Q1: When is the LE required to be delivered to the borrower?
A1: The initial LE must be delivered within 3 general business days after receiving the borrower’s complete application.
**A revised LE must be delivered within 3 general business days after receiving information sufficient to establish a valid changed circumstance and within 3 general business days of the interest rate lock..
Q2: What is considered a “complete application” for requiring the LE to be delivered?
A2: A complete application consists of the following 6 items:
- Borrower’s Name
- Borrower’s Income (stated, not verified)
- Borrower’s Social Security Number to obtain a credit report (could also be a Tax EIN)
- Property Address
- Estimate of the Value of the Property
- Loan Amount Sought
Q3: Can a Fee Worksheet/Itemization be provided to the borrower before receiving a complete application and issuing the LE?
A3: Yes, however it cannot resemble the LE and it must contain the following disclaimer is at the top of the first page in 12-point font or greater: “Your actual rate, payment, and costs could be higher. Get an official Loan Estimate before choosing a loan.”
**Note: The requirement for this disclaimer exists when providing a list of closing costs common in the consumer’s area, providing a list of available rates for loan products, and in certain advertisements.
Q4: What is the waiting period after the borrower receives the LE?
A4: There are two waiting periods for the LE:
· The initial LE must be received by the borrower 7 specific business days before consummation.
· A revised LE must be received 4 specific business days before consummation.
Q5: What is the difference between “general” and “specific” business days?
A5: For delivering the LE, general business days are defined as days in which the lender’s offices are open to the public for carrying out substantially all of its business functions except Sundays and specific federal holidays.
**For the waiting periods after the borrower receives the LE, specific business days are defined as all days except Sundays and specific federal holidays.
Q6: If not delivered in person, when is the LE considered as received by the borrower?
A6: When the LE is not delivered in person, the borrower is considered to have received the LE 3 specific business days after it is delivered electronically or placed in the mail (unless evidence is provided demonstrating earlier receipt).
**Important Note: If the LE is delivered electronically via a document vendor that is compliant with the E-Sign Act and the borrower does not access the LE, then it’s not considered as received. The document vendor is required to update the delivery date to the date it is placed in the mail due to not being accessed electronically.
Q7: Can the waiting period required after receipt of the LE be waived?
A7: JMAC does not approve receipt of the LE waiver.
Q8: Is there any point in time when an initial LE expires and a new initial LE can be disclosed with different fees?
A8: Yes, a revised LE can be disclosed if the borrower indicates intent to proceed more than 10 business days after the LE was originally received.
Q9: What documentation can you require from the borrower before issuing the LE?
A9: The LE must be provided to the borrower before you are permitted to request any documentation (e.g. paystubs, bank statements, etc.). For example, before providing the LE, you may ask for the names, account numbers and balances of a borrower’s checking/savings account; however you may not require a copy of the bank statement or similar document for verifying the information. To provide another example, you may ask for the sales price and property address; however you cannot require the purchase/sales contract to be provided before delivering the LE.
**Note: Preapprovals for TBD properties are still permitted. In the case of a TBD Preapproval, the borrower is requesting for the lender to preapprove their loan, so in this situation, it is permissible to request income and asset documentation. (Reminder: The LE is not provided until all 6 pieces of a complete application are received.)
Q10: What can be charged to the borrower before receiving the LE, and when can you collect payment information?
A10: The borrower may only be charged a reasonable and bona fide charge for a credit report. This is the only permissible time to request the borrower’s payment information prior to the borrower receiving the LE and indicating intent to proceed.
Q11: When can you charge the appraisal fee to the borrower?
A11: The borrower must receive the LE and indicate intent to proceed before the appraisal fee can be charged.
**Note: Signing the LE does not indicate intent to proceed.
Q12: Can the same credit card the borrower provided for the credit report fee be used for the appraisal fee?
A12: It is permitted to retain the credit card number on file after charging for the credit report, however the appraisal fee cannot be charged until after the borrower has received the LE and indicated intent to proceed AND the borrower has provided new authorization for the use of the credit card for the appraisal fee.
Q13: What does the new term “Total Interest Percentage (TIP)” mean?
A13: TIP is the total amount of interest the borrower will pay over the whole life of the loan as a percentage of the loan amount.
Q14: Where are lender credits shown?
A14: The credit for interest rate chosen will be shown as “Lender Credits” under “J. Total Closing Costs” – all general lender credits are shown here. If the lender was paying for a specific fee at closing (e.g. appraisal fee), on the LE, the credit would still show under “J. Total Closing Costs” (on the CD, the specific fee is shown in the “Paid by Others” column and we can indicate it’s paid by the lender with a “(L)”).
Q15: Do I have to submit my loan within three (3) days of the application date?
1. Application Date: 10/12/2015
2. Received signed LE: 10/15/2015
3. Submit the JMAC: 10/16/2015
A15: You can submit any time after the LE is issued. The LE has to be provided to the borrower within 3 days of the application date.