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#1723187 - 07/25/12 05:09 PM Good Faith
questioning Offline
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Joined: May 2002
Posts: 195
We have an auditor reviewing a mortgage loan in which the loan amount (and thus the fees) were lowered from the time they applied to closing. There are Good Faiths showing each amount, but only the first one (the higher amount) was signed by the customer. I can't find in the reg. that this is a violation. Is it, and if so, where is this referenced?

Taking it a step further, what if we didn't re-disclose a lower amount/fees at all, is that a violation?

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Lending Compliance
#1723193 - 07/25/12 05:15 PM Re: Good Faith questioning
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,227
Galveston, TX
There was never a requirement to re-issue a GFE in the scenerio you described. Ask the auditor just where the signature line might be on a GFE smile
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#1723196 - 07/25/12 05:17 PM Re: Good Faith questioning
ComplianceNerd Offline
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Joined: Nov 2011
Posts: 378
Texas ...
You have the choice to redisclose the GFE when the fees are lowered. But it's really the TIL that needs to be redisclosed if the APR is changed by 0.125 or more and/or the finance charges are changed by more than $100.00

The only thing it says in the reg about getting the customer to sign is if you are charging them fees prior to consummation of the loan and then you have to have the customers intent to proceed with the loan request. Also all it says is that you need intent to proceed and not an actual signature. (How do you prove that the customer has intent to proceed without a statement or a signature though?) On top of everything else, there's no signature line on a GFE and there's been feedback stating NOT to make a signature line on a GFE.

If there is something in your policy that states otherwise, that might be what the auditor is referencing or if you've had prior prcatice of getting the redisclosed GFEs signed.

I could be wrong on this issue, I don't feel I'm too off on my answer though. I'm willing to see others input as well. smile

Last edited by ETX L Complaince; 07/25/12 05:19 PM.
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#1723213 - 07/25/12 05:42 PM Re: Good Faith questioning
RR Joker Offline
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RR Joker
Joined: Nov 2002
Posts: 20,654
The Swamp
Agree with Randy...no requirement to re-issue a GFE except under a lock-in event.

Furthermore, HUD does not allow modification to the GFE, even for signatures.

Q: May a loan originator alter the GFE by adding signature lines to the GFE?
A: No. However, loan originators may develop practices and procedures to document the consumer‘s acknowledgement of receipt of the GFE. Loan originators may not refuse to provide a GFE based upon a consumer‘s refusal to acknowledge receipt of the GFE. Acknowledgement of receipt of a GFE, by itself, does not constitute an expression of an intention to proceed with the loan covered by the GFE.
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