[Kristin]

Is there a specific time for when we can or cannot send a Closing Disclosure aside from TRID waiting periods? For example, if we were to send the Closing Disclosure to a customer at the time the loan is “approved with conditions” rather than the point that we are at the “clear to close” status, does that lock us into the loan if something were to occur that would cause us to deny the loan? One example might be that the homeowners insurance comes back higher than expected throwing the customer’s DTI ratio over the limit.
Does the loan need to have final approval with no conditions before we send a Closing Disclosure?

[rcooper]

I don’t believe you are obligated to close a loan, if something arises in underwriting that makes the applicant ineligible, because you gave the closing disclosure.

Typically a lender will know before the closing disclosure is issued if the loan will be denied.

I’ve sent the question to Jack. He’ll weigh in if he has differing or additional thoughts.

[rcooper]

I discussed this Jack and he agrees. He did note, however, that a consumer can sue anybody for anything. The CD contains the closing date. You tell the borrower we are going to close on May 27 and then before that date arrives you send an adverse action notice. The consumer might sue for an unfair or deceptive act or practice. Not likely, but possible.

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