Sometimes loan terms or fees change before closing, but after the lender has provided the Closing Disclosure (CD) to the borrower. Lenders should be aware that the TRID rules do not permit a revised Loan Estimate (LE) to be provided after the CD has been provided.
If a CD has been provided then the borrower must receive a revised CD that reflects any such changes. For example, if the loan amount changes after the CD is provided then a revised CD must be provided showing that change; a revised LE is not permitted.
When the lender provides the borrower with a revised CD, it would be a best practice for lender to fully document the reason why the revised CD was provided, for example a changed circumstance or a borrower requested change.
If a revised CD is provided, a new three (3) day waiting period may or may not be required. A new 3-day waiting period before closing (from the date the borrower receives the revised CD) is required only if 1) the APR varies by more than 1/8 of one percentage point, OR 2) a prepayment penalty is added, OR 3) the loan product has changed. If none of those 3 conditions apply, then the revised CD may be received by the borrower at or before closing.
If a revised CD is necessary and an additional 3-day waiting period is not required, it would be a best practice to provide the borrower with the revised CD before closing and/or clearly inform them of the changes before closing in order to help assure that the borrower is aware of and understands the changes that were made.
Please check with your compliance officer and/or investor to determine if they have any additional requirements or overlays regarding providing a revised CD.
Also note that the regulations permit the borrower to inspect the CD (or the revised CD) one business day before closing if they ask to do so. This mirrors the existing HUD-1 rules - the borrower had the right to inspect the HUD-1 document one business day before closing if they request it.
We reiterate for emphasis that in no event should the lender re-disclose the LE once a CD has been provided to borrower. If you have any questions, please email firstname.lastname@example.org.