Wells Fargo recently announced they would control the generation and delivery of the Closing Disclosure (CD) when the new rule is effective August 1, 2015.

Do you think this is a decision made only by large lenders because they have more resources or should all mortgage lenders consider completing and providing the CD instead of leaving it up to settlement agents?

Well, my thoughts are that since banks are held responsible for accuracy and delivery of the CD it would be easier to complete it yourself than to recheck one completed by settlement agents.

We have watched our clients develop arcane procedures to ensure the HUD-1 is correct before funding. Some even go so far as to provide a sample HUD-1. While it makes a ton of sense for the lenders to prepare the CD, and think that's the right approach, I wonder about the logistics of the 7 day prior requirement. How will changes in the numbers provided by the settlement agent affect the advance delivery?

I am also still confused by the CFPB's timeline as laid out in their sample calendar. Deliver 7 days, receive 4 days, and 1 day advance examination. I wish I understood this better.

Since we are five years into the new HUD-1 and 90% of the settlement agents still can't get it correct, I'll leave that decision up to your bank.

I know our bank is moving to do the CD in house.

ThomasMorgan,

I can't say for sure what part of that calendar you may be looking at, but I believe that 7 days you mention may include some time if you mail the CD. The CD must be received three days prior to consummation, but if you mail it, you fall under the presumption of receipt rules (which is also three days). And then you would not count the day itself of closing (so that would be a total of 7 days). Additionally, 7 days refers to delivery of the Loan Estimate prior to consummation (i.e., must have 7 days elapse from delivery of LE prior to consummation). 4 days is the time that a revised LE must be issued prior to consummation. 3 days is the time that the CD must be delivered prior to consummation. As for the 1 day, the borrower is allowed to ask to inspect the CD up to one day prior to the consummation (the intent being that if any changes have occurred since the CD delivered 3 days prior, the borrower has a chance to review them if they so choose).

Thanks!

I am referring to the CFPB Example

http://files.consumerfinance.gov/f/20140...ine-example.pdf

Page 11 - October

I understand everything EXCEPT the 4 days and WHY that is that way. Everything within TILA and RESPA is 3 days. It seems that this 4 day rule is a confabulation? I can't find a cite!

Merry Christmas and Secular Holiday!

See 1026.19(e)(4)(ii)
(4) Provision and receipt of revised disclosures
(ii) Relationship to disclosures required under § 1026.19(f)(1)(i). The creditor shall not provide a revised version of the disclosures required under paragraph (e)(1)(i) of this section on or after the date on which the creditor provides the disclosures required under paragraph (f)(1)(i) of this section. The consumer must receive a revised version of the disclosures required under paragraph (e)(1)(i) of this section not later than four business days prior to consummation.

THANK YOU!!

In parsing that piece, I guess what I missed is that this "prior to consummation language refers to ALL disclosures required, not just the closing disclosure.

My closing department is in denial over the fact the bank is totally responsible for the accuracy of the Closing Disclosure.....they think the escrow company should still be completing "their fees", making them responsible.

I'm just confirming we are responsible for the ENTIRE Closing Disclosure, right?

Section §1026.19(f) covers the requirements for the Closing Disclosure regarding timing and that it reflect the actual terms of the transaction. It expressly permits sharing the responsibility of completing the disclosure and also clarifies that the disclosure is still required to comply with all the requirements, even if completed by the Settlement Agent. However, this part of the commentary makes it clear that the disclosure is ultimately the creditor's responsibility [§1026.19(f)(1)(v) #3]:

"If a settlement agent provides disclosures required under § 1026.19(f) in the creditor's place, the creditor remains responsible under § 1026.19(f) for ensuring that the requirements of § 1026.19(f) have been satisfied."

If we send out the Closing Disclosure 6 days from the closing date, what gets signed at the closing table other than normal closing loan documents? Do we need to have them sign a final one on the date of consummation? What would a seller sign, if anything?

