Hi, I’m Diane Dean with Bankers Compliance Consulting. And I want to talk about the importance of documenting the date the interest rate is set. Now we need to know the date the interest rate is set, and in turn the rates spread, to determine whether other compliance requirements apply. Such as do you have an HPML? Do you have a Safe Harbor with the ability to repay requirements? It can also impact your HUMDA reporting. It will also come into play under the new standard qualified mortgage definition. Now sometimes we’re asked, what is this date then? Some clients tell us we always use the date of the loan estimate. Is that okay? Well, maybe others tell us we always use the date on the closing disclosure. Is that okay? Well, maybe. But we actually think it’s difficult to say it’s always one of those dates across the board throughout your institution.
Further, only a limited number of people in your institution actually know the true date the interest rate is set. Maybe it’s the lender. Maybe it’s the underwriter. Who sets the rate for the final time before closing? Now the good news here is that as long as it’s logical, there really is no wrong answer here. The bad news. However, is that if it’s not well-documented, you could be scrutinized for just about anything you use. Don’t give auditors or examiners. The ability to question the date you set the interest rate, and in turn, the rate spread. Make sure this data is well documented, upfront and close the door on any chances for scrutiny down the road.