A loan is locked and disclosed. Then they qualify for a lower rate by 0.250%, so the loan is re-locked at the lower rate. The expiration date stays the same, and APR slightly decreases, but it decreases less than 1/8th, and there are no other changes. Is a new Loan Estimate required to be sent within 3 business days? Is a new rate lock form required to be sent?

Thank you for your help
Dereck

There is no guidance. The new commentary only addresses an initial rate lock.

Tacking onto this - can APR increase after it has been locked?

I can't seem to find anything in Reg Z or the interpretations, but the CFPB website "If your rate is locked, it can still change if there are changes in your application including your loan amount, credit score, or verified income."

Does it matter if the person does not qualify for the mortgage program that was initially disclosed, but placing them into another program would only change the rate and none of the fees?

There are two reason to re-issue a LE. A changed circumstance - which means fees subject to the 0% or 10% aggregate tolerance tests have increased and you want to reset your baselines, or an initial LE was issued and the rate was not locked and the rate is subsequently locked. Anything else can be disclosed on the initial CD.

Thanks, Randy.

Is there anything that says that the rate cannot increase after it is locked, though? Or any limitations for when it can increase?

It would totally depend on the conditions in your written rate lock agreement with the consumer. For example, if you have limiting conditions in your rate lock agreement that states that unless the consumer meets certain criteria or the rate lock only covers the loan amount and product selected and if those things happen then the rate lock will no longer be valid.

Thank you again, Randy. The absence of this in Reg Z makes me think that I am missing something!