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#2012906 - 05/08/15 02:49 AM Re: Change in Circumstance after CD issued RVFlyboy
rlcarey Offline
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Galveston, TX
But they already gave a clear "no" in the past webinar. You cannot reissue under §1026.19(e)(4)(ii) as the first sentence of the commentary says you cannot reissue a LE after a Closing Disclosure has been issue whether in the form of a LE or a CloD.

Sorry, I see no grey area here at all. If the CFPB wants to make a direct statement on the issue, then I am all ears.

Until then, I will stick with my interpretation. As John stated, the stakes involved are much too great for me to make any other recommendations to my clients.

Others may feel differently and are of course free to make their own recommendations to their own clients and colleagues.
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TRID - TILA/RESPA Integrated Disclosures Rule
#2012910 - 05/08/15 12:04 PM Re: Change in Circumstance after CD issued RVFlyboy
Jerod Moyer Offline
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Randy, I appreciate your time and thoughts on this subject. Good stuff!
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#2014775 - 05/18/15 08:02 PM Re: Change in Circumstance after CD issued RVFlyboy
terpsfan Offline
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What if it is a borrower requested change such as a request for more money? I know that will delay closing but what if the closing disclosure is already issued. Surely you are not bound by that disclosure for tolerance purposes.

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#2014785 - 05/18/15 08:20 PM Re: Change in Circumstance after CD issued RVFlyboy
rlcarey Offline
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Galveston, TX
Personally, if that request impacted fee that I did not want to eat, I would tell the customer that such a request after the closing disclosure is issued is basically a new application.

Cancel the old loan, issue a new LE and start the seven day wait process.

If you can point to a provision in the law that let's you re-set the tolerance levels under such a circumstance - I am all ears.

This is two way street - consumers can't just change their minds at the last minute know and think things are going to happen immediately.
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#2015361 - 05/21/15 02:16 AM Re: Change in Circumstance after CD issued RVFlyboy
Jerod Moyer Offline
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Update (nothing new) - Just wanted to chime in and let everyone know that to date Banker's Compliance Consulting has not changed it's stance on this (see prior posts), opposite of Randy's. I do see his points and appreciate his take. However, between the interpretation we've laid out and discussions with the CFPB and others that have also talked with the CFPB, we remain in the camp that you can utilize a revised CloD to reset tolerances via CofC that occurs in the limited window outlined in our previous posts within this thread. That said, let's see if CFPB dares to take this head on during the 5/26/15 webinar. There, I dared them, let's see if they take it!
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#2015362 - 05/21/15 03:29 AM Re: Change in Circumstance after CD issued RVFlyboy
rlcarey Offline
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Not to beat a dead horse, but the CFPB already officially opined in this in the August 26 seminar. I highly doubt that they are going to address it again. They said:

"However, § 1026.19(e)(4)(ii) provides an additional timing restriction to revise Loan Estimates. It kicks in when a transaction approaches consummation. This provision was designed to address a historical practice commonly called the “Magic GFE” and prevent creditors from issuing revised Loan Estimates after they have provided the Closing Disclosure. In our view, this would better ensure finality of the Closing Disclosure that the consumer receives prior to consummation.

To touch on the regulatory provisions: specifically, § 1026.19(e)(4)(ii) says that a creditor shall not provide a revised Loan Estimate on or after the date it provides the Closing Disclosure and the consumer must receive the revised Loan Estimate no later than four business days prior to consummation. The consequence of this is because the Closing Disclosure must be received no later than three business days prior to consummation, this is a way of ensuring that a consumer will not receive a revised Loan Estimate after the consumer receives the Closing Disclosure.

The Rule does recognize that changed circumstances or other events may occur at times where the creditor receives information sufficient to establish a ground for redisclosure at a point in time that is too late to provide a revised Loan Estimate within these restrictions. The Bureau, in crafting the Final Rule, acknowledged this possibility and provided some flexibility to creditors through comment § 1026.19(e)(4)(ii)-1 in the event that there are less than four business days between the time the revised version of the Loan Estimate would be required to be provided under § 1026.19(e)(4)(i) and consummation. In this limited circumstance, comment § 1026.19(e)(4)(ii)-1 allows creditors to comply with the timing requirements of § 1026.19(e)(4), in other words to redisclose, if the revised disclosures are reflected on the Closing Disclosure, or as the Rule says, the disclosures required by § 1026.19(f)(1)(i).

