The initial and final closing disclosure provided to the borrower indicated an incorrect loan purpose - should have been "refinance" was disclosed as "home equity loan". I believe it would be considered a clerical error and a corrected CD should be provided. The problem is that this isn't the first time it's happened, some incorrect disclosures were from loans that closed in September. Is this a clerical error that should be redisclosed?

Welcome to BOL.

While clerical errors may normally be corrected within 60 days of consummation, if this is a pattern or practice of a failure to properly disclose the loan purpose, I am not sure that is going to buy you anything with the regulators. You need to get this problem fixed and your efforts should be well documented. Whether to go back and redisclose for those that are more than 60 days out, is going to be a business decision.

Thanks for the greeting and response. I've put together some compliance training materials and working on LOS training. It's not only knowing the correct purpose that's the issue but how it's being entered. I will definitely document, thanks for the advice.

I think this relates to the post above - I know that a Refinance is defined as paying off an existing loan secured by a property that will secure the new loan. I shared that with someone and the return question was "What about a cash-out refinance when there is no existing lien?" Isn't that a Home Equity loan purpose? How can it be a refinance if there is no existing lien? Am I missing something?

It is a waterfall event.

1. Purchase
2. Refinance
3. Construction
4. Home Equity

You stop at the first one that applies. A refinance is one in which the consumer refinances an existing obligation already secured by the consumer's dwelling. If you have a cash-out refinance and there is no existing lien being paid off, then that is Home Equity under TRID.

I have been convinced since 2013 that the 4th purpose on that list should be "Other," because that what it is -- Any TRID loan that doesn't fit any of the first three purposes. The CFPB could have saved us at least half the confusion this item causes.