We have a customer who requested a change to the LE prior to signing the intent. Do we simply issue a new LE or do we need to create a CofC? They are removing escrow and a tax service fee must now be added. I believed we could just issued a new LE because no intent to proceed has been signed at this point and we are still within the 3 day window.

Thank you.

If you have no intent - then there would not be a changed circumstance. You can give a borrower a dozen different LE's with different products and conditions and let them choose the one they want when they give you the intent to proceed. Each one would just needs a 10 business day expiration.

Regardless of the timing, this is a consumer-requested change under § 1026.19(e)(3)(iv)(C) that will affect the costs for the loan. So it's what is popularly termed a "changed circumstance." If you have issued the initial LE, you now have the option to issue a revised LE removing the escrow and adding the tax service fee, but you have to do so within 3 business days of receiving the consumer's request in order to make the tax service fee part of the costs from the LE that will be compared with final costs under the good faith tolerance requirements. Whether the applicant has provided an intent to proceed is irrelevant to this question (although you could argue that the consumer's request for the change provides that intent).

What has a tax service fee got to do with dropping escrows?
Methinks the bank is trying to correct their error of not putting it on the original LE by 'taking back' the original LE and doing a new one.
You have a valid CC to drop the escrow but unless there's an escrow waiver fee, you don't need to issue a new LE and doing so to add a fee you forgot on the original LE would be a violation.
There's no take-backs after you give someone an LE.

Not the OP - but for us, when a borrower waives escrows, there is a tax service fee that is charged. This is only when waiving escrows. That is on top of any waive escrow fee that is either worked into the rate or charged as a fee.

ok...fair enough. Nothing like that happens in my world because all of our loans have tax service fees and maybe an escrow waiver fee.

Thank you all. I appreciate the feed back!