Within what timeframe must servicing loan estimates be provided?

Servicing loan estimates must be provided within a specific timeframe to ensure transparency and compliance with regulations. The correct timeframe is three business days from when the lender receives a loan application. This requirement is in place to allow prospective borrowers sufficient time to understand the terms and costs associated with their mortgage, enabling them to make informed decisions.

The rule is established under the Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA), which mandate that lenders must provide a Loan Estimate to borrowers as part of the application process. The Loan Estimate includes important information about the loan terms, projected payments, and estimated closing costs.

This three-day timeframe is crucial because it aligns with consumer protection regulations designed to enhance clarity in the mortgage loan process and empower consumers. Timely Delivery of the Loan Estimate encourages borrowers to shop around for the best mortgage terms without feeling rushed or pressured.