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Lending / The Ticker

It's all in good faith — until August 2015

Give us your feedback about the general accuracy requirement for Loan Estimate

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This article is part of HW PartnerDirect™. What is this?

CFPB RESPA/TILA Rule Reference: 7.1, page 33, CFPB Detailed Summary of the rule 

How accurate must the information provided to the consumer be in order to be considered “good faith”? Before the Loan Estimate can be delivered to the consumer three days after the application has been submitted, creditors must do their due diligence. They are responsible for providing a good faith estimate by making sure the figures are consistent with the best information reasonably available at the time they are disclosed.

How the CFPB defines good faith:

  • Calculate the difference between the original estimate charges provided in the Loan Estimate and the actual charges paid by or imposed on the consumer in the Closing Disclosure.
  • If the creditor charges the consumer less than the amount disclosed on the Loan Estimate, it is considered good faith.

As we all know by now, the Loan Estimate form is replacing the current GFE (good faith estimate) form. In doing so, the Loan Estimate form is going to have mainly the same information, but presented in a different format. The Loan Estimate and the Closing Disclosure forms, which are almost identical in design, offer a direct one-to-one visual comparison for the consumer. These changes in format, delivery, and direct comparison to the Closing Disclosure bring a few questions to mind, and that’s what we’re asking you today.

1)     Do you see the variances between the Loan Estimate and the Closing Disclosure making any difference in the way you operate today?

2)     Have you had any discussion with your LOS provider about how the variances between the Loan Estimate and Closing Disclosure will be tracked and reported?

3)     What are the biggest enhancements to your processes and technology solutions that will be necessary?

4)     What is your method and plan for delivering the Loan Estimate to the consumer to meet the three-day window from day of application?

Pavaso offers digital delivery of the documents, and ensures delivery within the three-day window. It‘ll give the consumer more time to look over the information instead of waiting for the documents in the mail. With an efficient and secure digital service, it’s one more thing that adds up to a more informed consumer – the whole point of the TILA-RESPA Integrated Disclosure.

For more information about the impacts of TILA-RESPA on your business, and how technology solutions can help you overcome them, visit www.TILARESPA.com to view a growing knowledge base of information and forums where you can ask questions.

All information and views expressed or implied are provided without warranty and are only the opinion of Pavaso, Inc. Each participant should seek legal representation for legal interpretation of the ruling and the CFPB directly for final instruction and interpretation. The final rule can be found here.

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