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TRID Q&A: Who Handles Preparation and Delivery of Seller’s Closing Disclosure?

Question: We have been told by a couple of lenders that they would prepare a joint buyer and seller Closing Disclosure and deliver the same to both the buyer and seller for “signature.” Can the lender elect to take on the role of the settlement agent with regard to preparation and delivery of the Seller Closing Disclosure?

Answer: To comply with the TILA-RESPA Integrated Disclosures rule, both the buyer and seller must receive Closing Disclosures that provide details of the transaction. In sale transactions, the rule places the responsibility on the settlement agent to provide the seller with a Closing Disclosure relating to the seller’s transaction. See § 1026.19(f)(4). However, the rule also recognizes that in some instances the settlement agent may meet this obligation by either providing the seller with a seller-only Closing Disclosure or a combined buyer/seller Closing Disclosure. This can be done by either the lender or the settlement agent depending on the agreement between those parties. You should collaborate with your lender partners to determine who will prepare this document so you can ensure you meet your obligations under the Know Before You Owe regulation. 

Similar to lenders being liable for delivery and accuracy of the buyer’s Closing Disclosure, settlement agents are liable for delivery and accuracy of the seller’s Closing Disclosure. If a lender decides to provide the seller’s Closing Disclosure, the settlement agent must be aware of this process and ensure accuracy.


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