Can Your Bank Fix A Violation Before You Catch It?
If I were a banker and I told you that I was going to fix a violation so that you don’t have to worry about it, would you let me? The law is quite clear on this point. A lender cannot fix a violation in retrospect. And if you don’t believe me then at least take the word of a banker:
You can’t fix this type of violation. You have closed the loan and advanced the money so the best option is to document the error, train the loan officer(s) and move on. Do not rewrite the loan because the customer has the right to rescind this loan because of the HOEPA violation. If you rewrite the loan, you are only trying to take away their rights. Courts have shown this is not acceptable and you can’t take away someone’s rights.
This applies to HOEPA violations as well as RESPA and TILA violations. A bank or lending institution cannot fix a violation or rewrite the loan. You have a right to rescission under federal law and if the bank rewrites the loan without your knowledge or permission they are taking away your rights. If that happens to you then we recommend finding an attorney who specializes in real estate and mortgage law. They’ll be able to help you identify lender violations and other red flags.