Closing disclosure 3 day rule non compliance

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Topic Author
Ani
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Joined: Wed Aug 22, 2018 10:03 pm

Closing disclosure 3 day rule non compliance

Post by Ani »

Hi All,

Is it customary for mortgage companies to withhold the "final" closing disclosure(CD) till one day prior to closing.


I close 9/15. Getting a good rate on a 30 year fixed loan. No points. Great credit

They sent me an " approximate " closing disclosure on 9/11 and told me to sign it.
They stated that by signing it, I'm only stating that I recieved the CD and not agreeing to the numbers on the disclosure, as the numbers can change.

They will send me the final CD on 9.14. So I have to apparently review it during my busy work day and run to the bank to make a certified check, 1 day prior to closing.



Is this common?

Isnt the mortgage company not in compliance with the 3 day CFPB rule that gives the consumer 3 days to review , understand and question the lender about the closing disclosure.

Thanks.
BarbBrooklyn
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Re: Closing disclosure 3 day rule non compliance

Post by BarbBrooklyn »

This from the CFPB:

https://www.consumerfinance.gov/policy- ... -unlikely/

It looks like the numbers are allowed to change up until the day before closing. And this has been my experience through 2 mortgages and 4 or five refis.
BarbBrooklyn | "The enemy of a good plan is the dream of a perfect plan."
livesoft
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Re: Closing disclosure 3 day rule non compliance

Post by livesoft »

Ani wrote: Sat Sep 12, 2020 5:57 am They will send me the final CD on 9.14. So I have to apparently review it during my busy work day and run to the bank to make a certified check, 1 day prior to closing.
Nowadays, I think you would need to make an appointment to get such a check, so you should be talking to someone now at the bank you are going to get this check from. I would want them to have everything but the dollar amount ready to go, then I would e-mail them the dollar amount when I got it, they would confirm, then they would overnight me the check. Or the bank person would drive it over to my work and drop it off in person.
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Topic Author
Ani
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Re: Closing disclosure 3 day rule non compliance

Post by Ani »

livesoft wrote: Sat Sep 12, 2020 7:39 am
Ani wrote: Sat Sep 12, 2020 5:57 am They will send me the final CD on 9.14. So I have to apparently review it during my busy work day and run to the bank to make a certified check, 1 day prior to closing.
Nowadays, I think you would need to make an appointment to get such a check, so you should be talking to someone now at the bank you are going to get this check from. I would want them to have everything but the dollar amount ready to go, then I would e-mail them the dollar amount when I got it, they would confirm, then they would overnight me the check. Or the bank person would drive it over to my work and drop it off in person.




This is a good point.
I'll contact the bank today
Thank you.
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galawdawg
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Re: Closing disclosure 3 day rule non compliance

Post by galawdawg »

If the numbers change between the disclosure you received yesterday and the disclosure you receive on Monday and you need additional time to review it, just postpone the closing for a day or two.
Topic Author
Ani
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Re: Closing disclosure 3 day rule non compliance

Post by Ani »

BarbBrooklyn wrote: Sat Sep 12, 2020 7:10 am This from the CFPB:

https://www.consumerfinance.gov/policy- ... -unlikely/

It looks like the numbers are allowed to change up until the day before closing. And this has been my experience through 2 mortgages and 4 or five refis.


Thank you. Not sure if these exceptions apply to every situation. In my case. They are openly stating the closing disclosure is inaccurate and just want me to sign some paper with inaccurate numbers(that they're calling as a closing disclosure) to comply with the 3 day rule.





https://www.jdsupra.com/legalnews/the-t ... ces-91240/


"
The TRID rule also requires a creditor (or settlement agent) to deliver (in person, mail or email) a Closing Disclosure to the consumer no later than three business days before the consummation of the loan transaction. The Closing Disclosure must contain the actual terms of the loan and actual cost of the transaction. Creditors are required to act in good faith and use due diligence in obtaining this information. Although creditors may rely on third-parties such as settlement agents for the information disclosed on the Loan Estimate and Closing Disclosure, the TRID rule makes creditors ultimately responsible for the accuracy of that information."
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jfn111
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Re: Closing disclosure 3 day rule non compliance

