What happens if a revised Loan Estimate is not delivered in the required time before consummation?

If a revised Loan Estimate is not delivered within the required timeframe before consummation, the correct outcome is that the loan cannot close. This is grounded in the regulations established by the Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA), which stipulate that borrowers must receive a Loan Estimate that accurately reflects the terms and conditions of the loan they are applying for.

The requirement for timely delivery of this document is crucial because it allows borrowers to have a clear understanding of their potential financial obligations and enables informed decision-making regarding their mortgage. If the lender fails to provide the revised Loan Estimate within the mandated period, it undermines these regulations, leading to the inability to close the loan until the borrower is properly informed.

Understanding these compliance requirements is essential for mortgage loan officers, as it emphasizes the importance of adhering to the timelines for document delivery to facilitate smooth loan transactions.