Therefore, in circumstances where there are less than four business days in between the time the revised disclosures would be required to be provided, that’s again generally going to be within three business days of receiving information sufficient to establish, then the Closing Disclosure may be used to redisclose any estimates that increase due to a triggering event and some examples are laid out in the commentary.

In tying back to the initial question, the question that Dania teed up, the Rule does not provide any other means for a Closing Disclosure to be used to redisclose and reset applicable tolerance levels in other circumstances, including when the Closing Disclosure is provided earlier than is required to under the rules unless, somehow, that event would fit within this window as described in that comment."
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#2015517 - 05/21/15 06:43 PM Re: Change in Circumstance after CD issued RVFlyboy
RR Joker Offline
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I am in Randy's court on this one. They clearly require that any changes in that space between LE and CloD must go on the CloD so you don't confuse someone with a new LE and CloD all right there together.

However, it appears the door (and it looks like my software freezes at this point) closes for change at that point. Most likely for the exact reason of the "Magic GFE". At that point (issuing a CloD) you should be confident in your numbers. There should not be any critical surprises at that point.

So, to me, the only reason for a 'drop-dead' on issuing an LE is to make any final last minute changes to the CloD once, and then you are done. Any changes after that go into the comparison bucket back to initial CloD.
Last edited by RR Joker; 05/21/15 06:43 PM. Reason: CD - CloD
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#2015633 - 05/22/15 02:20 AM Re: Change in Circumstance after CD issued RVFlyboy
Truffle Royale Offline

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I just keep shuddering at the thought of the LO who's going to call me freaking out because the borrower walked in to closing and announced they decided they want more money and why can't we accommodate them if TRID was written for the benefit of the borrower???!!!!

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#2015637 - 05/22/15 03:03 AM Re: Change in Circumstance after CD issued RVFlyboy
rlcarey Offline
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Galveston, TX
Because just like with the banks, the consumer needs to take equal responsibility when entering into probably one of the major financial transactions in their lives. You don't spend weeks negotiating a contract and then at the last minute think you can change your mind and not have it cause delays. It comes down to if they want to change their mind after the CloD is issued, then depending on the circumstances, they may have wait to seven days for their loan because of their late decision.

They can take it or leave it.
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#2015642 - 05/22/15 03:57 AM Re: Change in Circumstance after CD issued RVFlyboy
Kathleen O. Blanchard Offline

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Even the publications for realtors are discussing the need to counsel customers (buyers AND sellers) from the outset that there is a point after which no changes can be made or the deal will not close in the time frame desired. Set expectations early, train staff.
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#2015647 - 05/22/15 12:27 PM Re: Change in Circumstance after CD issued Truffle Royale
RR Joker Offline
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Originally Posted By Truffle Royale
I just keep shuddering at the thought of the LO who's going to call me freaking out because the borrower walked in to closing and announced they decided they want more money and why can't we accommodate them if TRID was written for the benefit of the borrower???!!!!


If they did that to me at the closing, I'd tell them to go jump in a dang lake!
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#2015679 - 05/22/15 02:27 PM Re: Change in Circumstance after CD issued rlcarey
MBTCompliance Offline
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Originally Posted By rlcarey


In tying back to the initial question, the question that Dania teed up, the Rule does not provide any other means for a Closing Disclosure to be used to redisclose and reset applicable tolerance levels in other circumstances, including when the Closing Disclosure is provided earlier than is required to under the rules unless, somehow, that event would fit within this window as described in that comment."



If this is indeed the stance taken, what would be the lender's course of action if fees increased in excess of tolerance on Day 2 or Day 1 prior to closing? Should the lender issue a revised CD with a lender credit to rebate for the amount in excess of the tolerance?

