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#2252743 - 04/21/21 05:44 PM Loan Estimate - Preapproval
SallyGirl Offline
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Loan Estimate issued before receipt of a complete application.

1003 received 1/14/21 but with no property address identified. An LE was issued 1/14/21. Property address received 4/9/21. Another LE was issued on 4/9/21. Do we simply ignore the 1/14/21 LE since there was technically no application?

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TRID - TILA/RESPA Integrated Disclosures Rule
#2252748 - 04/21/21 06:12 PM Re: Loan Estimate - Preapproval SallyGirl
raitchjay Offline
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Receipt of one of the 6 pieces that make up a TRID application doesn't qualify as a valid CC. Did they give intent to proceed on the original LE?
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#2252749 - 04/21/21 06:16 PM Re: Loan Estimate - Preapproval raitchjay
SallyGirl Offline
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Intent to Proceed was provided with the LE issued on 4/9/21.

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#2252751 - 04/21/21 06:22 PM Re: Loan Estimate - Preapproval SallyGirl
raitchjay Offline
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I was referring to the 1st LE. If they didn't give ITP on the 1st one, and you closed it for incompleteness, i think you'd be ok. But i would put a stop to that practice (giving LE's without all 6 pieces).
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#2252752 - 04/21/21 06:23 PM Re: Loan Estimate - Preapproval SallyGirl
Adam Witmer Offline
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You must use the original LE as your baseline as, once the LE is provided, the six peices of information are presumed to have been received for purposes of good faith (i.e. tolerance). Look at comment 3 to 1026.19(e)(3)(iv)(A):

"3. Six pieces of information presumed collected, but not required. Section 1026.19(e)(1)(iii) requires creditors to deliver the disclosures not later than the third business day after the creditor receives the consumer's application, which consists of the six pieces of information identified in § 1026.2(a)(3)(ii). A creditor is not required to collect the consumer's name, monthly income, social security number to obtain a credit report, the property address, an estimate of the value of the property, or the mortgage loan amount sought. However, for purposes of determining whether an estimate is provided in good faith under § 1026.19(e)(1)(i), a creditor is presumed to have collected these six pieces of information. For example, if a creditor provides the disclosures required by § 1026.19(e)(1)(i) prior to receiving the property address from the consumer, the creditor cannot subsequently claim that the receipt of the property address is a changed circumstance pursuant to § 1026.19(e)(3)(iv)(A) or (B)."
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#2252754 - 04/21/21 06:29 PM Re: Loan Estimate - Preapproval SallyGirl
Adam Witmer Offline
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Okay, I was a bit slow on submitting my reply above. If the intent to proceed wasn't received, that does change things a bit in this particular case, going back to the rules related to the intent to proceed - which is the path raitchjay is going down...
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#2252755 - 04/21/21 06:31 PM Re: Loan Estimate - Preapproval SallyGirl
raitchjay Offline
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The bottom line is you treated it as an application and provided an LE. Without that application being already closed out(as i mentioned above), then you revert to the language that Adam provided.
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#2252757 - 04/21/21 06:40 PM Re: Loan Estimate - Preapproval Adam Witmer
SallyGirl Offline
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Thank you for the citation.

What if the initial 1003 submitted was for a preapproval? Is the original LE issued still the baseline? Should a written estimate of terms or costs have been issued instead of an LE?

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#2252758 - 04/21/21 06:41 PM Re: Loan Estimate - Preapproval SallyGirl
raitchjay Offline
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Originally Posted by SallyGirl
Should a written estimate of terms or costs have been issued instead of an LE?

Yes.
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#2252760 - 04/21/21 06:47 PM Re: Loan Estimate - Preapproval SallyGirl
raitchjay Offline
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When you issued the LE, you sort of threw the preapproval thing down the drain....it became a TRID application, because of the part that Adam has quoted above. That's why i was asking about the ITP on the original LE....that's the only thing i can see that would keep you from having to stick with the original LE for your tolerance baseline.
Last edited by raitchjay; 04/21/21 06:48 PM.
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#2252761 - 04/21/21 06:48 PM Re: Loan Estimate - Preapproval raitchjay
SallyGirl Offline
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The rate was not locked until 4/9/21. Since this is a valid changed circumstance, then the LE issued 4/9/21 is used for good faith?
Last edited by SallyGirl; 04/21/21 06:58 PM.
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#2252763 - 04/21/21 07:10 PM Re: Loan Estimate - Preapproval SallyGirl
raitchjay Offline
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It's a valid CC for fees related to the rate lock. It's not carte blanche to change anything else.
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#2252772 - 04/21/21 08:02 PM Re: Loan Estimate - Preapproval raitchjay
Adam Witmer Offline
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Originally Posted by raitchjay
It's a valid CC for fees related to the rate lock. It's not carte blanche to change anything else.
Said another way, the only fees that can change are those that are directly related to the rate lock. You are still locked in on your baseline from the original LE.
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Adam Witmer, CRCM

All statements are my opinion, not those of my employer, and should not be taken as legal advice.
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