Rate Lock Agreement: Signed Intent Form?

Answered by:

Question:

Our bank originates indirect secured home improvement loans. Our rates change only once or twice a year and we automatically lock the rate as soon as the application arrives (via fax or email). We do not use signed rate lock agreements which has never been questioned during past exams, but is this practice acceptable under TRID? Must we have a signed intent form? Also, are we in compliance if we indicate the rate is locked on the initial Loan Estimate? (Hopefully we can avoid having to revise Loan Estimates by locking at a later date).

Answer:

The TRID regulations discuss rate locks with the consumer as being "executed" agreements. There is a range of opinion as to whether that means the consumer must have signed the agreement, or whether the rate lock agreement can be unilaterally executed by the lender.

There is no requirement in the regulation concerning the form in which a consumer may provide intent to proceed. Any such requirement as to form would be something imposed by the lender. Without direction from the lender, intent to proceed can be oral (in person or by telephone), electronically delivered, written, etc.

You would not comply if you indicated a rate lock is in place at the time of the Loan Estimate unless you actually have an executed rate lock agreement in place.