The timing for providing the Risk Based Pricing Notice for closed-end transactions is before consummation of the transaction, but not earlier than the time the decision to approve an application for, or a grant, extension, or other provision of credit is communicated to the consumer.

For our home loan center applications, the consumer logs onto our secure website and submits the application from home. Our current process sends all the early disclosures electronically to the consumer right then.

The way I am reading the RBPN would not allow us to include this notice in that early disclosure packet since we have not yet made the decision to approve. Am I over reading this?

Also, if we go with the exception notice option, could we include the notice at application?

Our bank is using tiered pricing and will use the risk based pricing notices at the confirmation of acceptance of the loan to the consumer (when we call them) and/or at loan closing as part of the closing documents (when they will sign it). We already have different disclosures for our mortgage customers as required by FACT Act a few years ago, and this reveals the credit scores used.

If you are considering risk based pricing notices for mortgages secured by 1-4 family dwellings, I would wonder why.

River Girl - I had the same question.

According to the Reg, you are not required to provde the RBP notice on a loan secured by residential real property if you instead provide the Notice to HLA modified to include the additional information required by the RBP rule, using the timing specified for the Notice to Home Loan Applicant. (as soon as reasonably practible and before consummation). (222.74 Exceptions (d)(1)(2) and (3) Loans secured by residential real property)

River Girl -- Don't know if your timing questions got answered, so let me try.

If you are going with the Risk-Based Pricing notice (NOT the exception notice), you are correct that you can't provide it at application because you won't have made a credit decision then. You could theoretically provide it with your 3-day disclosures if you've made the credit decision by then, but you indicate you do your 3-day disclosures "instantly" so that won't work.

The theory here is that until you've made a credit decision, you don't know whether the customer has gotten a risk adjusted price; therefore, the disclosure has to come after that. I'd recommend sending your Risk-Based Pricing notice with your "Congratulations, your loan is approved" letter.

If you go with the exception notice (i.e., the replacement for the Notice to the Home Loan Applicant), you theoretically could send that with your "instant" disclosures if you pull a credit report instantly and have the data. Otherwise, the exception notice has to be delivered "as soon as reasonably practical" and that may be earlier than your "Congratulations" letter. And again, as others have noted, I'd also recommend going with the exception notice for 1-4 secured loans -- much easier than the Risk-Based Pricing notice.

Good luck.