Written by JiJi Bahhur, Director of Regulatory Compliance
In a recent blog post, I discussed pre-consummation changes that would require the credit union to issue a corrected Closing Disclosure to the consumer. Today, as part of our continued TILA/RESPA blog series, I’d like to now focus on the “other” situations that can trigger the need for a corrected Closing Disclosure.
During the 30-day period following consummation, if an event in connection with the settlement of the transaction occurs that causes the disclosures to become inaccurate and results in a change to an amount paid by the consumer, the creditor will be required to provide a corrected Closing Disclosure. In this situation, the creditor must deliver or place in the mail a corrected Closing Disclosure not later than 30 days after receiving information sufficient to establish that such an event has occurred.
Clerical errors are also subject to re-disclosure under section 1026.19(f)(2)(iv). Comment 1 to section 1026.19(f)(2)(iv) clarifies that an error is considered clerical "if it does not affect a numeric disclosure and does not affect requirements imposed by § 1026.19(e) or (f)." The commentary also provides a couple of illustrative examples:
"For example, if the disclosure identifies the incorrect settlement service provider as the recipient of a payment, then §1026.19(f)(2)(iv) requires the creditor to deliver or place in the mail corrected disclosures reflecting the corrected non-numeric disclosure no later than 60 days after consummation. However, if, for example, the disclosure lists the wrong property address, which affects the delivery requirement imposed by §1026.19(e) or (f), the error would not be considered clerical."
To correct non-numeric clerical errors, a creditor must deliver or place in the mail a corrected Closing Disclosure no later than 60 days after consummation.
Finally, if a creditor provides a consumer with a refund to cure a tolerance violation in connection with the good faith analysis of the estimated closing costs, the creditor must deliver or place in the mail a corrected Closing Disclosure that reflects the refund no later than 60 days after consummation.
Stay tuned! NAFCU’s TILA/RESPA blog series will continue to break-down sections of the rule over the next several months.
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TGIF. I thought I'd close out the week with a picture of my smiling twins! They turned two-and-a-half this week. Wow, how time flies!