How to Correct a GFE

Question:

While performing a recent RESPA audit we came across several GFEs that had dates or amounts crossed out. For example, the date in line 2 of the important dates did not disclose 10 business days. The Loan Officer crossed out wrong date and hand wrote correct date. The corrections were then initialed by the borrower. Since making a data entry error or other mistake doesn't qualify for a changed circumstance, this was a way for the Loan Officer to correct the GFE. Is this an acceptable way to correct a GFE? I was under the impression that no altering of any kind should be done.

Answer:

If the loan officer did this when presenting the GFE to the applicant (since the changes were initialed by the borrower, I wonder if this is how it occurred), then there's no problem with this. If the loan officer did this after the initial GFE was given to the applicant, you're right this isn't a changed circumstance and this isn't the proper way to correct errors.

If the only thing that changed are the dates and loan information on page 1, then it's a minor issue. If fees were changed on page 2, then this is not proper or allowed.

You're right that HUD prohibits alterations to the GFE. However, I don't believe making a change to a date or info on page 1 is the type of alteration HUD was referring to.

First published on BankersOnline.com 2/13/12