A lender issued a Loan Estimate based on a 75% loan-to-value ratio. After the appraisal comes in much lower than expected, the loan now requires mortgage insurance and higher closing costs. What is the creditor generally allowed to do?
Correct Answer
A) Issue a revised Loan Estimate within three business days of learning the changed circumstance
A lower-than-expected appraisal can be a changed circumstance because it affects the value of the security and the consumer's eligibility for previously estimated charges. That allows the creditor to issue a revised Loan Estimate, and the rule generally requires the revision within three business days after learning of the event.
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