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CFPB RESPA/TILA Rule Reference: 6.9, page 31-32, CFPB detailed summary of the rule
As we’ve discussed in previous posts, the TILA-RESPA Integrated Disclosure rule has guidelines regarding what information is required in order to provide the consumer with a Loan Estimate. But what happens if you have only part of the information and not all of it?
According to TILA-RESPA, the lender is required to act in good faith and exercise due diligence to try to obtain that information. If that is not possible, then the lender should make estimates, and designate them as such on the Loan Estimate.
So what constitutes a “good-faith effort”?
- At a minimum, you must utilize generally accepted calculation tools
— Need not invest in the most sophisticated computer programs to complete calculations
- You can rely on other parties to provide quotes
— Insurance companies, realtors for taxes or fees
As long as a good-faith effort was made to complete the Loan Estimate, then you may provide it to the consumer, knowing that more precise information would be available by the point of consummation. The lender must be sure to disclose that specific values were estimates to alert the consumer that the values may change in the future, and know that it is possible new disclosures may be required.
For more information on the impact to the industry and technology solutions that can help your business be compliant on August 1, 2015, visit the TILA-RESPA Knowledge Center.
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.