Locked Rate, Late Revised Loan Estimate

No on both counts. Locking an initially unlocked rate is a classic changed circumstance for rate-dependent charges, so the lender was right to issue a revised Loan Estimate. But the timing rule is measured from the changed circumstance: the revised disclosure must be delivered or placed in the mail no later than three business days after the lender receives the information. Using the lender's business days (Monday through Friday), Friday, June 20 is day zero, so the deadline is Wednesday, June 25 (June 23, 24, 25). Mailing on Thursday, June 26 is the fourth business day, which is late.

The separate timing rule the compliance officer is thinking of is the receipt rule: for a revised Loan Estimate to reset tolerances, the borrower must receive it no later than four business days before consummation. That prong is satisfied here (deemed receipt around July 3, consummation July 15). But satisfying the receipt rule does not excuse missing the three-business-day issuance rule. Because the revised estimate was not validly delivered, it does not become the new baseline for the points. The original June 5 estimate - zero points - remains the baseline, and the points sit in a zero-tolerance category. The $2,500 increase is therefore a tolerance violation, not a permitted repricing.

The cure amount is the full $2,500, because discount points are a zero-tolerance charge and the baseline was $0. There is no 10 percent cumulative bucket to hide behind, and no tolerance cushion for this category.

Timing and form:

1. The cure must be delivered to the borrower no later than 60 days after consummation. July 15 plus 60 days is September 13, 2025.
2. It must be a refund to the consumer - a check or verified credit to an account the borrower controls - not a credit to escrow, principal, or a future closing. TRID does not require interest to be added to the cure.
3. If the lender had reduced the charge and reflected the reduction on the Closing Disclosure at or before consummation, that would have satisfied the cure and no post-closing refund would be needed.

A borrower-caused explanation does not help. The only defense to a tolerance violation is a valid changed circumstance plus a timely revised disclosure; the lock was a valid changed circumstance, but the delivery was late, so the defense fails. The lender should also confirm the points were bona fide (they actually bought down the rate versus a no-point option) and retain the tolerance worksheet and refund evidence for at least three years. Expect an exam finding if this pattern repeats.

The file should contain:

• The initial Loan Estimate showing the rate not locked, with the required statement that a revised estimate will be issued when the rate is locked.
• A dated lock confirmation showing the lock was received Friday, June 20 - the trigger date for the three-business-day clock.
• Evidence of the changed circumstance and a tolerance-comparison worksheet showing each category (zero, 10 percent, no tolerance) before and after redisclosure.
• Proof of delivery: an e-delivery timestamp or, for mail, the date the envelope was placed in the mail. Mail is the risky channel here; electronic delivery with a timestamp would have made receipt same-day and removed the ambiguity entirely.

The process fix is a redisclosure workflow with a hard stop: the moment a lock is received, the system opens a task with a deadline calculated in the lender's business days and blocks closing-document preparation until the revised estimate is issued and logged. A second reviewer should compare the revised estimate to the prior one and flag any zero-tolerance fee that increased. Finally, the closing department should re-check the tolerance analysis against the Closing Disclosure and, where a breach exists, initiate the 60-day cure before funding rather than after.