The TRID deadline is only 1 month away! October 3rd is an important date in our industry, and information and preparedness are key to successful compliance with TRID. Below are some quick and easy tips on the 3-day rule.
- The borrower must receive the Closing Disclosure at least 3 days before consummation/closing.
- A borrower WILL NOT be able to waive the 3 day waiting period for review of the Closing Disclosure.
- Closing Disclosures can be delivered by email (preferred) or by regular mail. Mailed disclosures will add 3 days to the waiting period.
- Sunday and Federal holidays are not counted in the 3 day waiting period. Saturdays do count in the waiting period.
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Caution! These items can require creditors to provide a new Closing Disclosure and an additional three-business-day waiting period after receipt:
- Increase in APR, more than 1/8 percentage point on fixed rate loans, or 1/4 percent point on adjustable rate loans.
- The addition of a pre-payment penalty.
- Changes in program type (example: going from a fixed interest rate to an adjustable interest rate)
Some quick definitions can be helpful when understanding this rule. First, the starting point for determining when the three-day period starts is the day of consummation. Consummation is the day the consumer becomes contractually obligated on the loan (i.e., the day they sign the note). This is typically the same day as closing (12 C.F.R. §§ 1026.2(a)(13) & 1026.38(a)(3)(ii)).
Once you have the right starting point then you need to count backwards. The three-day rule requires the counting of “business days,” which are “all calendar days except Sundays and the legal public holidays specified in 5 U.S.C. 6103(a), such as New Year's Day, the Birthday of Martin Luther King, Jr., Washington's Birthday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day and Christmas Day.”
Remember! It is not a 72-hour requirement, but rather a day requirement so you do not need to know the time that closing will take place