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CFPB Provides Analysis on How to Complete Closing Disclosure

The Consumer Financial Protection Bureau on Nov. 18 hosted its fourth in a series of webinars addressing frequently-asked questions regarding the RESPA-TILA integrated mortgage disclosures. This webinar focused on the details of the Closing Disclosure form, which will take the place of the current HUD-1 and final Truth in Lending disclosure. The rule goes into effect Aug. 1.

Click here to listen to a recording of the webinar and download a copy of the presentation.

This webinar gave a detailed analysis of how to complete the Closing Disclosure form. Here are some points the CFPB discussed that may be particularly pertinent to members of the title insurance and settlement industry.

What date should be listed as the “Closing Date” under the rule?

  • The term “closing date” can refer to different times in the transaction for different regions. The bureau declared that “Closing Date” for the purpose of the rule refers to the date of consummation, meaning “the time that a consumer becomes contractually obligated on a credit transaction.” (§ 1026.2(a)(13))
  • The bureau’s Official Interpretation to the definition of “Closing Date” recognizes that “[w]hen a contractual obligation on the consumer's part is created is a matter to be determined under applicable law; Regulation Z does not make this determination.” (§ 1026.2(a)(13)-1)
  • When completing the Closing Disclosure form, use the  consummation date where the forms request the Closing Date

CD page 1

When should an item be disclosed as “Services Borrower Did Shop For” vs. “Services Borrower Did Not Shop For” on the Closing Disclosure form?

  • The Bureau stated that an item that was disclosed as “Services You Can Shop For” on the Loan Estimate (§ 1026.37(f)(3)) will move into the “Services You Cannot Did Not Shop For” category on the Closing Disclosure form when the consumer chooses a provider on the written list provided by the creditor with the Loan Estimate for that item. (1026.38(f)(2))
  • Alternatively, if an item is disclosed as “Services You Can Shop For” on the Loan Estimate was not on the written list provided by the creditor with the Loan Estimate for that item, such item will be disclosed as “Services Borrower Did Shop For” on the Closing Disclosure form. (§ 1026.38(f)(3))

CD page 2

How should recording fees and transfer taxes be disclosed on the Closing Disclosure?

  • The Bureau recognized that in some states, there will be several transfer taxes that will be part of the real estate transaction and the loan transaction
  • Transfer taxes should be itemized on the Closing Disclosure instead of aggregated together as required for the Loan Estimate. (Review §1026.37(g)(1) and its subparts for the Loan Estimate requirements and § 1026.38(g)(1) and its subparts for the Closing Disclosure Requirements)
    • Itemization is for each tax and for each governmental entity
    • Name of government entity should be disclosed on Closing Disclosure form
  • Similarly to the Loan Estimate, the Closing Disclosure form requires recording fees to be disclosed as one item. (§ 1026.37(g)(1)(i) and § 1026.38(g)(1)(i))
  • However, the Closing Disclosure also requires that the amount paid to record the deed and mortgage be itemized separately.
    • The itemized recording fees for the deed and the mortgage only need to include the amounts needed to record each of these documents
    • Recording fees for other documents, except for the deed and the mortgage, are just included as part of the total recording fees and do not need to be itemized
  • Creditors should disclose the name of the entity assessing the transfer tax, even if that entity is different from the payee of the check cut by the settlement agent. (§ 1026.38(g)(1)(ii))

CD item 3

Are creditors permitted to include additional forms if the information required to be disclosed does not fit in the space allotted on the form?

  • The answer to this question depends on the provision of the rule under which the creditor wishes to use such additional disclosure forms
  • Creditors must look to each provision of § 1026.38 to determine whether the use of addendums are permitted by the rule
  • The rule does permit the use of additional pages “for the purpose of including customary recitals and information used locally in real estate settlements.” (§ 1026.38(t)(5)(ix)) As examples of when an additional page may be used to disclose customary recitals and information used locally in real estate settlements, the Bureau listed “a breakdown of payoff figures, a breakdown of the consumer's total monthly mortgage payments, check disbursements, a statement indicating receipt of funds, applicable special stipulations between buyer and seller, and the date funds are transferred.” (§ 1026.38(t)(5)(ix)-1)
  • The Bureau has not created a model form or sample of an addendum. The Bureau has only indicated that the additional forms should be formatted similarly to the disclosure form itself and that creditors not use any more additional pages than are necessary. Any additional pages that may be included should “not affect the substance, clarity, or meaningful sequence of the disclosure.” (§ 1026.38(t)(5)-1)


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Great article - 1 thought. If the only items disclosed on the recording line are the deed and the mortgage (DOT) then could it look like this is there is a power of attorney, for example, $40 + $45 = $96? If I were a consumer and saw that, not only would I be confused, but I would also wonder what other calculations on the Closing Disclosure are incorrect.

A question in regards to the Closing Date/Consummation Date shown not the Closing Disclosure if that date changes, I.e. Consumer receives Disclosure earlier than expected and therefore 3 days started and therefore wants to close earlier OR closing is delayed a day or two for various reasons but consumer received form with original closing date. Are we able to change that date, adjust figures accordingly and close on a new disclosure without waiting another 3 days?

Hello Karen,

Thanks for the question. According to ALTA's RESPA Task Force, the answer depends on who is providing the Closing Disclosure to the consumer.

If the title company is providing the Closing Disclosure three days prior to consummation and the updated Closing Disclosure, then they will have more leeway to make adjustments than if the lender is providing the Closing Disclosure.

In any event, it is possible (and in most cases required) to update the Closing Disclosure including changing the closing date if circumstances come to the lender and title companies attention that make the previous Closing Disclosure inaccurate. In some limited situations, these updates will require redisclosure and a new three-day period, but in most instances the disclosure will just need to be updated at or before closing.

In the event the disclosure just needs to be updated at or before closing (new three day period does not apply)-is the borrower required to

Resigned the updated version?
If resigning not required is there a requirement to show proof that the borrower received the updated version, if so what is the requirement

Hello Cindy. Thanks for the question. The short answer is that it depends on the lender. So, settlement agents should read their closing instructions carefully. Generally, when a disclosure becomes inaccurate within three days before consummation and a new three day period is not required, TRID requires the lender to correct the disclosure and ensure the consumers receives the disclosure at or before closing. 12 CFR 1026.19(f)(2)(i).

Each lender will have different requirements for how they will want to correct disclosures, the timing for sending them to consumers and the documentation they will require for compliance purposes.

It is a safe bet that if the lender requires some documentation of receipt for the original Closing Disclosure, they will likely require the same protocol for corrected disclosures.

Question about who pays costs.

On receiving a loan estimate, the broker cited a credit report fee of 35 dollars, there were a few issues with the file that delayed closing, and when it was all said and done, we needed to pull two different credit supplements, ending up with a credit report fee of 86.37 dollars on the closing disclosure. Who pays this difference in cost? As I do not believe it should be the lender that swallows this, as nearly ever loan would have a lender eating costs such as things. Since the Credit Report fee has to be rounded to the nearest dollar on the LE, while the CD its the exact amount.

Can a pre-close Closing Disclosure be signed byt the specific POA that will represent the borrower at closing

Are we required to provide the Seller's new address on the Buyer's Closing Disclosure, when we are not utilizing a combined form? (We prepare the Buyer's CD and Title prepares the Seller's CD).

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