Under TRID, a revised LE may be used to reset tolerances “[i]n transactions involving new construction, where the creditor reasonably expects that settlement will occur more than 60 days after the [LE is] provided” but only “if the original [LE] state[s] clearly and conspicuously that at any time prior to 60 days before consummation, the creditor may issue revised disclosures.” (12 CFR § 1026.19[e][3[iv][F]) The instructions to the LE provide the following in regards to this “clear and conspicuous” disclosure:
“In transactions involving new construction, where the creditor reasonably expects that settlement will occur more than 60 days after the provision of the loan estimate, at the creditor’s option, a clear and conspicuous statement that the creditor may issue a revised disclosure any time prior to 60 days before consummation, pursuant to § 1026.19(e)(3)(iv)(F).” (Ibid.§ 1026.37[m][8])
The actual language of such statement is not mandated, but the Official Staff Commentary does set forth a model statement which, if used, “satisfies the requirements set forth in § 1026.19(e)(3)(iv)(F) that the statement be made clearly and conspicuously on the disclosure.” (12 CFR Pt. 1026, Supp. I, Paragraph 37[m][8] – 1)
This model statement, when this Comment was originally proposed, was as follows:
“You may receive a revised Loan Estimate at least 60 days prior to consummation” (79 FR 64346 [2014])
However, when this Comment was finalized, it was changed to the following:
“You may receive a revised Loan Estimate at any time prior to 60 days before consummation” (80 FR 8778 [2015])
Currently, our versions of the LE use the proposed language. While we do not believe that there is a compliance issue with the current language (since any statement can be used, as long as it meets the criteria set forth under 12 CFR § 1026.37[m][8]), we will be revising it to match the current language in the Commentary, in order for the “safe harbor of compliance” extended under 15 USCA § 1640(f) to apply.
These changes will take effect immediately. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.
DR 227270
TW 179299