Rate Lock Extension - CIC or not (2025)

Would you ever issue a revised LE for a change in circumstance (cic) just because the rate lock expired?

What if the rate lock expired and you are going to extend it for another 90 days at no cost and at the same rate as originally locked?

What if the rate lock expired and you are going to increase the rate to the current day rates at no cost?

I see Section 8.1 and 8.7 talks about issuing a revised LE upon original rate lock but I cant find anything on rate lock extensions.

Your help is greatly appreciated!!

We would only issue a revised LE if the rate lock extension resulted in an additional cost to the consumer.

A 90 day extension? We stress about 15!

We would disclose under both scenarios. Our opinion, the CFPB put the lock expiration on the LE for a reason, and re-disclosing that information to the borrower is good for borrower knowledge of their loan. Additionally a rate extension or re-lock should be a borrower requested change. I don't know of a COC scenario where a lender is supposed to extend or re-lock without the borrower's consent/request. That would be your valid COC reason, borrower requested change rate re-lock/extension.

With that said, if you are extending with no changes (rate and pricing) you probably don't have to re-disclose.

If you are increasing the rate, you should be re-disclosing that file.

If the rate expired, you're not extending it, you're relocking it.
That would require a new rate lock agreement and a redisclosure of the LE.

In order for it to be an extension, the rate must be coming up on the expiration date, not past it.

The only time you would have to provide a revised LE in connection with a rate lock is when the rate lock is added or extended and it affects costs. The expiration of the rate lock does not trigger a new LE, whether the interest rate will go up, down or remain the same. The only concern is an increase in closing costs.

You have the option of providing an informational loan estimate.

Whether the revised loan estimate is required to reset costs or informational only, all of the information on the disclosure should be accurate, based on the best information reasonably available at the time. But you can only adjust your cost basis for a settlement service if the LE was triggered by a cost increase over tolerance limits resulting from a changed circumstance

Is that a question or a statement Justin?

I don't think it is a requirement of the new proposed reg... but I think the "courtesy" LE's will (or may) become more common for these types of scenarios. That's assuming the LOS providers can set up the systems to differentiate the tolerance base calculations...