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We are seeking clarification on the timing requirements for delivery of the ARM program disclosure and the CHARM. In our most recent review we found that, regardless of how the application is taken, these disclosures are being sent along with other early disclosures within 3 business days of application (including a 1003 for the borrower to sign). Our question is specifically related to applications taken online. We have an online application process by which potential borrowers can upload certain information to “apply” for a loan with us. The system takes enough information to consider the data a completed application, and our timing for sending early disclosures begins at that time. This application then goes to a MLO to start the loan process. On the online application, the borrower is not given the option to apply for a specific loan product (i.e. fixed rate or adjustable). This is determined after the lender and the borrower communicate about the borrower’s needs after the online application has been received. There is no access to program disclosures on the bank’s online application form. In our review we cited that the disclosures are not provided timely because the disclosures are not provided in electronic form at the time the application. The pushback is that the applicant is simply applying for a mortgage when they apply online, not for a specific product; therefore it is unknown at the time of online application as to the program in which the borrower has interest, and that the borrower is provided the disclosures at the time the initial 1003 is sent for the borrower to sign (up to three days after application). Would this be considered a violation of the timing requirements for these disclosures?
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