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#1934951 - 06/23/14 10:53 PM LPMI - Change of Cirrcumstance?
Compliance Audit Offline
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Is changing from borrower paid MI to lender paid MI to meet qualified mortgage standards a change in circumstance?

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#1934958 - 06/24/14 12:11 AM Re: LPMI - Change of Cirrcumstance? Compliance Audit
Truffle Royale Offline

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Not in my opinion.
It wouldn't affect you negatively because you shouldn't be going over the tolerance by switching to lender paid either.

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#1934978 - 06/24/14 12:43 PM Re: LPMI - Change of Cirrcumstance? Compliance Audit
#Just Jay Offline
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#Just Jay
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Cheeseheadland
Yes, I think it does. Lender paid MI can have a significant change on the loan amount or pricing. Whether you want or need to redisclose is up to you, but IMO, it may be a valid change of circumstance.
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#1935104 - 06/24/14 03:49 PM Re: LPMI - Change of Cirrcumstance? Compliance Audit
Truffle Royale Offline

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If the bank is just doing the switching to accommodate QM, I still don't think it's a valid cc.
But I'm open to be convinced otherwise....

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#1935262 - 06/24/14 07:28 PM Re: LPMI - Change of Cirrcumstance? Truffle Royale
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For the loan in question changing the MI from borrower to lender reduced the amount of the loan by about $4000.00 increased Block 2 - origination fees by $1,384. and decreased Block 3 by $3870. - so it could lead to a pretty sizeable cure if the change in circumstance was not valid. The change was made 9 days after the initial disclosure and signed intent to proceed and was made so the loan would qualify as a QM - what do you think??

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#1935279 - 06/24/14 07:55 PM Re: LPMI - Change of Cirrcumstance? Compliance Audit
#Just Jay Offline
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#Just Jay
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Cheeseheadland
Do you only do QM, and thus this was a denial and counter offer situation? Yes, I think it is valid.

Was this after more discussion with the borrower in finding a more affordable loan option for them? Yes, I think an argument can be made there as well.

Changes this sizable are not made at the bank's whim without input and discussion with the borrower. Sound documentation of the borrower's input and intent should make a case for a valid change of circumstance, IMO.
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#1935342 - 06/24/14 10:18 PM Re: LPMI - Change of Cirrcumstance? #Just Jay
Compliance Audit Offline
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Thank You!

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#1935344 - 06/24/14 10:42 PM Re: LPMI - Change of Cirrcumstance? Compliance Audit
Truffle Royale Offline

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Under the criteria #JJ laid out above, I'd concur.
Remember Dan Persfull's words of advice that the counter offer only becomes a valid CC upon acceptance by the borrower.
And, while I'd like to believe the statement that 'changes this sizable are not made at the bank's whim', I've too often come up against the LO who says 'oh, I'm sure Mr & Mrs will go along with this.' So just make sure your discussion horse stays before the proverbial GFE redisclosure cart.

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#1936925 - 07/01/14 03:36 PM Re: LPMI - Change of Cirrcumstance? Compliance Audit
luvs2trvl Offline
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Texas
We have our products separated by Borrower Paid MI and Lender Paid MI so we treat this as a product change that the borrower requests.

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#1936932 - 07/01/14 03:59 PM Re: LPMI - Change of Cirrcumstance? luvs2trvl
Truffle Royale Offline

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Originally Posted By: luvs2trvl
We have our products separated by Borrower Paid MI and Lender Paid MI so we treat this as a product change that the borrower requests.
And I'll repeat again, this only works if the borrower truly requests it OR if it's a counter-offer that the borrower accepts. You cannot change it internally and just do a redisclosure.

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#1937251 - 07/02/14 02:05 PM Re: LPMI - Change of Cirrcumstance? Compliance Audit
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
You cannot change it internally and just do a redisclosure.


100% agree and I will add that you better have your "qualified" changed circumstance well documented and retain that documentation for a minimum of 3 years. "Verbal" documentation does not fly in these circumstances.

Loan originators must retain documentation of any reason for providing a revised GFE for no less than 3 years after settlement.
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