Post-Closing information, but borrower owes

Posted By: Compliance NABW

Post-Closing information, but borrower owes - 03/29/18 09:06 PM

I understand the Official Interpretations in Reg. Z related to what to do when a change occurs after closing. I know that a corrected CD is necessary if a change occurs within 60 days after closing. What I don't quite get is if a charge, such as property taxes because you slightly underestimated the actual bill, increased and you issue the corrected CD, do you just act like this amount was paid at closing, even though the creditor or settlement agent has to attempt to collect for it? Do you make some kind of P.O.C notation? What would happen here if the borrower didn't send over the additional monies?
Posted By: rlcarey

Re: Post-Closing information, but borrower owes - 03/29/18 10:35 PM

I always wondered about a couple of those examples too smile How do you really ask for more money after the fact and actually collect it.
Posted By: John Burnett

Re: Post-Closing information, but borrower owes - 03/30/18 01:23 PM

If this were to happen in my area, the settlement agent would not pay the tax bill until the extra pound of flesh gets extracted from the consumer. In other words, the consumer is told that there will be an unpaid tax bill that he will be responsible for unless he pays the piddling difference now.
Posted By: Compliance NABW

Re: Post-Closing information, but borrower owes - 03/30/18 01:24 PM

Yeah, I can understand when the lender has to refund, then you can "act" like it took place at closing, but it would seem more difficult to convey that when you need to request more money.

If you receive an estimated or proposed amount for property taxes from the county for that year and then the actual statement comes in later with an increased amount, is this the same thing as the "out" mentioned in the Official Interpretation to 12 CFR 1026.19(f)(2)(iii)? Seems like it may fit, but also sounds more like the lender has a firm amount in existence and then raised the taxes. Whereas, in my example it is just that the taxes were "proposed" and the actual amount was higher.

[Assume consummation occurs on a Monday and the security instrument is recorded on Tuesday, the day after consummation. Assume further that ten days after consummation the municipality in which the property is located raises property tax rates effective after the date on which settlement concludes. Section 1026.19(f)(2)(iii) does not require the creditor to provide the consumer with corrected disclosures because the increase in property tax rates is not in connection with the settlement of the transaction.]
Posted By: Compliance NABW

Re: Post-Closing information, but borrower owes - 03/30/18 01:26 PM

Thanks for the responses, Randy and John. So, would you just "act" like it was paid at closing on the CD? Or, perhaps in this particular case, just don't send a corrected CD based on the Official Interpretation cited above?