We discovered an error in our rate lock agreement when drafting the preliminary CD that will require a change of circumstance. We have not sent the preliminary CD yet, but I'm wondering if we can send the preliminary CD as "revised" instead of sending a Revised LE, or do we need to send a Revised LE first then send the preliminary CD. Thanks in advance!

Yes, you can disclose changed circumstances on the CD. But changed circumstances are about disclosing increased fees for the purposes of determining good faith. I'm not sure what an incorrect rate lock agreement has to do with a changed circumstance.

Thank you! Basically, the rate lock expired and it wasn't caught earlier so now the rate has decreased. Is that something that we could still use a revised CD to disclose instead of a revised LE? If we do use a revised CD, we wouldn't have to send any other CDs prior to closing, correct?

You disclose a changed circumstance if a fee held to tolerance increases. Doing so correctly allows you to reset to fee tolerance baselines and avoid tolerance cures. Technically, if you wanted you could just never disclose your changed circumstances as long as you cure the fee increases at closing. The point is, a changed circumstance is only relevant in the context of an increased fee, and only if you want to reset your fee baselines.

A decreased rate does not require a re-disclosure. The only way a decreased rate would be considered a changed circumstance is if the borrower is now paying more points or receiving less credits because these line items are held to tolerance. That said, if the borrower says, "i want a new disclosure to review my new payments" you can disclose this on an LE, or on a CD, whatever you want. If you send the disclosure on a CD, you'd only need to send another Cd prior to closing if some other portion of the regulations require it. Apr becomes inaccurate, another changed of circumstance occurs, product changes, etc.

A change in the interest rate is not a changed circumstance. Only an increase in fees subject to the tolerance tests trigger a changed circumstance.

A change in the interest rate would only be a changed circumstance if the borrower signed a new rate lock agreement which would trigger the redisclosure need. If you're just giving them the new rate, you can do that on the CD.