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Do we need to issue a good faith estimate (GFE) if a customer completes a refinancing application but wants to delay the closing until interest rates drop? – IBA Compliance Connection

IBA Compliance Connection

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Do we need to issue a good faith estimate (GFE) if a customer completes a refinancing application but wants to delay the closing until interest rates drop?

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Due to the wording of the RESPA regulations, we believe it would be best to send such customers a GFE, even if customers say that they do not intend to move forward on an application. Under Section 3500.7, a lender must send a GFE after it “receives an application, or information sufficient to complete an application,” unless the customer withdraws the application within the three-day period. 12 CFR 1024.7(a). The regulations do not define “withdraw,” but merely postponing a loan would not likely be considering a withdrawal of the loan application. Under a strict reading, the lender would have to send a GFE even if the customer did not intend to submit the information as an application, because the lender has information sufficient to complete the application. Of course, the lender would not be held to the GFE after ten business days pass, and you can change the interest rate and related charges up until you agree to lock the interest rate. 12 CFR 1024.7(c).