Borrower is purchasing house from aunt - LE provided based upon that. Now, the aunt may convey the property before the closing, something about the costs, not sure of all of the details there. However, if at closing, the property has already been conveyed but the proceeds are actually to pay the seller, is this a Purchase or Home Equity for TRID?

Sorry - topic was supposed to be Purchase OR Home Equity!!

It's not a purchase if she already owns the home as of the loan date. Sounds to me like a valid changed circumstance (customer requested change--change in purpose from purchase to home equity) if you wanted to re-issue the LE to get to the non-seller form.

raitchjay - There was a similar discussion to this in TRID 2.0 regarding going in the other direction. You cannot switch formats in mid-stream, even with a changed circumstance.

"However, the Bureau declines to implement the commenter’s suggestion to permit the use of standard disclosures in situations where there is a valid change of circumstance following the provision of the alternative disclosures to the consumer."

Thanks Randy....guess i missed that.....

Worked my magic and fixed that for you.

Randy.....does that work in reverse though? That says you can't go from alternative to standard.....does it also say (or is it just implied) that you can't go from standard to alternative?

I think it is implied - you cannot change the cash to close table in mid-stream. Plus, in this specific situation in this thread, there is no harm in continuing with the standard version on a non-seller transaction - it is purely a lender choice which form to use and there would be no requirement to switch.

Yes, i get that in this instance.....but in the instance where an applicant originally states that the purpose is home equity....and then flips to purchase.....the cash to close isn't going to work on an alternative form when it's an actual purchase. What should a bank do in that instance?

To me...it almost feels like a withdrawal/reapplication.....i mean, it's a chasm between a home equity/refinance and a purchase....is that the solution? Treat as a withdrawn and start over?

I think that would be your only option.

Thanks Randy.

Thanks for all the discussion and thanks John for editing the topic!

Let me make sure I understand. We should continue with treating this as a purchase or it would be best to withdraw the application and start a new one with it being Home Equity - is that what you are saying?

You can just switch the TRID purpose on the next disclosure issued.