Thread Starter: Anonymous
Title: Re: TRID permissible purpose?
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I am curious to know what others think of this scenario.
We have implemented a new process surrounding mortgage applications and Loan Estimate delivery. The customer fills out an application on our bank website and after submitting will receive an automatically generated LE based on details in the application. We originate primarily fixed rate loans that are sold to a secondary market investor that charges LLPAs when the loan is a cash-out refinance.
In the particular instance I am writing about, the customer selected a loan purpose of "refinance" when "refinance with cash out" should have been selected. The LE generates and shows $40,000 of cash back, which to me indicates cash-out refinance regardless of what loan purpose box you check. The problem is the LE that automatically generates does not include cash-out LLPAs when refinance is selected, even if the transaction is actually a cash-out.
Lenders are arguing that this is customer error and should be a permissible purpose to revise the LE. Part of me thinks that we are asking too much of our customers to know the difference about how one purpose vs another impacts loan pricing, and ultimately a LE that shows $40,000 cash back but doesn't contain the appropriate cash-out LLPAs is a bank problem that needs to be cured.
Hoping for some thoughts from others on this one. I have a feeling it will be a common issue.
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