When to NOT disclose a revised Loan Estimate.
It's important to understand not only what the rules require, but what they do not require.
(Common e-mail example)
Dear Ben,
We're increasing/changing XYZ on the Smith loan. Do we need to issue a revised Loan Estimate?
Love, Client.
More often than not, the answer is No!
General Rule
So if you're asking me whether a revised LE is necessary, ask yourself this first: Are we increasing any specific fee over any specific tolerance? If not, then no revised LE is required. Just make sure the Closing Disclosure is updated with the new information.
Informational Purposes
Despite the General Rule, you are always allowed to disclose a revised Loan Estimate voluntarily for "informational" purposes. Just saying that you are only required to do so when you are increasing fees above an applicable tolerance.
If you're not sure, issuing a revised LE is often the conservative approach, but triggering a new LE for every little change makes loan files difficult to review, adds administrative burden, and will hurt borrowers through information overload
Specific Examples
Let's try a few examples:
Increasing Pre-Paid Interest. Pre-Paid interest is not a fee subject to any tolerance. If this fee happens to increase, a revised Loan Estimate is unnecessary because even if the amount increases, it will still be within good faith tolerance.
Increasing/Decreasing Loan Amount. The loan amount itself is not subject to any tolerance. Therefore increasing or decreasing this does not alone require a revised LE. Watch out, however, because this will often likely affect other fees that will require a revised LE. For example, if the loan amount increases and causes title insurance to increase, that will require a revised LE (title insurance is either 0% or 10%). But if the loan amount decreases, and title insurance only decreases, that will not require a revise LE because no fee increased above tolerance.
Home Inspection Added. Assuming this is an Optional fee with the particular loan involved, this would not require a revised LE because we are not increasing the fee above tolerance.
Homestead Preparation Added. Well, this is a trick question. Homestead prep. is an optional fee, meaning adding this alone would not require a revised LE. But if adding this fee also meant adding a recording fee, this might require a revised LE. Any recording fee, even if associated with an optional service like Homestead, will be subject to 10% tolerance. If adding this exceeds 10% tolerance, then a revised LE will be necessary.
In Other News:
Customer service rule of thumb - do the opposite of whatever Comcast does. You heard Comcast is now for sale on Amazon. Well did you see the online customer reviews that this is now generating? Hundreds of customer reviews ... almost 100% give them a 1 star rating. And the reviews themselves are horribly hilarious, for example:
"Having Comcast has been the worst experience of my life. You are better off with anything else: FiOs, Google Fiber, Carrier Pigeon, anything."
"If you told me there was a Comcast competitor in my area that would require them in their contract to come to my door every day and insult my family and my mother after punching me in the face and genital I would sign up for them right now."
And actually - the only 5-Star rating I could find just said: "5 stars for being soulless corporate demons. Comcast feeds on the weak."
IBM is one step closer to a supercomputer that will rival the human brain ...
One of the top originators in the country just cost GR $25 million. A jury agreed that he stole proprietary customer information from his former employer, and that GR benefited. Yikes!
Do you like spending time at the beach? Seems strange that bodies of moving water (a rippling brook, ocean waves) are universally calming. Including people who grew up landlocked. Well there may be some science behind this.
Have you heard of negative ions? Here's a blog from Australian researchers on the topic. The basic point is that negatives ions are an "invisible healer" - triggering a great number of natural health and mood boosters. They also clear the air from allergens and toxins. Rural air has more negative ions than urban areas. And polluted air has very few negative ions. But the movement of water causes a great excess of negative ions - such as a waterfall or waves crashing on shore. They act like air purifiers.
"You cannot run with the hare and hunt with the hounds."
- Proverb
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