Can we disclose an estimate that is higher than expected costs to ensure we do not overcharge the buyer?
- Posted by Rinette Korea
- On May 26, 2017
- 0 Comments
In addition to the risk of being out-priced by competitors, estimating not based on “the best information reasonably available at the time” could lead to a costly compliance violation under TRID and UDAAP. Creditors that under or over-estimate at all can face significant monetary penalties for violating TRID, especially if they can’t prove their estimates were based on the “best information available at the time.” The CFPB can inflict fines starting at $5,000 per day for noncompliance and rising as high as $1 million for “knowing” violations. A recent CFPB release of examination procedures for originators indicates UDAAP is something the agency will be specifically watching for. Creditors over or under-estimating on a regular basis could additionally find themselves in violation of the prohibition on Unfair, Deceptive or Abusive Acts and Practices in the Dodd-Frank Act, which the bureau enforces.