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How to Comply with the Closing Disclosure's Three-day Rule

According to the Consumer Financial Protection Bureau’s final rule, the creditor must deliver the Closing Disclosure to the consumer at least three business days prior to the date of consummation of the transaction. (Note that the Closing Disclosure and Loan Estimate must be implemented by Oct. 3, 2015, on certain loans.

In the final rule, the CFPB said creditors may use settlement agents to provide the Closing Disclosure, provided that the settlement agents comply with the final rule’s requirements for the Closing Disclosure.

As an example, if settlement is scheduled for Thursday then the Closing Disclosure can be hand delivered on Monday. A company could also deliver the disclosure by courier or other shipping or postal service so long as a signature is obtained from the borrower showing receipt on Monday. If a company does not use a service that provides evidence that the disclosure was received on Monday (ie: U.S. Postal Service first class mail), then it must send the disclosure by the prior Thursday. Use the chart below to help you determine when the Closing Disclosure should be sent to ensure the buyer receives it three days prior to consummation of the transaction.

Generally, if changes occur between the time the Closing Disclosure form is given and the closing, the consumer must be provided a new form. When that happens, the consumer must be given three additional business days to review that form before closing.

The CFPB listened to ALTA concerns and limited the instances that would require a new Closing Disclosure to be issued. Limiting the instances of delays in real estate transactions will help to ensure a positive experience for the consumer at the closing table.

Changes that require creditors to provide a new Closing Disclosure and an additional three-business-day waiting period after receipt include:

  • changes to the APR above 1/8 of a percent for most loans (and 1/4 of a percent for loans with irregular payments or periods)
  • changes the loan product
  • addition of a prepayment penalty to the loan

Some quick definitions can be helpful when understanding this rule. First, the starting point for determining when the three-day period starts is the day of consummation. Consummation is the day the consumer becomes contractually obligated on the loan (i.e., the day they sign the note). This is typically the same day as closing (12 C.F.R. §§ 1026.2(a)(13) & 1026.38(a)(3)(ii)). Once you have the right starting point then you need to count backwards. The three-day rule requires the counting of “business days,” which are “all calendar days except Sundays and the legal public holidays specified in 5 U.S.C. 6103(a), such as New Year's Day, the Birthday of Martin Luther King, Jr., Washington's Birthday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day and Christmas Day.” It is not a 72-hour requirement, but rather a day requirement so you do not need to know the time that closing will take place.

Lastly, while the examples the CFPB provides in the rule all focus on physical delivery of the disclosure, electronic delivery is allowed in accordance with the E-SIGN or Uniform Electronic Transaction Act laws. The timing requirements are the same as for physical delivery and would require obtaining some evidence of receipt (i.e., an email confirmation, system log or other indicia) or complying with the mailbox rule for presuming receipt three days after placing the documents in the mail.

Three-day chart


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WOW Love the part about the wrong fees may be required to be placed on the CD for owners and lenders title insurance.

Do we know what the requirement will be as proof that we placed Closing Disclosure in the postal first class mail and then be able to start the 3 day presumed receipt 3 days later?

Hello Karen,

Thanks for the question. In regard to proving receipt when mailing the Closing Disclosure, the consumer is considered to have received the CD three business days after it is placed in the mail.

Here's the exact wording of the regulation provided by the CFPB: “Section 1026.19(f)(1)(iii) provides that, if any disclosures required under § 1026.19(f)(1)(i) are not provided to the consumer in person, the consumer is considered to have received the disclosures three business days after they are delivered or placed in the mail. If the creditor delivers the disclosures required under § 1026.19(f)(1)(i) in person, consummation may occur any time on the third business day following delivery. If the creditor provides the disclosures by mail, the consumer is considered to have received them three business days after they are placed in the mail, for purposes of determining when the three-business-day waiting period required under § 1026.19(f)(1)(ii)(A) begins.”

Response to response - So what PROOF is necessary to prove we PLACED the CD in the mail? Obviously if just put it in an envelope and put a stamp on it and drop it in the mail box there isn't any official "receipt" of when we did mail it. Is one required or will that be up to the lender to determine and left open in the rule? Thank you in advance for being specific.

The rule does not indicate that any specific proof is needed to show the Closing Disclosure was placed in the mail. Similar to contract law, if the sender places the Closing Disclosure in the mail, has it addressed to the consumer properly and has proper postage, it is assumed to be received by the consumer three business days later. The sender could always send the Closing Disclosure certified or require a signature upon receipt if they wanted to have proof it was delivered properly, but that is not required by the rule.

This highlights the importance of having documented policies and procedures. Title production systems should create records of when the Closing Disclosure was generated. Having policies showing when a company places documents in the mail can go a long way to showing a strong pattern of compliance. Also, some postal services allow customers to generate postage (instead of stamps) and create a log of each envelope that is post marked.

