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1026.19(f) Mortgage loans—final disclosures—(1) Provision of disclosures—(i) Scope. In a transaction subject to paragraph (e)(1)(i) of this section, the creditor shall provide the consumer with the disclosures required under §1026.38 reflecting the actual terms of the transaction….
(2) Subsequent changes.
(i) Changes before consummation not requiring a new waiting period. Except as provided in paragraph (f)(2)(ii), if the disclosures provided under paragraph (f)(1)(i) of this section become inaccurate before consummation, the creditor shall provide corrected disclosures reflecting any changed terms to the consumer so that the consumer receives the corrected disclosures at or before consummation. Notwithstanding the requirement to provide corrected disclosures at or before consummation, the creditor shall permit the consumer to inspect the disclosures provided under this paragraph, completed to set forth those items that are known to the creditor at the time of inspection, during the business day immediately preceding consummation, but the creditor may omit from inspection items related only to the seller’s transaction.(ii) Changes before consummation requiring a new waiting period. If one of the following disclosures provided under paragraph (f)(1)(i) of this section becomes inaccurate in the following manner before consummation, the creditor shall ensure that the consumer receives corrected disclosures containing all changed terms in accordance with the requirements of paragraph (f)(1)(ii)(A) of this section:
(A) The annual percentage rate disclosed under § 1026.38(o)(4) becomes inaccurate, as defined in § 1026.22.
(B) The loan product is changed, causing the information disclosed under § 1026.38(a)(5)(iii) to become inaccurate.
(C) A prepayment penalty is added, causing the statement regarding a prepayment penalty required under § 1026.38(b) to become inaccurate.Also see 1026.19 (f)(2)(iii) for information on required corrected disclosures due to events occurring after consummation.
Hope this help!
I did a sample loan, with the loan amount of $102,000, purchase price of $80,000, cost of improvements (construction holdback shown on line K04 of CD) as $20,000, total closing costs of $3,000 and the borrower financing $2,000 of these fees. On the fee screen I listed $2,000.00 of the fees in the financed column and I listed the other $1,000.00 of the fees in the cash column. When I reviewed my CD, on page three of the closing disclosure is shows $1,000 cash to close from the borrower. In our software we have to break the fees in to the paid or financed columns for this to work. I hope this helps!
I have always been told when you have a new note you have a new loan, even if you keep the same loan number.
Follow up question. In the situation above if the original application says purchase and a lender collected monitoring information would you need to update the application at closing to say home equity and remove the monitoring information? I didn’t know if monitoring information goes on the purpose at the time of application or at the time of closing.
We have used Mercury to order appraisal for a few years. We like using them because of the double-blind feature and they verify the appraiser has a current appraisal license and is current on the National Appraisal Registry. Our back office, loan processors, orders the appraisal and communicates with the appraiser. We feel this helps the bank comply with the regulations on independence concerning appraisals.
We disclose this information in the “Terms and Conditions” under the “ACH and Wire Transfers” section. Hope this helps!
Do to the all the new requirements for hazard insurance we also purchased a blanket insurance policy. So we don’t have to monitor hazard insurance coverage after closing. We decided the cost of the policy was cheaper than hiring more staff to comply with the new requirements. Hope this helps!
I think it would depend on what disclosures you are referring to. Are they generic disclosures like “Member FDIC” “Equal Housing Lender” or disclosures depending on a specific transaction?
This is what I have in my notes, hope it helps.
Regulation Z 1026.15 – In a credit transaction in which a security interest is or will be retained or acquired in the consumer’s principal dwelling, each consumer whose ownership interest is or will be subject to the security interest shall have the right to rescind the transaction.
Truth in Lending Act (Law) 12 CFR 226.23 – In the case of any consumer credit transaction in which a security interest is or will be retained or acquired in any property which is used as a principal dwelling of the person to whom credit is extended, the obligor shall have the right to rescind the transaction.
