A borrower's credit score drops from 740 to 690 between application and underwriting due to a new credit inquiry. The lender wants to increase the interest rate by 0.375%. Under TRID, this scenario constitutes:
Correct Answer
B) A changed circumstance that does not require a revised Loan Estimate
Under 12 CFR 1026.19(e)(3)(iv), a credit score change alone does not constitute a changed circumstance that would permit a revised Loan Estimate. The lender would need to demonstrate that the credit score change affects loan eligibility or pricing beyond normal underwriting variations.
Why This Is the Correct Answer
Under 12 CFR 1026.19(e)(3)(iv), a credit score change alone does not constitute a changed circumstance that would permit a revised Loan Estimate. The lender would need to demonstrate that the credit score change affects loan eligibility or pricing beyond normal underwriting variations.
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A borrower has a rate lock that includes a float-down provision. Rates decrease by 0.75% during the lock period. The float-down provision allows the borrower to capture rate decreases greater than 0.25% for a fee of $500. What should the MLO advise?
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