- Business Rules
Can you talk about the use of estimates on a loan estimate? What if a lender has made a good faith effort to obtain a fee, but can't obtain it? How do we indicate the amount reflected on the Loan Estimate is an estimate?The disclosures are required to reflect the terms of the legal obligation between the parties, and if any information necessary for an accurate disclosure is unknown to the creditor the creditor shall make the disclosure in good faith based on the best information reasonably available to the creditor. Information is unknown if it is not reasonably available to the creditor at the time the disclosures are made. The "reasonably available" standard requires that the creditor, acting in good faith, exercise due diligence in obtaining information. For example, the creditor must at a minimum utilize generally accepted calculation tools, but need not invest in the most sophisticated computer program to make a particular type of calculation. The creditor normally may rely on the representations of other parties in obtaining information. For example, the creditor might look to the consumer for the time of consummation, to insurance companies for the cost of insurance, or to realtors for taxes and escrow fees. The creditor may utilize estimates in making disclosures even though the creditor knows that more precise information will be available by the point of consummation.
The use of the Loan Estimate satisfies the requirement that the disclosure state clearly that the disclosure is an estimate.
Citation(s): Commentary ¶17(c)(2)(i)-1 & -2 and Commentary ¶19(e)(1)(i)-1
CFPB announcement regarding the delay of TRID
The full statement from CFPB Director Richard Cordray can be viewed here