I have a question regarding the timing of signing the "Closing Disclosure". We are scheduled to close on Friday Nov. 20th. We received the Closing Disclosure via Email on Tuesday Nov 17th. We reviewed it and tried to sign it electronically on Tuesday Nov 17th, but do to a computer glitch our signatures only appeared in one of two places. The Loan Officer states since we didnt sign then "correctly until Wednesday Nov 18th, we now have to push closing back, which will change all the figures and we will have to wait an additional three days. My thought on this is that there is sufficent proof via email, and electronic review and return of the "partically" completed Closing Disclosure that we did "RECIEVE" the documents in a timely fashion. We do not want to move closing. There is proof of receipt, from what i see it really doesnt matter when I sign them..do you agree?

This is just another ridiculous form of regulation to add to the pile. At most home purchasers should be able to sign a waver to reduce their closing window from 3 days to ZERO if they choose to do so!! What a clog in the system this places!

Banks do make more money from it since now in some situations the interest will KEEP accruing, closing will be delayed, and another indirect TAX is placed on the consumer.

Questions on the dates on the Closing Disclosure.

Date issuesd - I assume this is the date the Closing Disclosure is prepared, correct?

Cllosing Date - Should this be the actual Closing Date? What if the Borrower receives the Closing Disclosure in the mail within the 7 day period and call and say they want to close on the 5th day but the Closing date is scheduled on the 7th day from the day it was mailed, do we need to redo the Closing Disclosure?

Disbursement date - This is not always the Closing date, so what about this date?/

Hi There,

Can someone please help me with this question. We are supposed to be closing on dec 15, but the Cd is not closed yet and today is Saturday and I am hoping the CD to be closed by Monday Dec 14. Is it possible to avoid the 3 day waiting period so that I can close things on time. Please suggest as this information will be very helpful as I have already lined up my contractor to start the work on 17th and other appliances delivery for 17th, so timing at this point is very important. Please help.

The CD mentioned here is the final Closing Disclosure with all the figures including the lender, title charge and other expenses or only the preliminary Closing Disclosure with on Lender's figure?

If a consumer has not consented to receive electronic delivery of the CD, can the lender email the CD to an employee of a different branch of the lender and print the CD for the consumer to serve as "hand delivery"?

I have just signed my closure disclosure yesterday 1/19/2016. My projected closing date is 1/27/2016, but that has not been confirmed by the title company handling the estate sale of the property. It has been said they still need to compute finance interest and tax credit information so I will know how much money to bring on at the consummation.
It is starting to worry me about what seems to be the Title company dragging their feet to set the final signing date.
What can I, as the buyer, do at this point?

Giving you three business days to review your closing disclosure can protect you from surprise at closing table and also give you time to consult with your lawyer.

My CD has about $1700 more costs than what was promised in Loan Estimate. I want to sign(acknowledge) the receipt of CD(signature at the end of page 5 of CD) today to delay the closing, which is exactly three days after today.

My question is: Can I question and negotiate the costs after I sign(acknowledge) the receipt of CD? OR Do I have to negotiate before signing the CD? I have three days until closing.

Is there a rule concerning how early a CD can be sent out prior to closing? Can it be sent 7-10 prior?

Another example of a regulation designed to help the consumer that ends up as a huge inconvenience all parties. Don't force me into a 3 day window. I can make my own decisions CFPB!

Hi, I received my CD On Tuesday and closing is scheduled on Friday (after 3 days). I signed it the same day with one modification (reducing the house cost by $1000) that was being made the same day. I received the modified CD on Wednesday morning and I signed it. Is it possible to still close on Friday?

Hello Yash,

As long as the change didn't involve any of the following three items, you should be good to close on Friday:
-- changes to the APR above 1/8 of a percent for most loans (and 1/4 of a percent for loans with irregular payments or periods)
-- changes the loan product
-- addition of a prepayment penalty to the loan

You may want to contact your lender to make sure your closing is still scheduled for Friday.

Is the day the CD is received and acknowledged considered the 1st day of the 3 day waiting period, regardless of the time? Or does the next business have to be the 1st day?

I'm a closer for a lender and this regulation is absurd. My job has been much more stressful than ever as we've had people leave our department as a result.

This 3 day rule is a joke and does nothing the previous rule with the gfe-hud didn't do. there are so many variables that make the "CD" an unreliable statement. Taxes, insurance, prorations and other fees can change and not effect the cd rule. Good job CFPB another useless change to the mortgage industry that does nothing!!!!

My realtor tells me that the cd for the buyers of my house went out today, Tuesday. They will sign on Friday. I asked him why they couldn't sign today or tomorrow Wed? He stated that it had to be reviewed?????? Please explain.

Hello Mary. Thanks for your question. Federal regulations that went into effect Oct. 3, 2015, give the buyer three days to review the Closing Disclosure and ask questions about their mortgage. For more information about the new rules, please go to the Consumer Financial Protection Bureau's website: http://www.consumerfinance.gov/know-before-you-owe/

If the Cd is out and acknowledged on a Thursday, meaning the 3 day rule is done on Saturday, can the consumer sign on Sunday?

Hello Brooke. The rule says the borrower must receive the CD three business days before the closing. So, in this scenario if the borrower acknowledged receipt of the CD on a Thursday, three business would mean the closing could take place on Monday. However, the title company should double check with the lender about the earliest possible signing day.

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