First Guaranty Mortgage Corporation - Compliance Department




May a creditor use a revised Loan Estimate if the initial Loan Estimate expires?
 

Yes. If the consumer indicates an intent to proceed with the transaction more than 10 business days after the Loan Estimate was delivered or placed in the mail to the consumer, a creditor may use a revised Loan Estimate. (§ 1026.19(e)(3)(iv)(E); Comment 19(e)(3)(iv)(E)-1). No justification is required for the change to the original estimate of a charge other than the lapse of 10 business days.

Source: Consumer Financial Protection Bureau, TILA-RESPA Integrated Disclosure Rule, Small entity compliance guide, March 2015, section 8.8

 
Are there any other circumstances where creditors may use revised Loan Estimates?
 

Yes. In addition to the circumstances described above, creditors also may use a revised Loan Estimate where the transaction involves financing of new construction and the creditor reasonably expects that settlement will occur more than 60 calendar days after the original Loan Estimate has been provided. (§ 1026.19(e)(3)(iv)(F))

Creditors may use revised Loan Estimates in this circumstance only when the original Loan Estimate clearly and conspicuously stated that at any time prior to 60 days before consummation the creditor may issue revised disclosures. (Comment 19(e)(3)(iv)(F)-1)

Source: Consumer Financial Protection Bureau, TILA-RESPA Integrated Disclosure Rule, Small entity compliance guide, March 2015, section 8.9

 
What is the general timing requirement for providing a revised Loan Estimate?
 

The general rule is that the creditor must deliver or place in the mail the revised Loan Estimate to the consumer no later than three business days after receiving the information sufficient to establish that one of the reasons for the revision described in section 8.1 above has occurred. (§ 1026.19(e)(4)(i); Comment 19(e)(4)(i)-1)

Source: Consumer Financial Protection Bureau, TILA-RESPA Integrated Disclosure Rule, Small entity compliance guide, March 2015, section 9.1


Are there restrictions on how many days before consummation a revised Loan Estimate may be provided? 
 

Yes.

  • The creditor may not provide a revised Loan Estimate on or after the date it provides the Closing Disclosure.
  • The creditor must ensure that the consumer receives the revised Loan Estimate no later than four business days prior to consummation. If the creditor is mailing the revised Loan Estimate and relying upon the 3 business day mailbox rule, the creditor would need to place in the mail the Loan Estimate no later than seven business days before consummation of the transaction to allow 3 business days for receipt. (§ 1026.19(e)4 ; Comment 19(e)(4)(i)-2)
  • As discussed in section 11.2 below regarding the Closing Disclosure, when a revised Loan Estimate is provided in person, it is considered received by the consumer on the day it is provided. If it is mailed or delivered electronically, the consumer is considered to have received it three business days after it is delivered or placed in the mail. (§ 1026.19(e)(1)(iv) and commentary).
  • However, if the creditor has evidence that the consumer received the revised Loan Estimate earlier than three business days after it is mailed or delivered, it may rely on that evidence and consider it to be received on that date. (Comments 19(e)(1)(iv)-1 and -2) (See also discussion above in section 11.3 of this guide on similar receipt rule under § 1026.19(e)(1)(iv) and commentary regarding the Closing Disclosure.)

Source: Consumer Financial Protection Bureau, TILA-RESPA Integrated Disclosure Rule, Small entity compliance guide, March 2015, section 9.2

 
What definition of "business day" applies to redisclosure rules?
 

For purposes of providing a revised Loan Estimate within three business days of receiving information sufficient to establish that an event permitting redisclosure has occurred, the standard definition of business day applies (see section 6.9 above).

However, for purposes of the four-business-day period prior to consummation, “business day” means all calendar days except Sundays and legal public holidays specified in 5 U.S.C. 6103(a) such as New Year’s Day, the Birthday of Martin Luther King, Jr., Washington’s Birthday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day, and Christmas Day. (§ 1026.2(a)(6); Comment 2(a)(6)-2)

Source: Consumer Financial Protection Bureau, TILA-RESPA Integrated Disclosure Rule, Small entity compliance guide, March 2015, section 9.3


May a creditor revise a Loan Estimate after a Closing Disclosure already has been provided?
 

No. The creditor may not provide a revised Loan Estimate on or after the date the creditor provides the consumer with the Closing Disclosure. (§ 1026.19(e)(4)(ii); Comment 19(e)(4)(ii)-1.ii) (See also section 11.1 below, discussing timing requirements for the Closing Disclosure). Because the Closing Disclosure must be provided to the consumer no later than three business days before consummation (see section 10.2 below), this means the consumer must receive a revised Loan Estimate no later than four business days prior to consummation. (§ 1026.19(e)(4)(ii); Comment 19(e)(4)(ii)-1.ii)

Source: Consumer Financial Protection Bureau, TILA-RESPA Integrated Disclosure Rule, Small entity compliance guide, March 2015, section 9.4


What if a changed circumstance occurs too close to consummation for the creditor to provide a revised Loan Estimate?
 

If there are less than four business days in between the time a the revised Loan Estimate would have been required to be provided to the consumer and consummation, creditors may provide consumers with a Closing Disclosure reflecting any revised charges resulting from the changed circumstance and rely on those figures (rather than the amounts disclosed on the Loan Estimate) for purposes of determining good faith and the applicable tolerance. (Comment 19(e)(4)(ii)-1)

  • If the changed circumstance or other triggering event occurs between the fourth and third business days from consummation, the creditor may reflect the revised charges on the Closing Disclosure provided to the consumer three business days before consummation.
  • If the event occurs after the first Closing Disclosure has been provided to the consumer (i.e., within the three-business-day waiting period before consummation), the creditor may use revised charges on the Closing Disclosure provided to the consumer at consummation, and compare those amounts to the amounts charged for purposes of determining good faith and tolerance. (Comment 19(e)(4)(ii)-1)

Source: Consumer Financial Protection Bureau, TILA-RESPA Integrated Disclosure Rule, Small entity compliance guide, March 2015, section 9.5


 
 
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