Q: May a creditor use a revised Loan Estimate if the rate is locked after the initial Loan Estimate is provided?
A: If the interest rate for the loan was not locked when the Loan Estimate was provided and, upon being locked at some later time, the interest rate as well as points, lender credits and other interest rate dependent charges for the mortgage loan may change. The creditor is required to provide a revised Loan Estimate no later than three business days after the date the interest rate is locked, and may use the revised Loan Estimate to compare to points and lender credits charged.
The revised Loan Estimate must reflect the revised interest rate as well as any revisions to the points disclosed on the Loan Estimate pursuant to § 1026.37(f)(1), lender credits, and any other interest rate dependent charges and terms that have changed due to the new interest rate. It must also reflect the expiration date of the interest rate disclosed. The requirement to issue a revised Loan Estimate applies only once. Once the interest rate is subject to a rate lock agreement, the creditor is not required to provide a revised Loan Estimate again for rate lock agreement extensions or new agreements, so long as there are no changes to the charges or other terms. (§1026.19(e)(3)(iv)(D); Comment 19(e)(3)(iv)(D)-1)
A creditor may use a Closing Disclosure or corrected Closing Disclosure to reset tolerances as well. (§ 1026.19(e)(4)). For information on how to provide disclosures if the rate is locked after the Closing Disclosure is provided, see section 12.6 below (in the Bureau’s compliance guide).