Post by jfn111 »

galawdawg wrote: Sat Sep 12, 2020 7:53 am If the numbers change between the disclosure you received yesterday and the disclosure you receive on Monday and you need additional time to review it, just postpone the closing for a day or two.
If you postpone the closing the numbers will change again. Usually, taxes are prorated so a 2 day postponement will mean you owe the seller 2 less days of property tax reimbursement.
Topic Author
Ani
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Re: Closing disclosure 3 day rule non compliance

Post by Ani »

That makes sense



Is there any logical reason for any numbers on closing disclosure to change between Friday( 3 days prior scheduled closing) and Monday ( 1 day prior scheduled closing)

Closing was already scheduled more than a month ago.
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galawdawg
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Re: Closing disclosure 3 day rule non compliance

Post by galawdawg »

Here is the actual rule: https://files.consumerfinance.gov/f/201 ... osures.pdf

The following relevant provisions begin at page 1389
(i)Except as provided in paragraph (f)(2)(ii), if the disclosures provided under paragraph (f)(1)(i) of this section become inaccurate before consummation, the creditor shall provide corrected disclosures reflecting any changed terms to the consumer so that the consumer receives the corrected disclosures at or before consummation...

(ii) Changes before consummation requiring a new waiting period. If one of the following disclosures provided under paragraph (f)(1)(i) of this section becomes inaccurate in the following manner before consummation, the creditor shall ensure that the consumer receives corrected disclosures containing all changed terms in accordance with the requirements of paragraph (f)(1)(ii)(A) of this section:
(A) The annual percentage rate disclosed under § 1026.38(o)(4) becomes inaccurate, as defined in § 1026.22.
(B) The loan product is changed, causing the information disclosed under § 1026.38(a)(5)(iii) to become inaccurate.
(C) A prepayment penalty is added, causing the statement regarding a prepayment penalty required under § 1026.38(b) to become inaccurate.
As summarized by the CFPB, only three changes require a new three-day review under the rule.
  • The APR (annual percentage rate) increases by more than 1/8 of a percent for regular loans (most fixed-rate loans) or 1/4 of a percent for irregular loans (most adjustable loans). A decrease in APR will not require a new three-day review if it is based on changes to the interest rate or other fees. Lenders have been required to provide a three-day review for these changes in APR since 2009.
  • A prepayment penalty is added, making it expensive to refinance or sell.
  • The basic loan product changes, such as a switch from fixed rate to adjustable interest rate or to a loan with interest-only payments.
Otherwise, corrected disclosures can be provided at or before closing.
chw
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Re: Closing disclosure 3 day rule non compliance

Post by chw »

Yes, this is fine. Some #s may not be known until just before the closing. What is required, is a 3 day right to rescind the transaction if the loan is a refinance. If it is a purchase loan, or a loan on investment property, the recission period is not required, so look the closing document over closely to make sure you are getting what you are expecting.
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Ani
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Re: Closing disclosure 3 day rule non compliance

Post by Ani »

galawdawg wrote: Sat Sep 12, 2020 9:03 am Here is the actual rule: https://files.consumerfinance.gov/f/201 ... osures.pdf

The following relevant provisions begin at page 1389
(i)Except as provided in paragraph (f)(2)(ii), if the disclosures provided under paragraph (f)(1)(i) of this section become inaccurate before consummation, the creditor shall provide corrected disclosures reflecting any changed terms to the consumer so that the consumer receives the corrected disclosures at or before consummation...