First, there is no absolute requirement that the Closing Disclosure be signed by the borrower(s). Take a look at the CFPB's Blank Closing Disclosure that illustrates the application of the Integrated Disclosures Rule's content requirements, which includes three different versions of page 5, two of which show signature lines and one of which does not. Assuming that there are no changes affecting the closing disclosure between the date it is delivered and the date of the actual closing, no additional closing disclosure is needed. If the lender's policies or those of an investor require a signed CD, then you will make sure a version of page 5 with the signature lines is used.

In loans involving a seller, there's no requirement that the seller sign a Closing Disclosure, whether it's one showing both buyer and seller numbers or a disclosure provided by the settlement agent or the lender specifically for the seller only.

Interesting, good to know. What if there are changes? Does that create a new 6 day requirement or can those be given at consummation?

Revising the Closing Disclosure: [§1026.19(f)(2)]:

The borrower must be allowed to review the (revised) Closing Disclosure on the business day (general) before consummation.

If the Closing Disclosure becomes inaccurate prior to consummation a revised Closing Disclosure must be received by the borrower at or before consummation.

Any of the following changes will require a revised Closing Disclosure to be received by the borrower not less than three business days (precise) prior to consummation (if mailed you must account for an additional 3 days of mail time):

Loan Product Change (i.e. Fixed Rate vs. Adjustable Rate Product or 3/1 ARM vs. 5/1 ARM) [§1026.38(a)(5)(iii)]

inaccurate APR: [§1026.22 & §1026.38(o)(4)]

Prepayment Penalty Added [§1026.37(b)(4) & §1026.38(b)]

I wonder how frequently any of the three "delaying" changes pops up, and under what circumstances.

Based on general discussions with our clients, most everyone has done away with prepayment penalties on consumer real estate loans so that's not an issue. A Fixed to variable or a variable to variable product change appears to be pretty infrequent. However, inaccurate APRs do occur from time to time. As for the specific circumstances it's usually due to not including a substantial fee as a finance charge.

That's pretty much what I was expecting. It would be pretty short-sighted to slap on a prepayment penalty at the last minute, even if they hadn't become an "endangered species."

Is the "4 days before consummation" requirement for the LE there basically because you can't give your latest (last) LE the same day that you give the Closing Disclosure, which has to be 3 days prior to consummation (so, 3 days plus 1 day equals 4)?

@raitchjay - I have been trying to puzzle that out myself. I think that this is a confabulation of the MDIA 7 day final disclosure, with 3 days subtracted for mailing... I don't recognize the 4 explicit days from any previous regulation. In addition, the calendar provided by the CFPB as an example seems to indicate that it is 7 calendar days, but the rule seems to state "business days", though not "specific" business days.

TM, i had seen your previous question in this thread. I guess that ^^^^ was my attempt to 'answer' it. It (kinda) made sense to me by looking at it that way.

Because you can't give a rev LE once you give a CD, the last possible time you can give a rev LE before closing would be 4 days. (the CD would be given 3 days prior and the LE can't be given anytime during that period, thus you must go out 1 more day if you provide the LE in person or even later if mailed) Hope that makes sense

At a recent webinar, the speaker stated that if we have overdisclosed the APR, and the APR changes on the closing disclosure to the point where it becomes inaccurate, we do NOT need to send a revised CD based on the revised rule of 1026.22 effective August 1, 2015. I've read the passage and the interpretation and am currently cross-eyed.

Was this speaker correct? Come 8/1/2015 - If I have overdisclosed and the APR changes sufficiently to become "inaccurate", I do NOT need to send a revised CD and incur a new 3 day wait period?

That is different than the way it is today......

Based on information we received there are only 3 cases where you would have to reissue the CD and begin a new 3 day waiting period:
1. APR comes inaccurate by more than .125% (If APR goes down, re disclose at or before consummation but no waiting period)
2. loan product changes
3. prepayment penalty added