Revised LE question

We have a change in circumstance dated 10/24/2017 due to lower than expected appraisl with a revised LE issued on 11/2/2017. We only have three days to issue the revised LE correct? On the CIC form, lender noted was waiting on revised closing fees from title company and that the customer agreed to lower loan amount on 10/24/2017. How bad of an issue is this?

You won't be able to use that 'waiting on title fees' as a reason for not revising within the 3 days if for some odd reason the title company RAISED their fees for a lower loan amount.

Which begs me to ask...did you actually have raised fees for the lower loan amount?

How bad of an issue is this?

If fees that are affected by the changed circumstance were not increased, none. However it should be used as a training tool for the importance of issuing a revised LE within the allotted time.

If any of those fees were increased then you cannot reset your tolerances for those items and you will have to cure accordingly.

Thanks for the help. Due to lower appraisal, loan amount went down $200 and the fees stayed the same.

In that case there was no need to issue a revised LE and this would serve as a good training tool for not issuing revised LEs where not necessary, especially for a $200 decrease in the loan amount.

I think our Loan Ops staff is playing it very conservatively on anything that changes and want to show that we notified the customer. But a revised LE is only required when Fees increase over the 10% tolerance and you want to reset the tolerances then, correct?

Yes. Unless you have some funky investor requirement to do so.

A revised LE is only REQUIRED when you get a signed rate lock agreement with the borrower.
Papering the borrower with redisclosures for anything that changes is not only not required, it can be adverse to your bank, especially if the tolerances are incorrectly reset.
Most banks only redisclose to capture new fees or increases to fees caused by valid changed circumstances.