Explain what should have happened when the change was made that resulted in the higher APR and describe the circumstances that made this change allowable under TRID rules.
Understand the Problem
The question is asking for an explanation regarding the increase in APR that occurred when the Tran's changed their loan from a twenty-year term to a thirty-year term. It is also asking to describe the circumstances under which this change in APR was permissible according to TRID rules. To solve this, we will analyze how changes in loan terms and closing costs impact APR calculations.
Answer
The lender should have issued a revised Loan Estimate under TRID rules due to the change in APR.
When the change resulting in a higher APR occurred, the lender should have issued a revised Loan Estimate. Under TRID rules, significant changes like an increased APR due to changed circumstances allow the lender to reset fees and revise disclosures.
Answer for screen readers
When the change resulting in a higher APR occurred, the lender should have issued a revised Loan Estimate. Under TRID rules, significant changes like an increased APR due to changed circumstances allow the lender to reset fees and revise disclosures.
More Information
TRID (TILA-RESPA Integrated Disclosure) rules require the lender to issue a revised Loan Estimate in case of significant changes to loan terms, such as an increase in the Annual Percentage Rate (APR). Such "changed circumstances" include unforeseen changes that affect tax or title insurance or major borrower information changes.
Tips
Lenders may mistakenly under-communicate changes to borrowers, leading to compliance issues. Always ensure timely and accurate delivery of revised Loan Estimates.
Sources
- What is a Changed Circumstance Under TRID - Compliance Cohort - compliancecohort.com
- Refresher on triggering events impacting the revised loan estimate - wolterskluwer.com
