A borrower's credit score drops from 740 to 680 between the initial application and underwriting review. This change affects the interest rate from 4.25% to 4.75%. What action must the lender take regarding the Loan Estimate?
Correct Answer
A) Issue a revised Loan Estimate within 3 business days of discovering the change
Under TRID regulations (12 CFR 1026.19(e)(3)(iv)), a change in credit score that affects loan terms constitutes a changed circumstance that may warrant a revised Loan Estimate. The lender must provide the revised estimate within 3 business days of receiving information sufficient to establish the change occurred.
Why This Is the Correct Answer
Under TRID regulations (12 CFR 1026.19(e)(3)(iv)), a change in credit score that affects loan terms constitutes a changed circumstance that may warrant a revised Loan Estimate. The lender must provide the revised estimate within 3 business days of receiving information sufficient to establish the change occurred.
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