All the training that I've attended and all the CFPB publications that I've read have stated that a revised Loan Estimate would need to be provided within 3 business days after the interest rate is locked on a TRID loan. Our legal council is telling us different. They said there is not requirement for a revised LE to be sent, but instead, an internal "rate lock disclosure form" could suffice. What does everyone else do?

Thanks!

Your attorney is wrong.

1029.19(e)

(D) Interest rate dependent charges. The points or lender credits change because the interest rate was not locked when the disclosures required under paragraph (e)(1)(i) of this section were provided. No later than three business days after the date the interest rate is locked, the creditor shall provide a revised version of the disclosures required under paragraph (e)(1)(i) of this section to the consumer with the revised interest rate, the points disclosed pursuant to § 1026.37(f)(1), lender credits, and any other interest rate dependent charges and terms.

Just for the sake of clarification, there are two contracts that are commonly referred to as "rate lock agreements." The one addressed in the paragraph of the regulation cited by Dan is an executed agreement between the lender and the applicant as to the interest rate, discount points and any related charges, with a stated duration during which the rate, etc., won't change.

The other "rate lock agreement" is one between a lender and a secondary market investor in which the investor commits to purchasing all or part of a loan closed at an agreed-upon interest rate at an agreed-upon price. If this is the agreement your attorney is thinking of, he or she is correct.

Just to confirm...for our Home Equity Loans we issue the LE using the rate generated by the system however we do not indicate a rate lock on the LE because the rate could adjust based on risk based pricing once the request goes to underwriting.

We do not issue formal rate lock agreements on Home Equity Loans.

It is my understanding that because we do not lock a rate on the LE and we do not issue formal written rate lock agreements that we do not need to issue a revised LE to reflect the rate once it is determined.
The rate will appear on the CD when issued.

Am I interpreting this correctly?

Perfectly.