RESPA Roundup-Loan originator fails to issue GFE

Compliance > Regulation X - RESPA > RESPA Roundups
 
 
Loan originator fails to issue GFEIf a loan originator fails to deliver a GFE in clear violation of 24 CFR § 3500.7(a) and (b), the loan originator will have significant potential tolerance violations at settlement. See RESPA § 3500.7(e).

Where the loan originator has not provided the consumer with a GFE, when completing the HUD-1 comparison chart the loan originator’s instructions to the settlement agent must indicate that the settlement agent must fill in the GFE columns with $0 and the HUD-1 columns with the actual charges from Page 2 of the HUD-1. If this results in one or more tolerance violations, the loan originator may cure the tolerance violation(s) by reimbursing the borrower the amount by which the tolerance was exceeded at settlement or within 30 calendar days after settlement.
As with other compliance areas, loan originators should adopt policies and procedures to ensure that GFEs are delivered timely, in accordance with the requirements of RESPA.

This can be found in RESPA Roundup, April 2011, which can be found at:
http://portal.hud.gov/hudportal/documents/huddoc?id=RESPARoundup-April2011.pdf

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