Sam Rosenblatt

NMLS# 75844

Mortgage Planner

TRID – Redisclosure Rules

Circumstances under which a lender (Academy) may provide the borrower with a revised Loan Estimate (LE) and/or Closing Disclosure (CD)

The TILA-RESPA Integrated Disclosures (TRID) rule permits a lender to provide the borrower with a revised LE and/or CD under certain circumstances. The following tables provide an overview of what and when those revisions can and/or should take place.

A. REVISED LE
  1. Revised LE: Introduction.

    Academy may provide and use a revised LE that rediscloses a settlement charge if changed circumstances:

    • Cause the estimated charge to increase; OR
    • In the case of charges subject to the 10% cumulative tolerance, cause the sum of those charges to increase by more than the 10% tolerance.

    The revised LE must be delivered or placed in the mail no later than 3 business days after receiving the information sufficient to establish that one of the reasons for the revision described below has occurred.

  2. Revised LE: Table
    REVISED LOAN ESTIMATE
    Type of changed circumstance Description of the changed circumstance What can change in the LE; explanatory notes
    a. There is a changed circumstance affecting the settlement charges.
    1. An extenuating circumstance beyond the control of all interested parties or an unexpected event within the loan transaction; OR
    2. Information specific to the consumer or transaction that was inaccurate or changed after the disclosures were provided; OR
    3. New information specific to the consumer or transaction.

    Only those charges justified by the reason for the revision may be increased.

    Third-party costs: Academy will provide a revised LE when the total amount of third-party fees exceeds the 10% tolerance.

    b. There are changes affected by the consumer’s eligibility.

    Changes in the value of the subject property or the consumer’s credit-worthiness, resulting in the consumer being ineligible for loan terms previously disclosed. For example: The consumer tells Academy his annual income is $60,000, but his actual annual income is $50,000. If this change results in an increase in settlement service charges, a revised LE may be provided.

    Only those charges justified by the reason for the revision may be increased.

    c. The Borrower requests changes.

    The consumer requests revisions to the credit terms or settlement that affect the LE and cause an increase.

    Only those charges justified by the reason for the revision may be increased.

    Providing a revised LE allows Academy to compare the updated figures that have increased due to an event that allows for redisclosure to the amount actually charged for those services.

    If amounts decrease or increase only to an extent that does not exceed the applicable tolerance (0% or 10%), the original LE is still deemed to be in good faith and redisclosure is not permitted.

    d. The interest rate is locked after the initial LE was issued.

    Academy is required to provide a revised LE within 3 business days of the date the interest rate is locked and may use the revised LE to compare to points and lender credits.

    Points or lender credits for the loan may change as well as any other interest-rate-dependent charges and terms that have changed due to the new interest rate.

    e. Expired LE: more than 10 business days after initial LE was provided.

    The Borrower indicates an Intent to Proceed with the transaction more than 10 business days after the initial LE was delivered or placed in the mail to the Borrower.

    All charges and terms may change. No justification for changes needs to be documented.

    f. Loan is for a newly constructed home and settlement is delayed by more than 60 calendar days.

    Academy may provide and use a revised Loan Estimate where the transaction involves financing of new construction and it is reasonably expected that settlement will occur more than 60 calendar days after the original Loan Estimate has been provided.

    A use and occupancy permit may not have been issued for the home prior to the issuance of the LE.

    All charges and terms may change if the original LE clearly and conspicuously stated that, at any time prior to 60 days before consummation, revised disclosures may be issued.

    The revised LE must be provided prior to the consumer no later than 60 days before consummation.

  3. Revised LE: Additional requirements
    1. Academy is not required to collect all 6 pieces of information constituting the consumer’s application (consumer’s name, monthly income, social security number, property address, an estimate of the value of the property, and the loan amount sought) prior to issuing the LE. However, Academy is presumed to have collected this information prior to providing the LE and may not later collect it and claim a changed circumstance.

      For example, if an LE is provided prior to receiving the property address from the consumer, receipt of the property address at a later date cannot be relied upon as a changed circumstance.

    2. After a CD has been provided, a revised LE may not be provided.

    3. Academy must ensure that the consumer receives the revised LE no later than 4 business days prior to consummation. If the revised LE is mailed with reliance upon the 3 business day mailbox rule, the LE would need to be placed in the mail no later than 7 business days before consummation of the transaction to allow 3 business days for receipt.

    4. When a revised LE is provided in person, it is considered received by the consumer on the day it is provided. If it is mailed or delivered electronically, the consumer is considered to have received it 3 business days after it is delivered or placed in the mail unless there is evidence that it was received earlier.

    5. If there are less than 4 business days in between the time a the revised LE would have been required to be provided to the consumer and consummation, Academy will provide consumers with a Closing Disclosure reflecting any revised charges resulting from the changed circumstance and rely on those figures (rather than the amounts disclosed on the LE) for purposes of determining good faith and the applicable tolerance.

B. REVISED CD
  1. Revised CD: Introduction
    1. Consummation. Academy must provide a corrected Closing Disclosure (CD) at or before consummation. “Consummation” is defined as the date the borrower is contractually obligated for the loan, subject to state requirements. For purposes of TRID, Academy Mortgage has determined that consummation is defined as the date the borrower signs the Note.

    2. Post-consummation. Changes to the CD may also occur post-consummation, subject to certain requirements.

  2. Revised CD: Table
    REVISED CLOSING DISCLOSURE
    Type of changed circumstance Description of the changed circumstance Timing requirement
    a. Changes that occur AFTER delivery of the CD and BEFORE consummation that require a new 3- business- day waiting period.
    1. The disclosed APR becomes inaccurate. Academy defines an APR to be “inaccurate” if the APR increases more than 1/8 of 1 percentage point (0.125%) above the last-disclosed APR.
    2. The loan product changes or the loan product features change.
    3. A prepayment penalty is added. (Academy doesn’t currently offer loans with a prepayment penalty.)

    The consumer must receive the revised CD no later than 3 business days before consummation.

    An additional 3 business days is required for delivery if not delivered face-to-face unless acknowledgement of receipt is provided by all required parties. In a rescindable transaction, all parties must receive the revised CD.

    Academy requires that non-purchasing spouse and assigned POAs receive a revised CD when applicable.

    b. Changes that occur BEFORE consummation and do not require a new 3-business-day waiting period.

    Certain charges will be subject to good faith and tolerance requirements.

    Academy will provide a corrected CD to the borrower with any terms or costs that have changed that do not require redisclosure with another 3-business-day waiting period.

    The CD may be provided to the consumer at consummation; however, if requested by the consumer, Academy must provide the CD one business day prior to consummation for review.

Please note: The information included in this document is provided for informational purposes only. It is subject to change and is illustrative, not exhaustive, and it should not be applied as or interpreted as legal counsel in any way.

NMLS# 75844

State Lic: DE: MLO-75844; NJ: 75844; NC: I-109203; MD: 237; FL: LO31872; PA: 28407; VA: MLO-6487VA; DC: MLO75844;

Corp Lic: DE: 010825; NJ: 3113; NC: L-143680; MD: 12423; FL: MLD241; PA: 22177; VA: MC-5196; DC: MLB3113;

Licensed by the N.J. Department of Banking and Insurance; www.nmlsconsumeraccess.org;