1 - A rate lock is a contract, in this case between the borrower and the bank, in which they agree that the rate on the loan will be locked for an agreed period. It protects the borrower from an increase in rate during that period and protects the bank from a drop in rates during that same period. It must be a written and signed agreement between the parties.
2 - If there was no written rate lock, you don't have any need for a revised loan estimate. A change in rates is not a changed circumstance (please don't call it a change of circumstance). And if the rate increases between the time the loan estimate is issued and the closing takes place, it does not trigger a tolerance violation (interest is not a closing cost).
John S. Burnett
Fighting for Compliance since 1976
Bankers' Threads User #8