A loan estimate is issued on 8 June with the rate locked until 5pm on 23 June. The processor asks what the form must say about the lock. What rate-lock information must appear on the Loan Estimate?
Correct Answer
A) That the rate is locked, with the June 23 expiration date, 5 p.m. expiration time and applicable time zone
A. Disclose lock status and the expiration date, time and time zone. For a locked rate, the Loan Estimate identifies when the lock ends. A duration alone leaves out the specific expiration information required on the form. Scope and exceptions: The rate-lock expiration is distinct from the availability of estimated closing costs. This answer addresses lock information, not every disclosure in the Rate Lock section or a guarantee against all later cost changes. Source: Section 1026.37(a)(13)(i)–(ii); comment 37(a)(13)-3 — https://www.consumerfinance.gov/rules-policy/regulations/1026/37/
Why This Is the Correct Answer
A. Disclose lock status and the expiration date, time and time zone. For a locked rate, the Loan Estimate identifies when the lock ends. A duration alone leaves out the specific expiration information required on the form. Scope and exceptions: The rate-lock expiration is distinct from the availability of estimated closing costs. This answer addresses lock information, not every disclosure in the Rate Lock section or a guarantee against all later cost changes.
Why the Other Options Are Wrong
Option B: Only the number of days, since 15 days is what the borrower needs
A day count does not replace the required expiration disclosure.
Option C: Only that the rate is locked; the expiry is given verbally on request
Providing expiration verbally on request is insufficient.
Option D: Nothing: the lock is a separate agreement outside the loan estimate
A separate agreement does not remove the Loan Estimate requirement.
Exam Tip
A lock deadline needs a date, a clock time and a time zone.
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