Q1: What is the timing requirement for the CD?
A1: The borrower must receive the CD no later than 3 business days before consummation (**For the purpose of TRID, JMAC defines consummation as the date the borrower signs the Note). This applies to both purchase and refinance transactions. For example, if the loan is scheduled to sign on Thursday, the borrower must receive the CD at least by the Monday before the signing.
**Note: Lenders are prohibited from providing a revised LE on or after the date on which the lender provides the CD.
Q2: What is the definition of consummation?
A2: Consummation means the time that a consumer becomes contractually obligated on a credit transaction, which is the date the Note is signed. (**For the purpose of TRID, JMAC defines consummation as the date the borrower signs the Note).
Q3: How is business days defined for the CD?
A3: For the CD, specific business days are defined as all days except Sundays and specific federal holidays.
Q4: If not delivered in person, when is the CD considered as received by the borrower?
A4: When the CD is not delivered in person, the borrower is considered to have received the CD 3 specific business days after it is delivered electronically or placed in the mail (unless evidence is provided demonstrating earlier receipt).
**Important Note: If the CD is delivered electronically via a document vendor that is compliant with the E-Sign Act and the borrower does not access the CD, then it’s not considered as received. The document vendor is required to update the delivery date to the date it is placed in the mail due to not being accessed electronically.
Q5: Who prepares the CD – JMAC or the settlement agent?
A5: JMAC will prepare the CD. JMAC will collaborate closely with the settlement agent to ensure both parties approve the final product. (On purchase loans, the settlement agent will prepare the Seller’s CD and provide JMAC with a copy.)
Q6: On purchase loans, who prepares the Seller’s CD?
A6: JMAC will have the settlement agent prepare the seller’s CD and provide a copy to JMAC.
Q7: Can the waiting period required after receipt of the CD be waived?
A7: JMAC does not approve receipt of the CD waiver.
Q8: Can the rescission period satisfy the 3-day waiting period?
A8: No, consummation occurs when the Note is signed, so the 3-day waiting period must be satisfied prior to the signing/closing.
Q9: When is the CD required to be re-disclosed?
A9: There are three categories of changes that require a revised CD to be delivered to the borrower:
1. Changes before consummation that require a new 3 business day waiting period:
· Disclosed APR becomes inaccurate
· Change in loan product (i.e. Fixed to ARM)
· Addition of a prepayment penalty
2. Changes before consummation which do not require a new 3 day waiting period:
· Costs change which do not cause the APR to become inaccurate (e.g. HOA due, escrow, attorney fee)
· Note: Although the waiting period was not reset, the borrower has the right to inspect the revised CD during the business day prior to consummation.
3. Certain changes which occur after consummation require issuance of a revised CD:
· Discovery of a recording fee paid by the consumer is different from the amount disclosed on the CD
Q10: Currently, we require a non-borrowing spouse (NBS) to sign the Final TIL at closing but they do not sign the HUD. Will the NBS be required to sign the CD?
A10: In a rescinded transaction, the CD must be provided separately to each consumer that has the right to rescind, so in this case, the NBS would need to sign. In transactions that are not rescindable, the CD may be provided to any consumer with primary liability on the loan. It is permissible for the lender to add signature lines, so JMAC may decide to require the NBS sign if vested on title or in a community property state, and this will be defined in future editions.