The regulation indicated initially that the Disclosures needed to be delivered to the Primary Borrower. The Secondary Market is seeing some variations that will require that all borrowers receive the Initial CD ( Only Title Only Owners on Rescindable Transactions). I believe we should act in Good Faith and Delivery the Initial CD to all borrowers, certainly. Of course all Borrowers should sign the Final CD (that goes without saying, in my opinion).

Under Reg. Z 1026.23 all consumers who have the right to rescind must receive a copy of the material disclosures and the CD is a material disclosure. Therefore if you have 5 people with rescission rights you will need provide each of them with their own copy of the CD.

There is no regulatory requirement for the CD to be signed. That will strictly be an internal or investor requirement.

I tagged this on to another thread.....but what about the LE? Is it a material disclosure for rescindable transactions? Must all applicants receive a separate copy?

No.

Thank you Dan, and Jon who responded with a New Post as well, well articulated for discussion with the Sales Staff.

So - detail question here - so if we mail the CD, do we need to mail each borrower with the right to rescind their own copy in separate envelopes or if they live at the same address can we mail the multiple copies together?

Save the postage. You can send John and Mary's copies in a single envelope addressed to Mary and John Smith.

Thanks John. I thought so, but all these changes have my head spinning.

Good information, as this has come up recently with us. If I am understanding everyone's opinion, all parties with a right to rescind must receive a copy of the CD three days prior to closing? We have had occasions where we do not know about a titled party until the title search reveals it. We would then need to resend CDs if that were the case and ensure adherence to the 3 day rule? I am new to this and trying to cover all bases. Thanks for any input.

Are your title searches sometimes actually completed so late in the game? The timing for the CD is for receipt by the third business day before consummation. If you don't find out about a consumer with a right to rescind until it's too late to make that deadline for delivery of a copy of the disclosures, get the copy to him or her ASAP.

What would the bank have done under the old rules if the fact surfaced at closing that Aunt Mathilde has a life estate in the property and it is her primary dwelling and therefore has a right to rescind (and probably ought to be at the closing to sign paperwork to mkae your lien valid)? What if Auntie isn't there? Did you postpone?

John, thank you for your response. This particular scenario involves a Title 1 Home Improvement loan that tends to move much faster than a typical residential purchase or refi. It has happened that we have scheduled a tentative closing prior to receiving the title search. In general is it correct to say that all titled parties must receive the CD whether they are a borrower or not?

No. Only titled individuals who occupy the premises as their primary residence. Adult "boomerang" children of the owners may live there, but they don't have title. A former spouse who's still on the title but no longer resides in the home doesn't have rescission rights because it's not his/her primary residence. If Jack and Jill are borrowers, but the mortgaged property is Jack's mother's primary residence, Jack and Jill don't have rescission rights, but Mom does, if she also has ownership rights.

Since the CD lists the name of the BORROWER at the top of page 1, would we need to include somewhere the non-borrower owner's name when providing a copy to him/her? I do not see a way to do this, but I may be missing something. Thanks!

John, in the case of Jack and Jill, wouldn't we want the actual borrowers to see the CD as well? I know Mom is required to receive a copy, but it just seems odd that he borrowers would be excluded.

Taylor<3 -- There's no need to have the name(s) of non-borrowing person(s) with rescission rights on the form just so you can provide them a copy.

Luv2run -- My statement was that Jack and Jill would not have rescission rights, not that they don't get disclosures. To be precise, when Jack and Jill are co-borrowers, and the real estate pledged as collateral is owned by Mom, a non-borrower, Mom gets a copy of the CloD and two copies of the Notice of Right to Rescind, and Jack or Jill must received the CloD, also. Optionally, you can give a copy of the CloD to both Jack and Jill.

Thank you John. Once again you have helped me make sense of all of this.

The regulation allows for the primary borrower to receive the LE but the CD needs to be provided to all consumers including anyone who has the right to rescind.

My question is if we hand deliver a CD to one borrower and the co-applicant is not there or the vested owner, can we hand deliver all copies of the CD to the borrower that is present?

Or do we need to hand deliver the one and mail the others and use the mailbox rule for timing requirements?

You must provide each person a copy of the documents they are entitled to. Giving my copy to to another person is not providing me with my copy.

IMO you would either need to hand deliver the copy to me, snail mail it or provide it to me electronically if I have agreed to e-sign delivery.

Thanks Dan. That is what I was thinking but was hoping for the latter.

Clarification: In the case of co-borrowers, you only need to provide the Closing Disclosure to one of them who is primarily liable on the note. The exception to that occurs in the case of a transaction subject to rescission rights, in which case a primarily liable borrower and each individual with the right to rescind gets a copy.

That said, if there are two borrowers, I'd provide each a copy strictly on principle even if no rescission is involved.

What about the scenario where, on a refinance with rescission, the initial CD was provided to the borrower, but it was inadvertently not provided to the non-borrowing spouse who has rescission rights. Should we adjourn the closing to ensure that both title holders received the initial CD three business days before closing? Or can we provide the non-borrowing spouse the CD the day before closing and ensure that they both receive the final CD at closing as well???

To my knowledge, the non-borrowing owner occupant could receive their copy along with the rescission notice at closing. I don't think the intention was for them to receive it early...just that they receive it with the ROR notice as the material disclosure.

How about in the case of a full Power-of-Attorney with rescission rights on the loan? Borrower has POA for co-borrower and signed all docs as such. Does the co-borrower (who has given all power to the borrower) need to be given a copy of CD?

In the case of coborrowers each with a right to rescind, you must provide the requisite number of disclosures without regard to the fact that one of the coborrowers is acting for himself and for the other coborrower under a power of attorney.

Two individuals with the right to rescind -- Party A and Party B. Party a holds a power of attorney allowing him to act for Party B in all aspects of the loan closing. You provide two Closing Disclosures and four copies of the notice of rescission rights. Party A must receive a set of documents for himself and a set for Party B.

Perfect! Thanks John!