Is a revised LE required if a rate lock is extended? The creditor does not charge a rate lock extension fee and there is no change in any interest rate related charges.

Under the revised TRID amendments - yes - as soon as you decide to implement them between 10/10/17 and 10/01/18.

^ yep, lol. You have up until 10/1/2018 and you can implement any piece of the revised rules at any time. So, you can implement that process on 10/10/2017 or wait until the very end.

Because I love written agreements so much as you know, Randy wink would you clarify for me that we will not need another signed written rate lock agreement prior to issuing the rate lock extension loan estimate.
I've looked but obviously missed anything that speaks directly to this issue.
Thanks.

No written lock extension - just like an original written lock agreement = no lock extension. I don't see it as any different. It just comes down to whether the creditor wants to honor the old rate. You can't issue a new LE with an extended date without an agreement with the borrower.

Maybe I am not reading this the same as everyone else, but where does it definitively state that you must issue a revised LE if an extension is entered into with the borrower (no extension fee or changes to interest related charges)? I still don't know that this addresses that variable. It states that once it is subject to a rate lock agreement it does not subsequently require the disclosure of a revised LE. The question is does each rate lock agreement or extension create a new obligation to generate a revised LE?

When a revised Loan Estimate is provided as required by § 1026.19(e)(3)(iv)(D), the rate lock information disclosed pursuant to § 1026.37(a)(13)(i) must be updated to reflect the expiration date of the interest rate disclosed, regardless of any changes to the disclosed interest rate or interest rate-related charges. Once the interest rate is subject to a rate lock agreement, § 1026.19(e)(3)(iv)(D) does not subsequently require the disclosure of a revised Loan Estimate."

You are correct. The way it currently reads - it is one and done regarding rate locks. It only needs to be updated if you happen to issue another LE for some other reason. Although many investors are probably going to require it.

Just to piggy back, if you've issued a CD and a Borrower pushes back their closing of escrow date and their rate lock is going to lapse do you send a revised CD out with the extension information prior to the lapse (to stay within 3-days of the new information) or at the time of the lapse?

Vive, what do you mean by 'extension information'? Are you talking fees? Because there's nothing else on the CD that pertains to a rate lock that I know of.

Apologies, yes I'm meaning the extension fee when I say "information"

Once you've sent a CD you cannot go back to LE so the time frame to capture the fee isn't the same either.
If the borrower is changing the closing date and you've already sent the original CD, then this falls into the 'black hole' that was just cleared up saying you can reissue the CD to capture the fee and reset the tolerance.
As for when to send it, if they've set a new closing date, then you know the fee is going to be charged so send the new CD as soon as possible. No need to wait for the actual lapse because they're not going to beat that date anyway.

Truffle is correct that that you cannot issue a revised LE once a CD is provided to an applicant. The question then becomes this: Are you required to provide a new CD when a previously floating rate is locked in after a CD has been issued to the applicant?

The answer to this is maybe.

To explain this, here is an excerpt to an article I recently wrote on this topic (and will publish soon):

In response to the confusion on what is required when a floating rate is locked after a CD has been issued, the CFPB created a new comment in the commentary to TRID 2.0. This comment explains that a revised Closing Disclosure isn’t automatically required when a floating rate is locked, after an initial CD has been issued. The CFPB clarified by saying in the preamble to the 2017 TRID amendments that “such a corrected Closing Disclosure is required only when the disclosures have become inaccurate, pursuant to § 1026.19(f)(2).” In other words, a revised CD would only be required if the charges and terms disclosed on the initial CD become inaccurate. This is a variation from the hard-line rule for the Loan Estimate, but seems to be justified as the CD is supposed to be final numbers where the LE is just an estimate.

The CFPB further explained their thought process for not automatically requiring a revised CD by stating the following in the preamble: “Notably, information disclosed on the Loan Estimate under § 1026.37(a)(13) concerning the terms of the rate lock agreement are not required on the Closing Disclosure under § 1026.38, therefore a subsequent rate lock agreement by itself would not require a corrected Closing Disclosure unless the charges and terms become inaccurate.”

That wasn't Vive's question, Adam.



The question was about including the extension fee on a rate that was already locked.

Great point, Truffle. My brain was stuck on TRID 2.0 and somehow overlooked the extension part of the follow-up question. Thanks for the clarification.

To carry on with the.. Where does the fee get shown on the revised LE and now CD? a lock extension fee.

It is payable to the lender - so Section A is the only logical place.

Reviving this thread. What if the rate lock extension fee was an Investor-imposed fee? It would go in Section A, but showing as going to the Investor themselves, correct?

Hello- I need help.. If our 60 day rate lock expired before closing disclosure went out what do we do? Do we go with the interest rate that is current as of the expiration date? Thanks

If a rate lock expires a loan would normally revert to the current market rate at consummation which would be reflected on your initial and final CD.

Thank you so much!!