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#2108180 - 11/21/16 09:26 PM
Late LE
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Joined: May 2004
Posts: 10,124
Way, way south.
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How do you all handle a late Loan Estimate? Just found out our mortgage side didn't do the LE within the 3 days for some reason and now we're on the hook for a "free loan" so I'm trying to determine what, exactly, we have to pay for with this loan. Is it all closing costs on the LE, or only bank fees? I searched this but didn't find the exact answer. Thanks.
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#2108193 - 11/21/16 10:09 PM
Re: Late LE
MB Guy
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10K Club
Joined: Oct 2000
Posts: 40,086
Cape Cod
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That's because the Bureau has not issued anything official on the question. The closest we have to any guidance is the April 2011 RESPA Roundup from HUD, which addressed situations in which the GFE was not provided. There followed a flurry of inquiries about late GFEs, and responses that came down on both sides of the question. David Friend, reputedly the HUD guru on the topic said the rule doesn't address late (rather than missing) GFEs, so "check with your prudential regulator." A few days later, David's boss at the time, Andrew Fay, said that if a loan originator fails to deliver a GFE "within the 3 day time limit ..., the [HUD-1] comparison chart must be completed with $0's in the GFE column." But nothing published officially.
The Bureau hasn't offered any comment on the question.
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John S. Burnett BankersOnline.com Fighting for Compliance since 1976 Bankers' Threads User #8
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#2108194 - 11/21/16 10:12 PM
Re: Late LE
MB Guy
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Power Poster
Joined: Oct 2009
Posts: 9,104
OK
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MB, we've had a late LE or two (a day or two late mind you)......i obviously wasn't happy about it, but i didn't and wouldn't come down on the side of a free loan, especially when it's no later than those. Several weeks/months late or a rash of late ones might be different. Just giving you my thoughts/experience on the issue.
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#2108197 - 11/21/16 10:16 PM
Re: Late LE
MB Guy
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Power Poster
Joined: Oct 2009
Posts: 9,104
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Didn't see John's post......as John says, there's no (current) official guidance, so i suppose the free loan or no free loan is a risk issue--but i know my bank is not unique (nor was it unique pre-TRID on this issue) in not assuming late GFE/LE equals free loan.
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#2108213 - 11/21/16 11:43 PM
Re: Late LE
MB Guy
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Member
Joined: Nov 2016
Posts: 75
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My bank does not assume that late LE equals a free loan. I would agree with raitchjay on this issue.
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#2108236 - 11/22/16 01:38 PM
Re: Late LE
MB Guy
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Joined: Oct 2000
Posts: 40,086
Cape Cod
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The consensus that seemed to form on the question of the late GFE was that, while the (old) rule required that $0 be placed in the GFE column in the GFE vs Settlement Statement comparison when no GFE was issued, there was no such explicit statement when the GFE was simply provided late, Mr. Fay's statement notwithstanding. There was certainly no agreement among the prudential regulators on how to address the tardy GFE question.
This is, however, the perfect example of the question for which you might never want to receive an official answer.
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John S. Burnett BankersOnline.com Fighting for Compliance since 1976 Bankers' Threads User #8
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#2108337 - 11/22/16 06:29 PM
Re: Late LE
MB Guy
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Platinum Poster
Joined: Jul 2015
Posts: 542
Gorham, ME
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We have taken the stance that if a LE is late, we will issue as we normally would. In the instance where the LE was not issued AT ALL, we would pay all fees on the loan.
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#2108442 - 11/23/16 01:27 PM
Re: Late LE
MB Guy
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Diamond Poster
Joined: Oct 2015
Posts: 1,669
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As several others have noted, there is no official guidance on this. Some lenders take the approach to let the borrower have a "free" loan, while others just issue the LE as soon as they recognize they missed it. My take is that it is a technical violation of TRID and lenders may be subject to the penalties noted by various regulators, such as $4,000 per violation, etc. However, I don't see any reason why a borrower would get a free loan because a lender was a day or two late on the LE.
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#2108497 - 11/23/16 03:55 PM
Re: Late LE
MB Guy
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10K Club
Joined: Jul 2001
Posts: 83,362
Galveston, TX
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I agree, but it is a little more than a "technical violation of TRID". It is a blatant violation.
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#2108551 - 11/23/16 05:43 PM
Re: Late LE
rlcarey
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Joined: Oct 2015
Posts: 1,669
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Well, technical meaning "exactly according to the rule," and not necessarily a pattern or practice. Sorry, regulatory speak.
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