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In the new TRID world what are the thoughts around a LE that is issued a couple of days late and the paying of fees.
In the old GFE world I think HUD had once said that if you didn’t issue the GFE within the 3 days that was the same as not issuing one at all and all the tolerances would be in place (so the bank paid the fees). So in the TRID world does this thought continue? Or is it simply a violation and you can still use the LE fees disclosed for comparison for any tolerance cures?
Of course I ask this as a completely hypothetical question!
There isn’t anything in the regulation or commentary or preamble that discusses this and, as far as I know, we haven’t heard any comments on it from the CFPB. As a result, it doesn’t seem there is anything from the regulators that indicates you must or should treat all fees as 0% tolerance. However, you also want to avoid further issues with the regulators (UDAAP) and it might be best to absorb the fees – evaluate the circumstances and all potential corrective actions. Most importantly, ensure you have processes in place to avoid this all together.
I agree fully with Robin’s reply and want to elaborate on one point. The probability of an UDAAP violation increases significantly if you fail to deliver a timely disclosure and costs have risen by the time the disclosure is delivered. The increased cost would be an easily identified damage resulting from the violation. At a minimum we would encourage you to absorb the increased costs resulting from the delayed disclosure.
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