The CFPB recently updated the TRID rule FAQs to address questions about providing a Loan Estimate to consumers. The FAQs mostly confirm guidance previously provided by the CFPB in various forms.
The FAQs focus on the obligation of a creditor to issue a Loan Estimate once the consumer submits the six items of information specified in the definition of “application” applicable to the TRID rule. The six items are the consumer’s name, income and social security number (to obtain a credit report), the property’s address, an estimate of property’s value and the loan amount sought. One FAQ reflects the CFPB’s view that even if the consumer does not intend to apply for a mortgage loan, the submission by the consumer of the six items of information triggers the obligation of a creditor to issue a Loan Estimate:
Is the requirement to provide a Loan Estimate triggered if the consumer submits the six pieces of information in order to receive a pre-approval or pre-qualification letter?
Yes. If a consumer submits the six pieces of information that constitute an application for purposes of the TRID Rule to obtain a pre-approval or pre-qualification letter for a mortgage loan subject to the TRID Rule, the creditor is responsible for ensuring that a Loan Estimate is provided to the consumer within three business days of receipt of the last of the six pieces of information. 12 CFR §1026.19(e)(1)(iii). See comment 2(a)(3)-1. The fact that a consumer submits the six pieces of information to obtain the pre-approval or the pre-qualification letter does not change the obligation to ensure a Loan Estimate is provided. The consumer has submitted the six pieces of information that constitute an application for purposes of the TRID Rule and, thus, the requirement to provide the Loan Estimate has been triggered.
Consumers can be surprised, or even annoyed, when they are not ready to submit an application to a creditor, and then receive a Loan Estimate from the creditor. Creditors should have policies and procedures in place to advise consumers that the creditor must issue a Loan Estimate if the consumer submits the six items of information.