I'm working with a mortgage broker who so far has been very helpful and transparent. I had asked for a preliminary mortgage estimate and we locked in a rate at that time. We changed up the terms of our loan as we got closer to the closing date and the broker provided a new loan estimate. (The documents are titled "Itemized Fee Worksheet", to be precise.)
Now, because we had taken out a rate lock, they are insisting we must sign a set of loan disclosures that have the terms of the first loan estimate. The documents include the Universal Home Loan Application, Demographics, Certification and Authorization, Estimates, and on, dozens of signatures across 80 pages. Basically, everything one would need to take out a loan with the incorrect terms.
The exact language they used is:
In order for us to stay in compliance, the first set of disclosures will need to be signed. You’re not agreeing to those previous terms, rather acknowledging receipt. Per the new disclosure requirements, we’re required to send disclosures within 3 business days of lock. So, once you sign that set, it will trigger our disclosing team to send the revised Loan Estimate with the new rate.
The documents do include an "Acknowledgment of Receipt of Loan Estimate", so that lines up with what they're saying, but they also include a "Acknowledgement of Intent to Proceed", which says:
The undersigned applicants hereby indicate their intention to proceed with the transaction identified in the loan dated provided by .
Which says to me they could take out this loan and we would have no legal recourse.
The disclosures awaiting signatures also include a rate lock fee agreement with $0 filled in for the agreed upon fee. I can't see any angle for them to benefit from this unless it was more profitable for them to give us the old loan for some reason. Also, I used their original estimate to shop around and was satisfied they were giving me fair deal on the terms.
I have asked them for further clarification on which rules require this, but I wanted to verify: Is that true? What rules would require someone to sign incorrect information?
If they're blowing smoke, is this a big enough red flag to walk away from the transaction and go to a different broker or lender?