Scenario: After the initial disclosure is provided to the customer, an error is discovered. My understanding is that we cannot redisclose just to correct the error. If that is the case, what if the loan amount changes...by any amount? The change in loan amount would be a changed circumstance, which would require a revised disclosure...the revised disclosure could then reflect the correction of the original error? Provided that the originator could get the borrower to agree to a changed loan amount, is that a way out, so to speak, to correct the error? There is quite likely something wrong with this line of thinking, but I just wanted to express this idea in order to explore the technicalities, consequences, etc. Thank you for your time and input.

In short, no. If you forgot something or made an error you won't find a valid changed circumstance in the regulation that will allow you fix the error. Sorry.

No, the only items that can be revised are those that change due to the changed circumstance, for example a fee that is tied to a percent of the loan amount in your example. Anything else stays as it is, including fees entered erroneously.

Thank you...now this may be a stretch, but what if the original application were withdrawn, and a new one was entered instead? Granted, the withdrawn application would have to be documented, and I am sure that the reasons for withdrawal would be scrutinized...probably there are not any "loopholes" so to speak...I know that I am not the only one who feels that it is ridiculous to have no way to correct errors that are bound to happen from time to time...thanks for listening to my thoughts which could also be construed to be ridiculous as well!

I personally would be concerned if it could be construed that the creditor was encouraging applicants to withdraw so that the creditor could correct errors.

I started out in a banking world in which a price quoted to a customer was given, even if given in error. The bank put it out there, presumably by someone authorized to represent the bank in that type of transaction. If we said it, we did it.

This type of thing is a good reason for automation and centralization, to limit potential errors.

In addition to Jerod's and Kathleen's comments I would add that the solutions you have proposed are IMO pushing you into UDAAP territory and a possible appointment with the DOJ.

Mike,

I think you or your management is wasting time looking for an "out" to save the bank's bacon when it makes a mistake. Mistakes will occur, and the institutions that make them will bear the consequences. It is part of the business, and is better attacked from a training and controls perspective. And when you identify individuals who repeatedly screw up, you avoid further mistakes by retraining or making staffing changes.

I'd also like to add that with the initial RESPA changes in 2010, it was clearly stated then that bank errors were not considered a valid change of circumstance to justify reissuing a GFE to correct bank errors, nor was a reissued GFE grounds for going back to correct an error unrelated to a valid changed circumstance. This is not a 'new' rule under TRID disclosures and processes, this has been the rule for almost the last six years now.

New eyeballs looking at these rules, and the industry still has problems with the 2010 RESPA rules. But you are right, Just Jay. I think the difference, though, is that the Bureau has done a better job laying out most of the rules than HUD ever did, even though I feel there are significant issues that remain unclear.

Thank you to everyone. This is an area with which I have not had to work before, and one reason why I wanted to pose these questions, as far fetched as they may sound, is to be able to show that there is no "getting around" the consequences of making an error...so I am very appreciative of all the input.