I'm listening to a webinar and the speaker just said that re-disclosures needed due to a change in APR outside the applicable tolerances would be made with the CD, not the LE. Is this correct? What if the APR change happens very early in the process, before the creditor is ready to give a CD?

I'm wondering if maybe she's correct: even if the APR change happened very early it seems it could be accomplished on the CD, since the applicant(s) has to receive the CD at least 3 business days prior to closing, so there's your built-in 3 day MDIA wait too....sound right?

I guess it would depend on if there was a change in fees that warrants a redisclosed LE. If there is, I would assume you would update the APR on the redisclosed LE. Otherwise, I don't think you are allowed to redisclose the LE and the APR change would have to be reflected on the CD.

Thanks Matt.

What if you are not yet prepared to send the CD as of the time of the APR change? Suppose the loan is still in processing and the CD is not ready to go out. If you have to redisclose the APR within 3 days of the change, I would think you would use the Loan Estimate?

If you have to redisclose the APR within 3 days of the change....

There is no such requirement unless the APR change is related to a rate lock or rate lock extension.

I listened to a webinar yesterday also. The leader kept emphasizing the 3-day wait was required only if there was an increase to the APR. Has anyone heard that from the CFPB?

(She did mention that a product change and addition of a prepayment penalty also required a new 3 day waiting period.)

If they were talking about re-issuing an LE for a change in the APR without triggering one of the conditions in 1026.19(e)(3)(iv)(A) through (F), then I hope you didn't pay a lot of money for the webinar.....

If they were talking about a change in the APR after issuing the CD, that would be a true statement. However, then my question would be - what in the world is happening to cause that sort of situation??

The accuracy of the APR is determined by 1026.22. The rules regarding what APR changes trigger new disclosures have not changed from the MDIA rules. If the new APR is higher than the allowed tolerance (.125% or .25%), then it triggers re-disclosure. If the APR is lower that the allowed tolerance, it depends on the cause. If it is caused by a similar reduction in the finance charge, then no re-disclosure is required.

It was free!

The discussion was about a change in the APR after issuing the CD.

I agree with you - nothing has changed on this subject since MDIA - but this is the second "expert" that has said we don't need to worry about decreases.

It's been a while since I listed to, but I thought on one of the CFPB's webinars they referred to the Philly Fed article on redisclosure/additional waiting period for an over-disclosed APR, and I thought they made the statement that under that guidance there are very few instances in which an over-disclosed APR outside of tolerance would require an additional 3-day waiting period.

I have read through the forums and am being questioned on this, so please bear with me. I want to make sure my understanding is correct.

After disclosing our original loan estimate, the borrower requested that the loan amount be decreased. None of the fees originally disclosed changed. We did not issue a revised loan estimate, and reflected the change on the Closing Disclosure when it was time to issue a little bit later. The APR decreased by more than 1/8% when the lower loan amount was used.

Should we have redisclosed the loan estimate because this was a borrower requested change and the APR decreased?

Thank you for your time.

No. There is no requirement for a redisclosure if the rate or APR on the LE(s) becomes inaccurate.

If the APR disclosed on the Closing Disclosure (CloD) changes, but does not become inaccurate before consummation, you'll provide another CloD with the correct numbers at closing.

If the APR disclosed on the CloD becomes inaccurate (as defined in 1026.22) before consummation, you have to provide another CloD with the correct numbers AND reschedule the closing, if necessary, to ensure that the consumer receives the updated CloD at least three business days before consummation (subject to potential consumer waiver under 1026.19(f)(1)(iv)).

As Randy pointed out earlier, this hasn't changed under TRID. The one thing that did change is the requirement that there always be a "final TIL" (TRID closing disclosure), even if the initial estimate (early TIL under old rules; loan estimate under TRID) was completely accurate.

Perfect, thank you John for confirming!