Revise a Loan Estimate or Issue the Closing Disclosure? (and other timing issues)
Getting that Closing Disclosure out in time can be a battle - here are some basic pointers to share with your team.
Worried that your loans are closing with a ton of TRID errors? Well, don't take any interviews with Sean Penn, I hear he's working with Cordray.
We know it's a pretty common struggle for lenders to be getting Closing Disclosures out on time, but here are some pointers related to timing that we want you to get right.
Here are Four Simple Rules:
1.No Loan Estimate after Closing Disclosure
Once a Closing Disclosure has been issued, no new Loan Estimate can be issued. Fortunately, this isn't the end of the world - any changes you need to make, you can basically make directly onto the Closing Disclosure.
2.Do not deliver a Loan Estimate and Closing Disclosure on the same day
Key word here is "deliver." There should never be an LE and CD with the same "Date Issued." But that doesn't mean you have to wait until the LE is received-- you can deliver a revised LE on Day #1 and the first CD on Day #2-
-even if the borrower receives both on the same day, you're still in compliance (as long as all other timing requirements are met).
3.Revised Loan Estimate must be received by borrower at least 4 days prior to closing
If you do issue a revised LE late in the process, the date on which the LE is actually received becomes relevant again. That's because the rule (an entirely separate one) requires a revised LE to be received 4 days before closing.
4.Sometimes you can make a change on the original Closing Disclosure directly instead of revising a Loan Estimate first.
Obviously, if you're rushing to get a CD out and suddenly have a changed circumstance, stopping that process and trying to get a revised LE beforehand can make it difficult, or impossible, to stay on track. The good news here is that if you're close enough to the closing date, you can actually make that change on the Closing Disclosure itself instead of stopping to revise an LE. There is a little bit of a tricky timing requirement here - maybe too much to bite off in this quick (and already long) newsletter. Let's leave it here with this general advice: it's a little safer to issue a revised LE if you have time (instead of making a change on the CD directly), but if you're so close to closing that doing so would delay closing, it is going to be permissible to do it.
In Other News:
I am loathe to begin this process already, but if you want to make sure the CFPB hears your thoughts on the upcoming HMDA changes - here is one of your best chances ... respond to their RFI available here
If you haven't invested all your savings in the lottery this month, join some of my colleagues down at Mohegan Sun for the conference. John, Steve, Rich Lahar (the new guy), and Colin (the sort of new guy) will be happy to see you!
Most recent reports tentatively link the Mass. Division of Bank's definition of "pre-approval" with the full HMDA definition. What does that mean? If you're advertising "pre-approvals", then you better be reporting them with HMDA - and if you're not reporting HMDA pre- approvals, then you shouldn't be calling anything you have a pre- approval.
Bill Zollars on his thoughts on knowing the landscape:
When I was at Kodak in the 1980s, we were buying up photofinishers in Europe to create a network to sell film to. It was a great strategy that someone in Rochester thought up. But in Italy it wasn't working. So one day the Italian general manager and I go out to dinner in Milan, and he says, "Bill this strategy will not work in Italy." I said, "I know it's difficult, but we have to." He says, "You don't understand. In Italy, photofinishing is a family business." I said, "I understand, it's the same as everywhere else." He said, "Bill, I don't mean a family business. I mean the family business." He was talking about the Mafia. Here I was about to get my kneecaps shot off, and I had no clue. I learned that before you launch off on something, you should take the time to understand what you're getting yourself into.
"Managing is making sure you are doing things right. Leading is making sure you are doing the right things."
- Bill Zollars
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