Revised Loan Estimate After a Changed Circumstance
Daniel and Priya Patel are buying a $385,000 townhome with 10% down and a 30-year fixed loan. Closing is scheduled for Friday, April 18. Their initial Loan Estimate was delivered in person on Wednesday, March 26. On Monday, April 7, the seller's attorney sends an amended contract that raises the purchase price to $395,000 and increases the seller credit from $5,000 to $8,000. The loan amount rises, and the lender's origination fee increases by $450. The loan officer updates the file on Tuesday, April 8, and the revised Loan Estimate is hand-delivered on Wednesday, April 9. The borrowers still want to close April 18. The appraisal fee was disclosed at $500 on the initial LE; it is $550 on the revised LE. The lender has not yet ordered the appraisal.
1. Does the amended contract require a revised Loan Estimate? If so, by when must it be delivered, and what changed-circumstance standard applies?
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Yes. The amended sales contract is a changed circumstance affecting the loan amount and the lender's origination fee. Under Regulation Z, the lender must provide a revised Loan Estimate within three business days after receiving information sufficient to establish the changed circumstance - here, by Thursday, April 10. The revised LE must be delivered or placed in the mail no later than that date. Because the borrowers received it by hand on April 9, the delivery deadline is met. The lender may reset tolerances only for fees affected by the changed circumstance; it cannot use the revised LE to reset unrelated fees. The $450 origination-fee increase is tied to the higher loan amount, so it can be reflected. The lender should retain the amended contract and a contemporaneous explanation of the changed circumstance.
2. If the revised LE is delivered April 9, can the loan close on April 18? Explain the waiting period and how Saturdays, Sundays, and holidays count.
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The closing can occur April 18. For a revised LE that increases costs, the borrower must receive it no later than four business days before consummation. For this waiting period, “business day” means every calendar day except Sundays and federal holidays; Saturdays count. Counting from hand delivery on Wednesday, April 9: Thursday April 10 = day 1, Friday April 11 = day 2, Saturday April 12 = day 3, Sunday April 13 excluded, Monday April 14 = day 4. The earliest consummation would be Tuesday, April 15, so April 18 is permissible. If the revised LE had been mailed, the lender would need to allow for receipt, not just mailing, and should document the delivery method. The lender should also confirm Closing Disclosure timing separately.
3. The appraisal fee rises from $500 to $550. What tolerance category applies, and can the lender simply collect the extra $50 at closing?
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Appraisal fees for a service the borrower cannot shop for are a zero-tolerance category under TRID. The $50 increase cannot simply be passed through at closing unless a valid changed circumstance affected the appraisal fee and the lender disclosed the increase on a timely revised LE. The higher purchase price or loan amount might support a changed circumstance, but the lender must show the appraisal fee increase was actually caused by that change - not merely that a revised LE was issued. If the increase is not tied to a valid changed circumstance, the lender must cure the $50 and cannot collect it from the borrower. The same analysis applies to any other zero-tolerance fee.