(ii) Changes before consummation requiring a new waiting period. If one of the following disclosures provided under paragraph (f)(1)(i) of this section becomes inaccurate in the following manner before consummation, the creditor shall ensure that the consumer receives corrected disclosures containing all changed terms in accordance with the requirements of paragraph (f)(1)(ii)(A) of this section:
(A) The annual percentage rate disclosed under § 1026.38(o)(4) becomes inaccurate, as defined in § 1026.22.
(B) The loan product is changed, causing the information disclosed under § 1026.38(a)(5)(iii) to become inaccurate.
(C) A prepayment penalty is added, causing the statement regarding a prepayment penalty required under § 1026.38(b) to become inaccurate.
As summarized by the CFPB, only three changes require a new three-day review under the rule.
  • The APR (annual percentage rate) increases by more than 1/8 of a percent for regular loans (most fixed-rate loans) or 1/4 of a percent for irregular loans (most adjustable loans). A decrease in APR will not require a new three-day review if it is based on changes to the interest rate or other fees. Lenders have been required to provide a three-day review for these changes in APR since 2009.
  • A prepayment penalty is added, making it expensive to refinance or sell.
  • The basic loan product changes, such as a switch from fixed rate to adjustable interest rate or to a loan with interest-only payments.
Otherwise, corrected disclosures can be provided at or before closing.


Thank you.
Wow..a 1888 page document. :o


I ended up making a certified check today for a higher than cash to close amount, just in case they come up with a bigger amount on the day prior closing.
My attorney stated that they will just refund the excess amount at closing.
BarbBrooklyn
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Re: Closing disclosure 3 day rule non compliance

Post by BarbBrooklyn »

That's exactly why my lawyer adviced for some purchase or refi. As long as they are not changing the TERMS of the loan, you are talking about a small amount of money.

The reason I pay for an attorney to sit with me or be on speed-dial during closing is just so I can ask "Can I sign this?". "Is this a legitimate charge?" "Is the the usual?"

Good luck on Tuesday!
BarbBrooklyn | "The enemy of a good plan is the dream of a perfect plan."
Topic Author
Ani
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Re: Closing disclosure 3 day rule non compliance

Post by Ani »

BarbBrooklyn wrote: Sat Sep 12, 2020 12:14 pm That's exactly why my lawyer adviced for some purchase or refi. As long as they are not changing the TERMS of the loan, you are talking about a small amount of money.

The reason I pay for an attorney to sit with me or be on speed-dial during closing is just so I can ask "Can I sign this?". "Is this a legitimate charge?" "Is the the usual?"

Good luck on Tuesday!


:sharebeer
manatee2005
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Re: Closing disclosure 3 day rule non compliance

Post by manatee2005 »

Ani wrote: Sat Sep 12, 2020 5:57 am Hi All,

Is it customary for mortgage companies to withhold the "final" closing disclosure(CD) till one day prior to closing.


I close 9/15. Getting a good rate on a 30 year fixed loan. No points. Great credit

They sent me an " approximate " closing disclosure on 9/11 and told me to sign it.
They stated that by signing it, I'm only stating that I recieved the CD and not agreeing to the numbers on the disclosure, as the numbers can change.

They will send me the final CD on 9.14. So I have to apparently review it during my busy work day and run to the bank to make a certified check, 1 day prior to closing.



Is this common?

Isnt the mortgage company not in compliance with the 3 day CFPB rule that gives the consumer 3 days to review , understand and question the lender about the closing disclosure.

Thanks.
It's fine. No worries. they are swamped and doing things until the last minute. I had it happen to me and I was suspicious at first but it turned out fine.
michaeljc70
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Re: Closing disclosure 3 day rule non compliance

Post by michaeljc70 »

Yes, it is common. Yes, I don't like it. If anything is wrong you are pressed for time to get it corrected. Often you don't get the numbers until the day of the closing. The "system" is setup this way (at least where I live). Let's face it, the numbers are calculated based on the closing date and there is no reason they cannot be calculated in advance.

Another part of the real estate "system" here is the standard real estate contract gives your attorney 5 days to approve the contract. It is pretty common practice for them to not look at it until the 5th day and then call the other attorney and they give each other an extension.
Topic Author
Ani
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Re: Closing disclosure 3 day rule non compliance

Post by Ani »

michaeljc70 wrote: Sun Sep 13, 2020 10:53 am Yes, it is common. Yes, I don't like it. If anything is wrong you are pressed for time to get it corrected. Often you don't get the numbers until the day of the closing. The "system" is setup this way (at least where I live). Let's face it, the numbers are calculated based on the closing date and there is no reason they cannot be calculated in advance.

