We have a construction-only loan and issued our Loan Estimate within 3 business days. The borrower provided intent to proceed. And the loan was approved but in our underwriting, the bank decided to require an interest reserve and increase the loan amount accordingly. The loan went to Board Loan for approval on Friday and the increased loan amount was approved. We are considering Friday as the day that we had "sufficient information" to support the changed circumstance (i.e., the increase in the loan amount.) Is that correct? If we discussed the need for the increase with the borrower on say, Thursday, would Thursday be the start of the 3-business days in which to provide the revised LE? Not sure how to proceed! Thank you!!

So, no one has talked to the borrower? How can the bank approve a loan that the applicant didn't apply for? I guess it would probably be considered a counteroffer in this case. In that case, present the counteroffer to the applicant and if they want to proceed, then give them an LE or if not, send them an adverse action notice.

The customer had asked for a loan increase some time ago to cover some extra costs and to build a pool for overruns. However, we didn’t have the appraisal at that time and didn’t want to commit to the higher loan amount. The appraisal came in Thursday and Committee approved the loan (at the higher loan amount) on Friday. We increased the loan mainly to accommodate for interest reserve and some extra soft costs. Because the customer brought it up some time ago, should we have done the revised LE then, or wait until we knew we were able to go with the higher amount?