Information Errors v. Computation Errors

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Question:

I have a question regarding loans that we purchase and service: Our Lending Compliance person was reviewing loans purchased and noticed that a loan was missing a GFE. From a compliance standpoint, are we required to follow-up to obtain the GFE and any other missing documentation? How does missing documentation on purchased loans sit with the examiners?

Answer:

Here's the big picture:

Information errors cannot be corrected after the fact. If I forget to give a disclosure and I have already closed the loan, I can't back up the clock and give a disclosure that should have been given prior to closing.

Computation errors can be corrected. If the payment schedule, APR, Finance charge, etc. is not correct, you should redisclose and provide reimbursement, if necessary.

I wouldn't fret the failure to give one GFE. It can't be fixed now. Point out the error, provide training and move on.

First published on BankersOnline.com 6/17/02