[tclowes]

One more follow up from yesterday’s webinar. I know that you said that the regulation is not clear about whether a valid Change in Circumstance after the Closing Disclosure is provided would reset the tolerances. However, I interpret comment 19(e)(4)(ii)-1 to say that it would reset the tolerances. What would be your recommendation on this issue?

[rcooper]

The regulation isn’t clearly worded on this point, but the commentary does state:
If, however, there are less than four business days between the time the revised version of the disclosures is required to be provided pursuant to § 1026.19(e)(4)(i) and consummation, creditors comply with the requirements of § 1026.19(e)(4) if the revised disclosures are reflected in the disclosures required by § 1026.19(f)(1)(i).

It does not clearly state that the closing disclosure can be reissued to reset tolerances due to a changed circumstance and the examples given don’t indicate that either. Because of that, the safe approach, at least until the CFPB clearly says in regulation, guidance or commentary that the CD can be reissued due to change circumstance, would be to assume that the fees used for tolerance purposes are set with the last loan estimate (or the closing disclosure if there are less than 4 business days before consummation when the change occurs).

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