How do you deal with closing disclosure errors that involve third-party fees or services? (2024)

FAQs

How do you deal with closing disclosure errors that involve third-party fees or services? ›

If you find any errors or changes in the closing disclosure that involve third-party fees or services, you should contact the lender or the title company as soon as possible. Depending on the nature and the source of the error, they may be able to correct it or explain it to you.

If you find an error in one of your mortgage closing documents, contact your lender or settlement agent to have the error corrected immediately. Common errors in your documents can be as simple as a misspelled name or a wrong number in an address, or as serious as incorrect loan amounts or missing pages.

When a post-consummation event requires a corrected Closing Disclosure, the creditor must deliver or place in the mail a corrected Closing Disclosure not later than 30 calendar days after receiving information sufficient to establish that such an event has occurred.

An error is considered clerical if it does not affect a numerical disclosure and does not affect other requirements imposed by the regulation. Example: If the Closing Disclosure identifies the incorrect settlement service provider as the recipient of a payment, then the error would be considered clerical.

The requirement for the additional three business-day waiting period once the Closing Disclosure has been delivered applies under three specific scenarios: 1) an inaccurate APR, which violates the established tolerances; 2) the addition of a prepayment penalty; or, 3) a change in the loan product.

The lender is primarily responsible for its accuracy and timely delivery to the borrower, while the title agent assists in gathering specific information and may handle both the buyer and seller's side of the disclosure.

The corrected Closing Disclosure should reflect that actual terms of the transaction and the actual costs associated with the settlement. It must be mailed no later than 30 days after the credit union discovered the event had occurred.

The creditor is required to provide the consumer Closing Disclosure at least three business days before consummation.

Exceptions to the Closing Disclosure Requirement

Exceptions include: Reverse Mortgages: Borrowers receive a HUD-1 Settlement Statement and a final Truth in Lending Disclosure instead. Home Equity Lines of Credit (HELOCs): Typically, borrowers receive a Truth in Lending Disclosure but not a Closing Disclosure.

The closing disclosure and resetting fees

Note that a revised closing disclosure must still be provided within three business days of receiving information sufficient to establish that a changed circ*mstance or other event triggering event has occurred.

How do you correct a clerical error? ›

For clerical errors, explain what error you believe was made in the space provided on the form. Also state how it should be corrected. For legal errors, include the case law or legal codes that prove an error was made. Explain why you believe the Judge mistakenly applied the law.

For purposes of this subsection, the term “clerical error” means a nonnegligent, inadvertent, or typographical mistake in the preparation, assembly, or submission (electronically or otherwise) of the manifest.

The court can correct a clerical mistake, an oversight, or add something that was accidentally left out of an order. Examples of clerical mistakes include: Spelling mistakes. Math mistakes.

Substantive changes are less likely but can certainly still happen even after initial signing. Any significant alterations do require the lender to issue an updated Closing Disclosure with an additional mandated 3-day waiting period before closing.

Despite receiving the Closing Disclosure, loan approval is not guaranteed, and unforeseen circ*mstances can lead to denial, such as changes in financial status or property issues discovered during underwriting.

You'll want to compare the Closing Disclosure side by side with your Loan Estimate. Most of the numbers and terms should be similar, but they may differ because of the time that's passed between the Loan Estimate and the final costs reported on the Closing Disclosure.