TRID guidance makes it clear that “the date and time are left blank on any revised LE provided after a consumer has indicated an ITP. My questions below then appear to be whether a LE was issued subject to the above guidance or a new LE was issued which would have allowed a change in date of estimated closing costs expiration. Sorry for my TRID rust.

#1 LE issued on 6/1 with estimated closing costs to expire on 6/15. No ITP from applicant. Interest rate decreased from 5% to 4% on 7/1 and bank reissued LE based on new, lower rate. No change in loan fees from LE1 to LE2. Since bank is now beyond original date of estimated closing costs, was it OK for bank to issue a new LE which can contain a new estimated closing cost expiration date since there was no ITP?

#2 Same loan but different scenario. LE issued on 6/1. Prior to 6/15 cost estimation date there was an ITP from the customer on 6/7. Bank reissued LE on 6/10 showing a higher loan amount being sought by the customer (customer-initiated change). In this situation, since the LE guaranteed closing costs had not yet expired and there had been an ITP, should the reissued LE have been blank in the field containing a date for expiration of estimated closing costs or did the higher loan amount being sought throw this scenario into the need for a new LE? Disclosable fees, such as lender LLPAs, did increase from LE1 to LE2.

#3 LE still issued on 6/1, and bank receives ITP on 6/4 (guarantee fees still set to expire on 6/15). Rate increases on 6/5 but no change in disclosable fees. Bank issues another LE on 6/5 with different estimated closing costs date. Is that acceptable or would this be considered a reissued LE with the date field for estimated costs to be blank?

Thanks in advance.

#1 Yes

#2 You had an ITP and a changed circumstance. No new expiration date.

#3 You had an ITP and it sounds like you issued an informational LE only. No new expiration date.

Rate changed? The rate can only change if it was locked via a signed written rate lock prior to the first LE and a new rate lock agreement was done to change it. If you're talking your internal rate sheet changed, that doesn't affect any prior LE issue.

However, TR, the bank can issue a new LE after the deadline date on the first LE if the consumer didn't provide ITR within that original deadline. And the new LE can include a new deadline date. The only regulatory reason a bank would want to make sure it issues a revised LE under that provision is that a cost or costs have increased and the bank wants to set up the new bases for those costs for good faith comparison purposes.

Agreed, John. I was questioning how the rate could change. If I issue an LE using today's rate and it's not locked with a rate lock agreement, I'm not going to reissue a different LE next week just because the rate goes down, or up either. That original LE stands until such time as I have a valid CC or the borrower signs a rate lock agreement. While I know banks can opt not to honor the first LE if the ITP isn't received within the ten day time frame, I've yet to see a bank do it.

The interest rate isn't guaranteed by the loan estimate. Rates can change within the 10 business day (or longer) lifetime of the loan estimate (except if there is a rate lock in effect). When rates are on a roller coaster ride, a substantial rate change can occur in those 10 days, and even after the CD is issued.

The reason you've "yet to see a bank do it" may be that rates have been so stable for so long.

I think you're missing my point, John. OP said:


My question remains, how did the rate change? Was it locked with the appropriate rate lock agreement prior to issuing the original LE? Was a rate lock agreement signed on 6/5? Given neither occurred and the borrower gave intent to proceed, what's the valid CC for reissuing on 6/5?

Given neither occurred and the borrower gave intent to proceed, what's the valid CC for reissuing on 6/5?

You don't need a CC to issue an informational LE. Since it does not appear the rate was locked the bank chose to issue an informational LE to show the change in the rate. As John alluded to with the stable rate environment we've been in this would be a rarity but issuing the informational LE is acceptable.

TR - you can issue an LE for any reason or for none at all. Any LE you deliver has to reflect all current information known. If I issue an LE on 6/1 at an unlocked interest rate is 5% and I issue another LE on 6/5 (either changed circumstance or informational) and the unlocked par rates are now 5.25%, then that is the rate that would be necessary to be on the 6/5 LE.

Randy your use of 'necessary' has me confused...and worried. Am I supposed to be communicating changes on my rate sheet via changes on redisclosed LEs? If we issue an LE this week at 3.75% and next week we need to call for a 1004D and the rate sheet for the day we're redisclosing shows 3.85%, am I supposed to change my LE to reflect that or just add on the 1004D and it's cost? We issue the LE based on the interest rate applied for and leave it like that till the borrower signs a rate lock agreement. Is this wrong?

TR, if you don't have a CC that dictates a revised LE in order to reset your tolerances or to disclose the terms of a rate lock with the consumer then you do not have to issue a revised or informational LE. Those changes can be revised and disclosed on the CD. However if you choose to issue an informational LE then that LE must disclose the known facts at that the time it is issued.

If you know that if the loan was going to close today and that it would not close at the interest rate on the initial LE, how would it meet this requirement?

5. Best information reasonably available. Regardless of whether a creditor may use particular disclosures for purposes of determining good faith under § 1026.19(e)(3)(i) and (ii), except as otherwise provided in § 1026.19(e), any disclosures must be based on the best information reasonably available to the creditor at the time they are provided to the consumer.