[Todd H.]

In reference to new citation under 1026.19(e)(3)(iv) – Comment 5, it mentions when disclosing under good faith that “any disclosures must be based on the best information reasonably available…at the time [revised disclosures] are provided to the consumer.”

It then refers to an example using a rate lock extension fee that reads: For example, if the creditor issues revised disclosures reflecting a new rate lock extension fee for purposes of determining good faith under § 1026.19(e)(3)(i), other charges unrelated to the rate lock extension must be reflected on the revised disclosures based on the best information reasonably available to the creditor at the time the revised disclosures are provided.

With the above background listed, my scenario is this:
If the Loan Estimate was provided on Monday, September 10th. We acquired the purchase contract on Wednesday, September 12th. Within the contract is an escrow deposit, seller credit, home inspection fee, and a pest inspection fee. We received a signed rate lock agreement on Friday, September 14th, which will require a revised disclosure.

My question is:
When compiling the revised disclosure, should I list the escrow deposit, seller credit, and inspection fees since it states in one area that “any disclosures must be based on the best information reasonably available”? While a deposit and seller credit are not charges, inspection fees would be but would be in the variations permitted category.

In the example that it gives in the same section, it alludes to “charges” but in listing all of the items within the contract, it would meet the point of the regulation since it is the best information that we have at that time.

Just wanted to get some thoughts. Thanks in Advance. Todd H.

Topic

[rcooper]

As you mentioned comment (19)(e)(3)(iv)-5 states:
Regardless of whether a creditor may use particular disclosures for purposes of determining good faith under § 1026.19(e)(3)(i) and (ii), except as otherwise provided in § 1026.19(e), any disclosures must be based on the best information reasonably available to the creditor at the time they are provided to the consumer. See § 1026.17(c)(2)(i) and comment 17(c)(2)(i)-1.

Due to this any disclosed information should be updated with the best information available at the time the revised disclosure is provided.

As an aside, keep in mind what the last part of that comment says when dealing with revised charges, which is increases in other charges unrelated to the changed circumstance may not be used for the purposes of determining good faith.

[jholzknecht]

I agree fully with rcooper’s answer. When compiling a new disclosure for the rate lock agreement I would definitely include the information about the escrow deposit, seller credit, home inspection fee, and pest inspection fee. Actually I would provide an informational disclosure that included the escrow deposit, seller credit, home inspection fee, and pest inspection fee even if there were no rate lock agreement.

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