12. Can Creditors Revise Loan Estimates?

by Local Title

When it comes to real estate financing, borrowers may wonder if creditors can revise Loan Estimates after they’ve been provided. While creditors are generally bound by the initial Loan Estimate, certain circumstances may warrant revisions to ensure accuracy and compliance with TRID regulations. Here’s what borrowers need to know about revisions to TRID Loan Estimates:

Changed Circumstances

Creditors are permitted to provide revised Loan Estimates under specific changed circumstances that impact settlement charges or the borrower’s eligibility for the loan. These circumstances include events that increase settlement charges beyond legal tolerance limits or affect the borrower’s eligibility or the value of the loan security.

Revisions for Specific Situations

In addition to changes in settlement charges or eligibility, creditors may revise Loan Estimates under the following circumstances:

a) Interest Rate Changes: If the interest rate was not locked, and the new rate affects points or lender credits, a revised Loan Estimate may be provided.

b) Settlement Delays: For new construction loans, creditors may issue revised Loan Estimates within a specified revision window, typically 60 days, due to settlement delays.

c) Borrower Requests: If the borrower indicates an intent to proceed more than 10 business days after the initial Estimate or requests revisions to loan terms, creditors may provide a revised Loan Estimate.

Criteria for Changed Circumstances

Changed circumstances are defined as extraordinary events beyond the control of the borrower or lending parties, changes or inaccuracies revealed in the information used to prepare the Loan Estimate, or new information on the borrower or transaction that was not previously considered by the creditor.

Ensuring Accuracy and Compliance

Revisions to Loan Estimates are intended to ensure accuracy, transparency, and compliance with TRID regulations. By allowing creditors to revise estimates under specific circumstances, borrowers are protected against unexpected changes and provided with updated information to make informed decisions about their loans.

Communication and Transparency

Throughout the loan process, clear communication between borrowers and creditors is essential. Borrowers should be proactive in notifying creditors of any changes or requests that may necessitate revised Loan Estimates. Likewise, creditors should promptly provide revised estimates when warranted by changed circumstances, ensuring transparency and fairness for all parties involved.

While creditors are generally bound by the initial Loan Estimate, certain changed circumstances may warrant revisions to ensure accuracy and compliance with TRID regulations. By understanding the criteria for revisions and maintaining open communication with creditors, borrowers can navigate the loan process confidently and make informed decisions about their real estate financing.