Another part of the real estate "system" here is the standard real estate contract gives your attorney 5 days to approve the contract. It is pretty common practice for them to not look at it until the 5th day and then call the other attorney and they give each other an extension.



Exactly,

It seems like it's designed to introduce an element of panic in the consumers life at the last moment, to force them into behaving irrationally in a hot market.

What numbers would possibly change in last 2 days ?

Its not like theres a property tax index that they're tracking that keeps changing minute by minute(like the stock market)
wfrobinette
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Re: Closing disclosure 3 day rule non compliance

Post by wfrobinette »

livesoft wrote: Sat Sep 12, 2020 7:39 am
Ani wrote: Sat Sep 12, 2020 5:57 am They will send me the final CD on 9.14. So I have to apparently review it during my busy work day and run to the bank to make a certified check, 1 day prior to closing.
Nowadays, I think you would need to make an appointment to get such a check, so you should be talking to someone now at the bank you are going to get this check from. I would want them to have everything but the dollar amount ready to go, then I would e-mail them the dollar amount when I got it, they would confirm, then they would overnight me the check. Or the bank person would drive it over to my work and drop it off in person.
I haven't been able to use a check since 2015. Most want things wired.
InMyDreams
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Re: Closing disclosure 3 day rule non compliance

Post by InMyDreams »

It's been a long time since I closed on my house. But.

People in my office were filling me full of horror stories about their own closing, including photocopying the extra cash payment that they had to cough up at closing (to prove it was paid; probably illegal, however), and so on.

I found my state's regulatory agency for banks. Had a nice chat with someone there. He said if that kind of shenanigans go on during closing, I should call them.

Mine went thru without a hitch, so no calls.

Still might be good to know who your state regulatory agency is, and know their phone number.
bberris
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Re: Closing disclosure 3 day rule non compliance

Post by bberris »

Ani wrote: Sun Sep 13, 2020 2:40 pm
michaeljc70 wrote: Sun Sep 13, 2020 10:53 am Yes, it is common. Yes, I don't like it. If anything is wrong you are pressed for time to get it corrected. Often you don't get the numbers until the day of the closing. The "system" is setup this way (at least where I live). Let's face it, the numbers are calculated based on the closing date and there is no reason they cannot be calculated in advance.

Another part of the real estate "system" here is the standard real estate contract gives your attorney 5 days to approve the contract. It is pretty common practice for them to not look at it until the 5th day and then call the other attorney and they give each other an extension.



Exactly,

It seems like it's designed to introduce an element of panic in the consumers life at the last moment, to force them into behaving irrationally in a hot market.

What numbers would possibly change in last 2 days ?

Its not like theres a property tax index that they're tracking that keeps changing minute by minute(like the stock market)
If the closing date changes, closing charges change.
You pay prorated taxes, essentially reimbursing the seller for taxes he paid while you own the house. Yes taxes due change every day. You prepay interest for the remainder of the closing month. That changes every day.
Of course these are totally predictable, so there shouldn't be any surprise.
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Ani
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Re: Closing disclosure 3 day rule non compliance

Post by Ani »

Correct, but when the closing date is set 1 month in advance , any one with half a brain and a calculator should be able to calculate these numbers in advance.

So witholding final numbers " till a day before closing feels like a scam to me.

I somehow snuck in names like FTC , HUD, CFPB into the last few emails with them and the final closing disclosure actually came in less than the "draft " closing disclosure.
Trism
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Re: Closing disclosure 3 day rule non compliance

Post by Trism »

As mentioned earlier in the thread, there are only a small handful of material changes to the loan terms that require re-disclosure and resetting the review clock.

There are all kinds of legitimate reasons that some of the numbers can change during these three days, not the least of which is to correct human error.

Let's say two digits were transposed for your recording fee. Instead of $215, for example, someone keyed in $15 and that's how your CD was provided to you.

Would you prefer to have them change $15 to $215, re-disclose a new CD and push out your closing date by another three days? Or would you prefer to have them just adjust your cash-in amount by $200 and still close on time?

This is especially critical on a purchase transaction, because your seller could walk away if you miss the closing date.
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