What Is A Closing Disclosure Statement?
In this video Deirdre P Brown gives an overview of what a Closing Disclosure Statement is and the TRID three day rule.
Hello this is Deirdre Brown your settlement agent serving Maryland, DC and Virginia. Today I'm going to answer the question of what is a closing disclosure statement. Effective October 3rd 2015 the closing disclosure statement replaced the HUD-1 settlement statement that we had been using for many years. The closing disclosure statement only replaces the HUD-1 when there is a loan involved in the relevant transaction. If this is a cash transaction you will still use and see the HUD-1 settlement statement.
There are two types of closing disclosure statements we have one for the seller and one for the buyer. The seller's closing disclosure statement is prepared by the title company and is normally issued to the seller and the listing agent, two to three days before settlement. The buyer's closing disclosure statement is prepared by the lender and is required by law to be given to the buyer at least three business days before settlement. There are some exception. If the transaction is a home equity line of credit transaction or it was a reverse mortgage or if the loan is for a mobile home or some type of structure that's not attached to the land then the three-day rule does not apply.
The three day window will restart if one of three things happen. The annual percent rate increases, there is a change in product (you move from FHA to a conventional or from a conventional to FHA) and if a prepayment penalty is added to the loan product then the buyer has an additional three days to determine if they want to move forward with the transaction.
if you have any additional questions please reach out to me at closewithdee.com