Monday, August 10, 2015

Closing Disclosure: Deep Dive – Page Three

Jonathan Foxx
President & Managing Director
Lenders Compliance Group

This is the fifth article of a six-part series devoted to TILA-RESPA Integration Disclosure. Although the series, structured as White Papers, was initially established with four parts, I have added a fifth Part and a sixth part to discuss additional features of the Closing Disclosure. In this fifth part, I will discuss Page Three. The sixth and final part of the series will provide an outline of Page Four and Page Five. Through a review of important highlights, I invite you to join me in a deep dive into the intricate features of the Closing Disclosure.

In the first article, I discussed the mission of TILA-RESPA Integration and the Loan Estimate (LE).[i] The second article introduced and treated the numerous features of the Closing Disclosure (CD).[ii]  These two articles (viz., on the Loan Estimate and Closing Disclosure, respectively) were accompanied by separate, detailed tables to be used for certain itemized categories and action requirements. In the third article, I provided the salient features of the Loan Estimate, in considerable detail.[iii] In the fourth article, I took you through Page One and Page Two of the Closing Disclosure.[iv]

I would suggest that you read all the articles in this series in order to better understand the TILA-RESPA Integration Disclosure (TRID) rule promulgated by the Consumer Financial Protection Bureau (“CFPB” or “Bureau”).

The series on TILA-RESPA is meant to be informative, though it is not intended to be comprehensive. It is always prudent to research areas of particular interest with respect to the regulatory mandates. If assistance is needed, Lenders Compliance Group is a resource, and we recently established two proactive paths toward a TRID knowledgebase:

(1) We established the TEAM TRID™ task force,[v] a relatively inexpensive, cost-effective way to get TRID integration implementation done efficiently (viz.,; and importantly

(2) We established,[vi] an entirely free online service, manned by our task force, to assist people with their questions about TRID. We want to listen to their compliance needs (viz.,

Please consider my analysis carefully. Follow along with a copy of the Closing Disclosure. I will provide, where helpful, some information as Suggested Guidance. Allow several hours to consider this explication. And as I have admonished all along, make notes, raise questions, and seek answers from competent compliance professionals!

Hopefully, you will have read the previous four articles. Now we will continue a detailed review of the third page of the Closing Disclosure. As indicated above, a forthcoming sixth article will further elucidate the Closing Disclosure analyses for Page Four and Page Five.

Page Three

TILA requires the Closing Disclosure to contain two tables:[vii] “Calculating Cash to Close” and “Summaries of Transactions.”[viii] For transactions without a seller, the creditor or settlement agent may substitute a “Payoffs and Payments” table for the Summary of Transactions table and place it before the alternative Calculating Cash to Close table.[ix]

Calculating Cash to Close Table

General Description

TILA requires the creditor to disclose the “cash to close;” that is, the total amount of cash or other funds the consumer must provide at consummation, and how the creditor determines that amount. The “Calculating Cash to Close” table generally mirrors the format of, and updates the amounts shown on, the “Calculating Cash to Close” table in the Loan Estimate. The purpose of this table is to provide the consumer with a three-business-day window before closing to make arrangements to have the necessary funds available for the consummation of the transaction.

The table on the CD includes a row not included on the Loan Estimate, labeled “Closing Costs Paid Before Closing,” and additional information under the column with the subheading “Did this change?”[x]

Standard Calculating Cash to Close Table

The standard “Calculating Cash to Close” table consists of four columns and nine rows. The columns are for the (1) components of cash to close, (2) the estimated amounts of cash to close (from the Loan Estimate) and its components, (3) the cash to close and its components without rounding (Final), and (4) a “Did this change” (Yes or No).