Q: Can a creditor review detailed written documentation of income and assets prior to delivering a Loan Estimate?
A: Yes. A creditor or other person can request, collect, and review documentation or additional information voluntarily provided by the consumer prior to providing a Loan Estimate. However, the TILA-RESPA Rule prohibits a creditor from requiring a consumer to submit documents verifying information related to the consumer’s application, such as income and asset information, before providing a Loan Estimate. Additionally, the creditor cannot explicitly or implicitly represent to the consumer that it will not provide a Loan Estimate without the consumer first providing verifying documentation. (See § 1026.19(e)(2)(iii); Comment 19(e)(2)(iii)-1)
If a consumer requests a pre-approval or pre-qualification and provides five of the six pieces of information that constitute an application, the creditor is not yet obligated to provide a Loan Estimate. (Comment 2(a)(3)-1.i). So long as the consumer does not provide that sixth element, for example, the property address, the creditor is not required to provide a Loan Estimate and may simply provide a pre-approval or pre-qualification in compliance with its current practice and other applicable law. However, if the consumer provides all six elements of the application, the TILA-RESPA Rule requires the creditor to provide a Loan Estimate. (Comment 2(a)(3)-1.ii). The fact that a consumer requests a pre-approval or pre-qualification will not change the creditor's obligation to provide a Loan Estimate.