Chapter 22 — Key Takeaways
The core claims
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TRID replaced four forms with two. The Good Faith Estimate and the initial Truth in Lending disclosure became the Loan Estimate; the HUD-1 Settlement Statement and the final Truth in Lending disclosure became the Closing Disclosure. Effective October 3, 2015. The two forms are deliberately built as a matched pair so a borrower can lay them side by side.
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The Loan Estimate is not merely an estimate. Certain disclosed figures are promises. If the actual charge exceeds the disclosure and the charge sits in the wrong bucket, the creditor pays the difference — not the borrower, not the settlement agent.
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"Business day" is defined twice, and Saturday is where the two definitions disagree. Get this wrong in one direction and you close early, which is a violation. Get it wrong in the other and you cost your borrower a day for nothing.
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A changed circumstance is not permission to change a number. It is permission to move a baseline — and only for the charges the reason for revision actually affected.
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Only three things restart the three-business-day clock: the APR becoming inaccurate, the loan product changing, or a prepayment penalty being added. Everything else is a corrected Closing Disclosure received at or before consummation.
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A lender that cannot document a valid changed circumstance eats the difference. That is the structure of the rule, not a penalty for breaking it.
The two definitions — memorize this table
| Timing rule | Definition | Does Saturday count? |
|---|---|---|
| Deliver/mail the Loan Estimate within 3 business days of application | general — creditor's offices open for substantially all business functions | usually no |
| The 7-business-day waiting period after Loan Estimate delivery | precise | YES |
| The 3-business-day receipt of the Closing Disclosure before consummation | precise | YES |
| The mailbox presumption of receipt (3 business days after mailing) | precise | YES |
| Rescission, where a right exists | precise | YES |
Precise definition: all calendar days except Sundays and the federal legal public holidays specified in 5 U.S.C. 6103(a). Sunday is never a business day under either definition.
The three tolerance buckets
| Bucket | What is in it | The test |
|---|---|---|
| Zero | the creditor's own charges (origination, points, underwriting, lock and lock-extension fees); services the borrower could not shop for (appraisal, credit report, flood determination, tax service); transfer taxes | the disclosed amount is the maximum; refund the entire increase |
| 10% cumulative | recording fees; services the borrower could shop for and obtained from a provider on the creditor's written list | the aggregate may exceed the aggregate disclosed by 10%; refund only the amount above the ceiling |
| Unlimited | services obtained from a provider not on the list; prepaid interest; property insurance premiums; escrow deposits; services the creditor does not require | no numeric test — but the estimate must still have been made in good faith |
The form does not tell you the bucket. Section C of the Closing Disclosure feeds two different buckets, and which one depends on whether the provider was on the written list.
The rules of thumb
- The day of delivery or receipt is day zero. Count forward from it; consummation may occur on the third business day.
- Mailing is not receipt. A mailed Closing Disclosure consumes roughly six business days, not three, unless actual earlier receipt is documented.
- Tolerance compares the Loan Estimate to the Closing Disclosure. The waiting period compares the Closing Disclosure to itself. Two different questions.
- Cure = refund + corrected Closing Disclosure, within 60 calendar days of consummation.
- Retention: 5 years for the Closing Disclosure and related documents; 3 years for other evidence of compliance with the Loan Estimate and Closing Disclosure requirements.
- Write the changed-circumstance reason down the moment you learn it, in the loan origination system, tied to the specific charge. Documenting after you re-disclose is not documentation.
The Linden Street numbers
| Loan Estimate issued | day 5 (application's six items completed day 5) |
| Revised Loan Estimate — rate locked 6.625% + 0.500 point | day 12 |
| Lock expires; 15-day extension at 0.250 point = \$914.38 | day 42 — LENDER PAID |
| Closing Disclosure issued and received | day 48, a Tuesday |
| Consummation | day 51, a Friday — Wed, Thu, Fri = 3 business days |
| Closing costs subtotal / prepaids and escrows | \$9,720.25 / \$4,406.09 |
| Total closing costs (J) | \$14,126.34 |
| Cash to close | \$25,376.34 — unchanged by the lock extension |
| 10% bucket: disclosed / ceiling / charged | \$1,835.00 / \$2,018.50 / \$1,957.00 — within, \$61.50 of room |
| Loan Calculations: Total of Payments / Finance Charge / Amount Financed | \$867,317.26 / \$507,662.60 / \$359,654.66 |
| APR / TIP | 7.253% / 130.512% (note rate 6.625%) |
Days 45 and 46 were a Saturday and a Sunday. Six calendar days of overrun bought three business days of work.
What you should be able to do Monday morning
Take any file on your desk, name the date the six application items completed, count the Loan Estimate deadline under the general definition, count the earliest closing date under the precise definition, open the disclosure package and confirm the written list of service providers is in it, and — for the file closing this week — run the Loan Estimate to Closing Disclosure comparison yourself, classify every change into its bucket, and call the borrower with the explanation before they call you with the question.