After the Loan Estimate is issued, a storm damages the property and a new inspection reasonably increases an estimated third-party charge. When may the creditor use the changed circumstance to reset the applicable estimate?

Correct Answer

D) When the creditor provides a revised Loan Estimate within three business days after receiving information sufficient to establish the changed circumstance

Why this is correct: TRID rules allow creditors to increase certain estimated closing costs beyond the original tolerance limits only if a valid "changed circumstance" occurs. A storm causing property damage is a classic example of an unforeseen event specific to the transaction. As the original explanation states, the creditor may reset the estimate for the affected third-party charge (like an inspection fee) by providing a revised Loan Estimate. This revision must be provided within three business days after the creditor receives information sufficient to establish that the changed circumstance has occurred and affects the charge. Why the other choices are wrong: "Only if the MLO wants a larger commission" is wrong because fee increases must be based on valid, documented circumstances, not on a desire for higher compensation. "At any time, without documenting the event" is wrong because the creditor must have a bona fide reason (the changed circumstance) and must document it to justify the revised estimate. "Only after consummation" is wrong because estimates for third-party services must be revised and disclosed to the consumer *before* closing, not after the loan is finalized. Exam tip: For a changed circumstance to justify a revised LE, remember the 3-day rule: Revise and deliver within 3 business days of having enough information about the event.