Indeed, pulling credit and/or receiving some but not all of a consumer's information can trigger the duty to provide a GFE. When in doubt, err on the side of providing disclosures too early and too often.

The importance of keeping up

Even the best-run companies increasingly find themselves struggling to understand the multitude of complex rules and regulations that govern the lending industry. Whether the rule prohibits abbreviations, requires a fixed-dollar amount rather than a percentage, or requires listing a fee on line No. 801 and not No. 808, even the smallest deviation can lead to devastating liability.

The burden remains on industry professionals to know every rule and to train their employees accordingly. Borrowers have filed and succeeded on cases based only on the fact that a GFE was mailed one day late -- even though it was well in advance of consummation of
the transaction.

A quick look at state-regulator Web sites and pending enforcement actions will show countless examples of minor errors and oversights. Regardless of how minor they are, those mistakes come with steep penalties, fines and restitution -- even when consumers are satisfied.

Thus, in addition to the revisions' stated purpose of increasing consumer awareness, these changes also may serve as a reminder to mortgage professionals: You can never be too familiar with state and federal regulations. And you can never provide your employees with too much training.

Now is a good time to review the rules and to update internal handbooks and guidelines. In some cases, companies should consider hiring experienced attorneys to perform spot audits as a way to prepare for and ensure ongoing compliance with lending-industry guidelines. At the least, preventive measures will show good faith when confronted by
state regulators.

Laura Marquez-Garrett and Miriam Cho are attorneys with Foster Pepper PLLC (www.foster.com) and work on mortgage-industry matters, including the representation of mortgage lenders and brokers in litigation and regulatory-compliance matters. E-mail Marquez-Garrett at Marql@foster.com and Cho at Chomi@foster.com.

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