)(i), but the actual amount of the inspection fee need not be compared to the original estimate for the inspection fee to perform the good faith analysis required by § 1026.19(e)(3)(iii). The original estimated charge, or lack of an estimated charge for a particular service, complies with § 1026.19(e)(3)(iii) if it is made based on the best information reasonably available to the creditor at the time that the estimate was provided.

Thank you sir! And thanks for your answer in 2018 as well!