Please help clarify what exactly is the partial payment policy disclosure and its purpose. This only occurs on an escrow account, correct? When do we need to issue this and is there a set template on how it should be?

Are you talking about the disclosure that appears on the Closing Disclosure??

While not the original poster, I have a similar question regarding the following paragraphs on page 25 of the TRID SECG (https://s3.amazonaws.com/files.consumerf...ce-Guide_v5.pdf):

"Beginning on October 1, 2018, a creditor must provide the Escrow Closing Notice and Partial Payment Policy Disclosure when required, regardless of when the creditor or mortgage broker received the application. (Comment 1(d)(5)-1)

For example, for an application received on October 10, 2010, if the escrow account was cancelled on April 14, 2020, the creditor would be required to give the Escrow Closing Notice, because the cancellation occurred after October 1, 2018 and after that time, Escrow Closing Notice and Partial Payment Policy Disclosure are given regardless of when the application was received. (Comment 1(d)(5)-1.v.E)"

Since the partial payment policy disclosure is typically on a CD, as long as we're providing a CD at closing is anything else required?

Thank you.

The Escrow Closing Notice is referring to 1026.20(e) which is the notice required when cancelling an escrow and the Partial Payment Policy Disclosure 1026.39(d)(5) which is the mortgage servicing transfer notice. The partial payment disclosure on the CD had been required since the get go. Why they dumped that on Page 25 - you got me.

Page 25 sends you to section 16 of the guide, which talks about the effective date for sending the Escrow closing notice and including the servicer's partial payment policy in the letter that must be sent when ownership of a loan changes hands. I don't think it's meant to relate to the CD.

I'm still a bit confused. What exactly does the partial payment policy disclosure do and when is it required?

If you buy a mortgage loan (See 1026.39), within 30 days you have to send the consumer a disclosure telling them a number of things (1026.39(d)) including describing your partial payment policy.

I guess I would like to clarify if the Partial Payment Policy Disclosure is the one mentioned in the CD under "partial payment" or if this disclosure needs to be disclosed separately. And if so, when do we disclose? So I guess it is going back to the question as to why it's on page 25 when it's been here for a long time.

Ask the CFPB. They are apples and oranges, i.e., 1026.38 versus 1026.39. Why the 1026.39 requirements are in the TILA-RESPA Integrated Disclosure rule - Small entity compliance guide, only they can answer that question.

Have a question related to this topic. When purchasing a loan the purchasing bank needs to disclose the transfer of ownership within 30 days of the transaction. As part of the notification the Bank is required to disclose the partial payment policy. Loans we have purchased, we are not servicing, they are staying with the current owner. Their partial payment policy is different than their partial payment policy. They cannot adjust their system to accommodate our policy. The regulation requires that the Bank's policy is disclosed. I would not want to confuse the borrower though by disclosing inaccurate information. Only way I can see around this is having 2 separate policies, 1 for loans purchased and not serviced by the Bank, and another for those originated by the Bank. Anyone see any issues with this? Maybe I'm misinterpreting and we do not need 2 separate policies. Please advise. Thank you.