Effective immediately, the attached 2 forms are required as indicated below:

 

GFE – Receipt:

·         Required on all files.  This is the form the borrower will use to acknowledge receipt of the GFE provided by the Loan Officer.  This form must be submitted with the GFE and the rest of the loan file to setup.  Form must be filled out completely.  Variations of this form may be accepted, provided the subject matter of the originator provided form contains all relevant information

 

GFE – Change in Circumstance Acknowledgement:

·         Required when the GFE is redisclosed to the borrower due to an acceptable “change in circumstance”, as described by RESPA (see below).  Form must be filled out completely.

 

Changed Circumstances include:

·         Acts of God

·         Information particular to the borrower or transaction that was relied on in providing the GFE and that changes or is found to be inaccurate after the GFE has been provided, which information may include information about the credit quality of the borrower, the amount of the loan, the estimated value of the property, or any other information that was used in providing the GFE.

·         New information particular to the borrower or transaction that was not relied on in providing the GFE.

·         Other circumstances that are particular to the borrower or transaction, including boundary disputes, the need for flood insurance, or environmental problems.

·         None of the information collected by the loan originator prior to issuing the GFE may later become the basis for a changed circumstance upon which a loan originator may offer a revised GFE, unless the loan originator can demonstrate that there was a change in the particular information or that it was inaccurate, or that the loan originator did not rely on the information issuing the GFE.

 

A Changed Circumstance does NOT include:

·         Changing the borrower’s name

·         Changing the borrower’s monthly income

·         Changing the subject property address

·         Changing the estimated value of the property

·         Changing the mortgage loan amount * (see below for specific example)

·         Any information in the credit report generated prior to issuance of the GFE, unless the information has changed or found to be inaccurate

·         Changed in Market price (yield)

 

Here are various examples regarding issuance of a revised GFE:

 

·         Circumstances affecting settlement costs  - If the changed circumstance results in an increase in settlement costs at closing and exceeds the tolerances, a revised GFE can be given within 3 business days of receiving the information sufficient to establish the changed circumstance.  If a revised GFE is given, the increase in charges must be limited to only those charges where the changed circumstance resulted in the higher charge.

·         Circumstances affecting the loan – If there is a change to the borrower’s eligibility for the specific loan terms identified in the original GFE, the originator may provide a revised GFE to the borrower.  However, it must be issued within 3 business days of receiving the information sufficient to establish the changed circumstance.

·         * Borrower-requested changes – If a borrower requested a change resulting in a change to the terms of the loan or the settlement charges (such as a change in mortgage loan amount), an originator may provide a revised GFE within 3 business days of the borrower’s request.  If the GFE is not provided within 3 days of the change request

·         Changes and terms dependent upon interest rate – If the interest rate is not locked or a lock has expired, the charge or credit for the interest rate, the adjusted origination charges, per diem interest and loan terms related to the interest rate may change.  Once the borrower does lock (or re-lock) the rate, a new GFE must be provided reflecting the rate dependent charges and terms.  All other terms and charges not affected by the rate must remain the same.  ** If a revised GFE is not provided to the borrower within 3 days of the loan being locked, then the fees on the initial GFE may not be changed. 

·         New Home Purchases – If the loan is for a new home purchase and the settlement is expected to be beyond 60 calendar days from the GFE issuance, the originator may provide the GFE with a separate disclosure (clear and conspicuous) stating that any time up until the 60 calendar days before the closing, a revised GFE may be issued.  If this is not done, the originator cannot issue a revised GFE.

 

 

We will allow some leeway, as this is a new announcement.  However, when a file is received in Setup without the required Acknowledgement of Receipt (or acceptable broker variation thereof), Setup will respond to the Loan Originator that it must be included on all submissions henceforth and will include a copy of this email

 

 

Thank you!

J. Whitney Barth

VP Operations

Gateway Mortgage Group LLC

972.908.3390 x101 p

918.392.8336 f

02/19/2010