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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?

  • How was the original rate considered “locked” when you could ‘unlock’ it and change the terms so easily? – Lawrence Jul 30 at 11:07
  • I provided some documents (pay stubs, bank statements, etc.), broker checked my credit and then I was 'locked'. I didn't sign anything at the time, though the disclosures were sent shortly after. Our closing date was delayed for unrelated reasons so I started doing more mortgage shopping and negotiated better terms. I get the impression from the communication I quoted that the 'lock' is the crux of the signature requirement - the disclosures do include a rate lock fee agreement, with $0 for the fee. (Editing that into the question, whoops.) – Dacio Jul 30 at 14:01
  • It sounds like you should have had to sign the original documentation anyway, so they’re not really asking anything extraordinary, except for the timing. But it’s hard to say definitively one way or the other from this distance. – Lawrence Jul 30 at 14:42
  • They're telling you "You’re not agreeing to those previous terms, rather acknowledging receipt." So sign only the ones that are "Acknowledgment of Receipt of XYZ". You'll find out very quickly whether they are only asking you to acknowledge receipt. You can also offer them an acknowledgement in bulk, in which you sign once that you have received copies of (long list of titles of documents here). – Ben Voigt Jul 30 at 14:50
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After noticing a few more things that had changed since the initial loan estimate (mostly closing on the pending sale of our current house), our broker agreed to close out the initial loan "file" (the broker's term) and start over from scratch. This apparently creates more work for them and adds to the delay than if we had just signed the first set of disclosures on time.

I did not get a clear answer on what law or regulation we would be out of compliance with if we had gotten a modified set of disclosures on the original "file" without signing the first set. I'm still curious, but I'm content to proceed with the loan without having to sign documents that are factually incorrect, so I'm letting this go.

Update: The new loan application and even the final documents for closing contained inaccuracies. Many of these were explained as "snapshot in time" of our credit history, but there was no single point in time that reflected the state of our finances on the loan documents.

We eased our conscious by eventually including a letter of explanation that enumerated the differences and explained the effect they had on inflating our credit worthiness. Then we further explained we were signing the inaccurate documents at the insistence of our loan officer that no malfeasance was being committed.

If anyone comes in with information on the laws or regulations and allowances they have for minor or inconsequential inaccuracies, I would gladly upvote and accept their answer.

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