The Late Revised Loan Estimate on a Condo Closing
On Monday, June 2, 2025, Dana submits a complete application for a $320,000 conventional loan to buy a condominium; closing is scheduled for Friday, June 27. The initial Loan Estimate shows a $450 appraisal fee and $1,150 in closing costs. On Tuesday, June 10, the lender learns that the condo association requires a $200 project questionnaire that was not in the initial LE. The loan originator emails a revised LE on Tuesday, June 24, adding the $200 fee and increasing the appraisal fee to $650 because the appraiser must travel farther. The Closing Disclosure was delivered to Dana on Monday, June 23. Dana asks whether the revised LE is valid and whether she must pay the extra $400 at closing. The lender's compliance log shows the June 10 information was received by the LO the same day, and no other changed circumstance exists.
1. Are the $200 questionnaire fee and the $200 appraisal increase valid changed circumstances? Explain your reasoning.
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The $200 questionnaire fee is likely a valid changed circumstance if the condo questionnaire was unexpected and not reasonably discoverable when the initial LE was issued; the lender received the information on June 10. The $200 appraisal increase is much weaker. The property address was known at application, so a higher travel-distance fee generally should have been estimated accurately at the outset. A lender cannot create a changed circumstance by underestimating a known cost. Even if the questionnaire fee is valid, the lender must still satisfy the revised-LE timing rules before charging it.
2. Assuming the questionnaire fee is a valid changed circumstance, did the June 24 revised LE satisfy the timing rules? What is the consequence?
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No. The revised LE had to be received by the consumer no later than four business days before consummation. Consummation is Friday, June 27; four business days before is Monday, June 23. The revised LE was emailed June 24, one business day late. It also had to be provided within three business days of receiving the June 10 information, by Friday, June 13. A revised LE delivered after the June 23 Closing Disclosure cannot be used to reset tolerances. Because no valid revised LE was delivered, the added fees exceed the last valid LE and are tolerance violations; the lender should cure by refunding or crediting the consumer rather than collecting the extra $400 at closing.
3. What should the loan originator have done on June 10 to preserve the ability to charge the questionnaire fee?
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On June 10, the LO should have documented the changed circumstance and issued a revised LE by Friday, June 13. The lender then had to ensure Dana received it by Monday, June 23, before the Closing Disclosure, and the revised LE could not be used after the CD had been delivered. If those deadlines could not be met, the lender should have absorbed the fee or cured it at closing. The file should include the condo questionnaire, the date the information was received, the revised LE delivery evidence, and a tolerance analysis.