A lender discovers that the borrower failed to disclose $25,000 in credit card debt during the application process. This discovery occurs 10 days after the initial Loan Estimate was provided. What is the maximum timeframe for providing a revised Loan Estimate?
Correct Answer
A) 3 business days from discovery of the undisclosed debt
Per 12 CFR 1026.19(e)(3)(iv), undisclosed debt that affects the borrower's creditworthiness constitutes a changed circumstance. The lender must provide a revised Loan Estimate within 3 business days of receiving information sufficient to establish the changed circumstance, regardless of when it's discovered.
Why This Is the Correct Answer
Per 12 CFR 1026.19(e)(3)(iv), undisclosed debt that affects the borrower's creditworthiness constitutes a changed circumstance. The lender must provide a revised Loan Estimate within 3 business days of receiving information sufficient to establish the changed circumstance, regardless of when it's discovered.
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An MLO discovers that a borrower's existing mortgage has a prepayment penalty of $12,000. The proposed refinance would save $150 per month in payments. What is the minimum payback period that would generally support tangible net benefit?
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An MLO's family member applies for a loan through the MLO's company but with a different originator. The MLO has access to the file and notices an error that could help their family member qualify. What should the MLO do?