Who needs to keep information to justify changed circumstance?
In the Nov. 17 FAQ report, HUD added the following to its “changed circumstances” section: “If there is a changed circumstance, do the mortgage broker and the lender both need to retain documentation of the reasons for any revised GFE?” HUD’s answer: “Yes. If there is a changed circumstance resulting in a revised GFE, loan originators (mortgage brokers and lenders) both must retain documentation of the reasons for providing the revised GFE for no less than 3 years after settlement.” According to Lax, this is unnecessary redundancy and contradictory to the rule itself. “Only the party that’s issuing the revised GFE should be responsible for justifying that decision,” Lax opined. “I think it’s equally poor for HUD to impute knowledge of the broker to the lender and vice versa, because you’ve only got three days from the date that either one learns of the changed circumstances to issue the revised GFE.” Lax added that in the rule, there is no requirement that both the lender and broker ha
