For a mortgage transaction subject to RESPA, when must a loan estimate be delivered after receiving a written application?

In a mortgage transaction governed by the Real Estate Settlement Procedures Act (RESPA), the timing of the delivery of the loan estimate is crucial for ensuring borrowers have the necessary information to make informed decisions. The correct timing for delivering a loan estimate is within three business days after receiving a written application. This regulation requires that borrowers receive the loan estimate not later than this specified time frame to allow them to review the loan terms, costs, and other relevant details before they decide to finalize the transaction.

The goal is to make sure borrowers have adequate information well in advance of the consummation date, allowing them enough time to shop around if they choose to do so. The choice stating that the loan estimate be delivered by the seventh business day before the transaction is consummated is not in compliance with RESPA requirements, as this would allow for less consumer protection and information availability than intended by the law. The law underscores the importance of timely information delivery in the mortgage process to help protect consumers from unexpected costs or terms.