I am starting to see a lot of files that have re-disclosures for a changed circumstance when in fact there was no change.  It seems that many of you are using a changed circumstance because it is the only way that you have access to certain fields.  Specifically, when a loan is locked or extended, you need to update the GFE date and add NA to block 4 of the important dates section. 

What I am finding is that processors are the ones who are printing re-disclosures when a loan is locked or extended instead of the loan officer.  This is the problem.  Under the SAFE Act, only licensed mortgage loan originators are permitted to communicate with the customer either orally or in written form when it has anything at all to do with the rate.  Encompass is programed with this in mind.

Let me refresh everyone on the changed circumstance.

First, not everything is a changed circumstance.  For example; locking a loan is not a changed circumstance; adding a property address after issuing a GFE with TBD address is not a changed circumstance.  The new RESPA regulation defines a changed circumstance as follows:

“Changed circumstances” is now defined in § 3500.2 as: (1) Acts of God, war, disaster, or other emergency; (2) Information particular to the borrower or transaction that was relied on in providing the GFE and that changes or is found to be inaccurate after the GFE has been provided, which information may include information about the credit quality of the borrower, the amount of the loan, the estimated value of the property, or any other information that was used in providing the GFE; (3) New information particular to the borrower or transaction that was not relied on in providing the GFE; or (4) Other circumstances that are particular to the borrower or transaction, including boundary disputes, the need for flood insurance, or environmental problems.

None of the information collected by the loan originator prior to issuing the GFE may later become the basis for a “changed circumstance” upon which a loan originator may offer a revised GFE, unless the loan originator can demonstrate that there was a change in the particular information or that it was inaccurate, or that the loan originator did not rely on that particular information in issuing the GFE. In addition, the loan originator is presumed to have relied on the borrower‘s name, the borrower‘s monthly income, the property address, an estimate of the value of the property, the mortgage loan amount sought, and any information contained in any credit report obtained by the loan originator before providing the GFE. The loan originator cannot base a revision of the GFE on this information, unless it changed or is later found to be inaccurate.

The bottom line is that loan originators are expected to get it right the first time and there are not many acceptable reasons to issue a revised GFE.  If there is an acceptable changed circumstance, $the loan originator must document the reason for the change$ and provide it to underwriting with the file.  If a new GFE is issued do to an acceptable changed circumstance, only the items affected by the changed circumstance may change; everything else must remain the same.