We want to thank everyone who attended our webinar “Common Compliance Findings and How to Prevent Them.” As promised, below you will find answers to the questions asked during the webinar. You can also download the slides from the webinar.

We look forward to serving all your compliance needs. Feel free to contact us with any requests or questions. Click an icon under “Contact Us” at the top right.

Question 1 – If we purchased a QC manual from MCA, are updates available for new laws?

• Answer – Yes, MCA does offer updates to your Quality Control Plan. You can contact us at your convenience so that we can discuss the specifics of your plan.

Question 2 – Do you have a suggestion on how much time before closing we should pull the FNMA comparison report?

• Answer – If you are referring to the re-pulling of credit to check for undisclosed liabilities, we suggest you pull this as close to closing as possible.

Question 3 – What is an example of proof of receipt?

• Answer – An example of proof of receipt would be a confirmation email, delivery receipt, fax confirmation, etc. (See slide 32)

Question 4 – How do you address a GFE issued as a lender and a subsequent submission as a broker?  One will have YSP and one will not, and investors fees are different.  Can you give guidance on this when we are submitting to 2 different avenues?

• Answer – Once you provide the GFE, you cannot change the amount in block 1. This includes your investor fees. However, when you lock the loan, you will then be required to state the credit (YSP) to the borrower.

Question 5 – If the origination fee on the initial good faith estimate is less than the actual origination charge on the final HUD, is any corrective action required?

• Answer – No corrective action is needed. However, some investors will require your most recently disclosed GFE figures match the final figures on your HUD1.

Question 6 – Are we required to provide evidence that the disclosures were provided to the borrowers within 3 days of the application date and/or the disclosures are required to be signed and dated within 3 days of the application date?

• Answer – Yes, you are required to provide evidence you sent disclosures within three days of application. Borrowers are not required to sign the initial disclosures. However, some states do require their disclosures be signed.

Question 7 – Is redisclosure of TILA required if it increases .125%? We are interpreting if this increases or decreases.

• Answer – TILA does state you need to redisclose if the APR increases or decreases by more than .125%

Question 8 – Do you have a list of what is considered “prepaid finance charge”? I am finding a great disparity of what is considered a PPF.

• Answer – We recommend you visit Doc Magic’s site for their Fees & Charges List Matrix.

Question 9 – When a loan goes from a “float” to a lock and nothing else will change, is the GFE required to be redisclosed?

• Answer – Yes, you will need to redisclose and update the important dates section on the GFE.

Question 10 – What is considered an early default, and if we do not service, how would we know?

• Answer – Early Payment Default (EPD) is defined as 60 days late in the first 6 months by FHA and Fannie Mae defines EPD as 90 days past due in the past 24 months. For FHA, you can get this info in FHA Connection. For Fannie Mae you will need to be the servicer for this info.

Question 11 – How do you determine the application date while auditing to know that the initial disclosures were provided within 3 business days?

• Answer – We generally use the earliest date located on the application. Generally the day the LO signed the application.

Question 12 – Must we issue a new TIL to customer within 3 days of discovering a change of interest rate or is it okay if mailed 6 days before closing?

• Answer – A borrower must receive the new TIL 3 days prior to closing. If you mail the redisclosed TIL, you can close on the 7th day after mailing.

Question 13 – If you are a wholesale lender, does the 7 days start when you get the application or when the broker took the initial application?

• Answer – According to TILA, a broker cannot issue a TIL (unless table funded). The 7 day waiting period does not start until the lender issues the initial TIL.

Question 14 – Does the 10 business days include Saturdays? I’ve heard yes and no.

• Answer – Yes, you can count Saturday as a business day. (See slide 33)

Question 15 – What is a best practice correction, if a GFE does not have the important dates filled in correctly?  Is it okay to send a revised one to the borrower and put a processor cert explaining why in the file?

• Answer – Yes. You are required to redisclose the GFE if there are changes to the important dates. Your Changed Circumstances form should state the reason for the change.

Question 16 – Do we need to include the TIL verbiage on all Truth in Lending disclosures? We have heard it is not required on the final TIL.

• Answer – When reviewing the file for an audit, we follow the instructions per MDIA in that we look to see the verbiage has been included on the initial and any subsequent TIL disclosures, as well as the final TIL. What you are referring to is that some lenders are allowing the omission of the verbiage if the final TIL is within .125% tolerance of initial TIL. If the final is over the .125% tolerance, technically it is a re-disclosure of the TIL and is required to be provided to your borrower within 3 business days of closing. You will then have three disclosures, the first two which will be required to have the verbiage, and the Final, which your lender may not require the verbiage to be printed on.

Question 17 – What can I do to remedy findings in my QC audit report?

• Answer – We suggest you review all the findings you receive in your Quality Control report. If you find that the issue was incorrect, copy the documents and attach them to your Quality Control report and make note of the corrections.

(Mortgage Compliance Advisors, LLC (MCA) makes reasonable efforts to ensure the accuracy of the answers. MCA makes no express or implied warranty of any kind respecting the information presented and assumes no responsibility for errors or omissions. This online chat is not legal advice and should not be used as a substitute for proper professional or legal advice.)

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