When is a new three day waiting period triggered before buying a home?

February 15, 2019 at 9:23 am Leave a comment

Hello my faithful blog readers.

The Meier family is taking some time off next week to start looking at colleges for my 16 year-old daughter (who I swear was five about two weeks ago), and there was some important things I want to give you the heads-up on before any more time passes.

Most importantly, on January 24th, the CFPB released an updated Q&A detailing the circumstances under which re-disclosed closing disclosures are subject to the ridiculous three business day waiting period.

Your members must receive closing disclosures at least three business days before a mortgage loan is consummated. But what happens when the information contained in the disclosure is inaccurate and needs to be re-disclosed? Do you have to explain to the anxious couple that they have to stay in a motel for a few more days because federal regulations require them to sit around and stare at their accurate Closing Disclosure?

The new Q&A provides more guidance on this precise issue.  The rule is intended to permit you to provide an updated disclosure at or before closing in most circumstances, but there are exceptions. Specifically, changes that occurred after an initial Closing Disclosure but before consummation require an amended Closing Disclosure with a new 3-day waiting period if:

  • The disclosed APR becomes inaccurate;
  • The loan product changes; or
  • A prepayment penalty is added to the loan.

The 3-day waiting period can also be waived but only if your member is facing a bona fide financial emergency. But don’t fall into the trap of thinking this is a catchall loophole; it’s not.

What happens if the initial closing disclosure is inaccurate because of an overstated APR? The second question answers this conundrum. Take a look.

It’s back to the future for the NCUA board

Yesterday, the US Senate banking committee held a nomination hearing for Rodney Hood and Todd Harper to become members of the NCUA board. For Hood, it is his second time on the board having previously served between 2005 and 2010. Harper led the NCUA’s Office of Public and Congressional Affairs and served as the chief policy advisor to the NCUA Chairman between 2011 and 2017.

I will be back next Friday. Enjoy your week.

Entry filed under: Mortgage Lending, Regulatory. Tags: , .

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Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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