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#2015683 - 05/22/15 02:53 PM Re: Change in Circumstance after CD issued RVFlyboy
rlcarey Offline
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rlcarey
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Galveston, TX
You would re-issue the CloD at loan closing with all final charges shown correctly, provide the borrower the appropriate cure and disclose the cure on the CloD as outlined in the regulation.
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#2015684 - 05/22/15 02:54 PM Re: Change in Circumstance after CD issued RVFlyboy
John Burnett Offline
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Ultimately, the lender credit amount will reflect the increases in excess of tolerance limits. But you still have to disclose the amount of the excess increases. The math takes place elsewhere and arrives at the amount you're going to have to refund. It's noted in the explanation column of the Calculating Cash to Close table and in the Lender Credit explanation in section J.

You can't just increase the lender credit and cover up the increases in excess of limits.
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#2015686 - 05/22/15 02:56 PM Re: Change in Circumstance after CD issued RVFlyboy
MBTCompliance Offline
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Thanks for the clarification!

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#2033333 - 08/12/15 06:54 PM Re: Change in Circumstance after CD issued RVFlyboy
Serendipity Offline
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Does anyone have any plans as to what they will be doing if the borrower makes a change at the closing table that affect fees?

Just wondering if there is a certain amount or threshold that lender's are willing to eat in some of these situations in order to close on time. I think expecting that no one will ever have a last minute change is not realistic.

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#2033340 - 08/12/15 07:01 PM Re: Change in Circumstance after CD issued RVFlyboy
John Burnett Offline
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The players in the settlement game -- lenders, real estate agents, title companies, attorneys, need to set realistic expectations for the borrower, buyer and seller. The new reality of things locked down once the CloD is issued is what they all need to aim for.

Sure, lenders may have to eat some minor changes, but significant changes shouldn't be allowed, IMHO.
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#2033342 - 08/12/15 07:04 PM Re: Change in Circumstance after CD issued RVFlyboy
Serendipity Offline
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Completely agree, John. I'm just wondering if some are expecting/planning to pay in order to stay competitive.

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#2036556 - 08/31/15 09:11 PM Re: Change in Circumstance after CD issued RVFlyboy
cindylou66 Offline
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cindylou66
Joined: Dec 2003
Posts: 25
Alabama
So, Jerod and Randy...I'm interested in hearing if any opinions changed after the last webinar?? Do you both still stick to your opinions?
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#2036573 - 09/01/15 01:49 AM Re: Change in Circumstance after CD issued RVFlyboy
rlcarey Offline
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Galveston, TX
I do. What last webinar?
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#2036610 - 09/01/15 02:34 PM Re: Change in Circumstance after CD issued RVFlyboy
Jerod Moyer Offline
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Jerod Moyer
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Posts: 667
Sioux Falls, SD
Our (Banker's Compliance Consulting) take remains the same (review the thread). We did recently submit the question to the CFPB; however, they sidestepped providing a direct answer:

Post #2029818:
https://www.BankersOnline.com/forum/ubbthreads.php/topics/2029818

Sidetone: We've always received a phone call to explain the answer to a question submitted to the CFPB. Interestingly enough, with this question (revised CloD tolerance reset) we were provided a written response without a phone call.
Last edited by John Burnett; 09/01/15 03:16 PM.
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#2152665 - 11/08/17 03:37 PM Re: Change in Circumstance after CD issued RVFlyboy
MScarn6942 Offline
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Land Lacking in Lakes, IL
What happens if you have a valid CoC the day the CD is supposed to be issued? Can you use your preliminary CD to reset tolerances?
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#2152669 - 11/08/17 03:46 PM Re: Change in Circumstance after CD issued RVFlyboy
rlcarey Offline
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1026.19(e)(4)(ii)

Yes
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#2153161 - 11/10/17 11:22 PM Re: Change in Circumstance after CD issued RVFlyboy
MScarn6942 Offline
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Land Lacking in Lakes, IL
Thank you!!
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