Which of the following changes to loan terms would require a new Loan Estimate to be provided?
Correct Answer
B) A change in the loan program from conventional to FHA
Under 12 CFR 1026.19(e), a new Loan Estimate is required when there's a change in the loan program (such as from conventional to FHA), as this represents a changed circumstance that affects loan eligibility or terms significantly.
Why This Is the Correct Answer
Under 12 CFR 1026.19(e), a new Loan Estimate is required when there's a change in the loan program (such as from conventional to FHA), as this represents a changed circumstance that affects loan eligibility or terms significantly.
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A borrower qualifies for a conventional loan at 4.5% interest and a government loan at 4.25% interest. Both loans have the same APR due to different fee structures. The MLO presents only the conventional loan because it generates higher compensation. This scenario represents: