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Ask the Compliance Experts: January 2018


For some strange reason our company does not want us to issue the CD more than 7 days before the borrower signs their loan doc’s. Is there some regulation regarding the 7 days or is this a strange co. policy?


Your company’s policy is likely intended to address what is commonly referred to as the “black hole” in the TRID rule. The black hole refers to situations where the lender may not be able to use a Closing Disclosure (CD) to reset fee tolerances. It occurs when the CD has been issued to the borrower and the consummation date will be 7 or more days in the future. If a loan is in the black hole, the lender may not increase fees to the consumer beyond allowable tolerances even where there is a valid change of circumstance. The industry as well as trade associations have requested that the CFPB address the black hole issue through rule making or other guidance. The most recent Final Rule punted on this issue and instead of finalizing, issued a proposal for comment. If finalized as proposed, many believe the black hole may be filled, but as of now, no adjustments have been made to the rule nor will additional guidance be issued that would alleviate the issues associated with the black hole until CFPB publishes their next Final Rule.


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