The Closing Disclosure (CD) must be received by the borrower at least three business days before consummation on most transactions. Issuing the CD late, or issuing a revised CD that triggers a new waiting period, is one of the most common causes of last-minute closing delays.
The Three-Business-Day Rule
Consummation is the date the borrower signs the note and mortgage, not the disbursement date. Three business days before consummation means the CD must be delivered three business days prior. Delivery by email or electronic methods is accepted if the borrower has consented to electronic delivery in writing. If mailed, three additional calendar days are added to the required lead time, for a total of six business days from the mailing date.
What Triggers a New CD and New Waiting Period
Only three specific changes require a new three-business-day wait after a CD is issued: (1) the APR increases above the TRID tolerance (0.125% for fixed, 0.25% for ARMs); (2) the loan product changes, such as from fixed to ARM or from 30-year to 15-year; or (3) a prepayment penalty is added after the initial CD. Every other change can be reflected on a revised CD signed at closing without restarting the wait.
Changes That Do Not Require a New Wait
- ✦Changes to closing costs that do not affect APR.
- ✦Seller credit adjustments.
- ✦Purchase price changes.
- ✦Hazard insurance premium changes.
- ✦For these, a revised CD can be issued and signed at the closing table without delay.
Aria can confirm which changes require a new three-day wait and which do not, helping MLOs avoid unnecessary closing delays on live transactions. Ask at vicariointel.com.
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