TRID – Closing Disclosures Timeline & “3 Day Review” Period Explained

This blog is one of the most viewed pages on our website, so I thought I’d update it and send it out again because there is clearly a lot of interest.

People always want to know the exact day we can close when we prepare a Closing Disclosure (CD) and send loan documents to title.

What Is A Closing Disclosure Form?

As a reminder, a Closing Disclosure is a form that sets out all of the updated fees and terms associated with a borrower’s loan.

Lenders can prepare CDs at any time in the process, but since the fees they disclose are so heavily regulated, most lenders have a few checks in place before a CD can be sent:

• Loan is at least conditionally approved
• Appraisal is in and any value issues are addressed
• Insurance is in, or home is confirmed to be insurable
• Lender has collected invoices for any loan-related third-party fees, such as credit report or HOA fees

A Closing Disclosure is typically sent electronically for the borrower’s e-signature.

Borrowers cannot sign loan documents until three business days have passed from the date of the CD acknowledgment (or e-signing).

If any loan-related fees are added after the CD is sent, a new CD may need to be issued, potentially starting a new waiting period.

This is why most lenders do not issue CDs until they know what all of the fees or closing costs will be with relative certainty.

Some lenders issue CDs early in the process and they protect themselves (or the need to re-disclose) by simply overstating some fees.

We avoid this practice because it fosters confusion and it can be misleading.

WAITING PERIODS

If the Closing Disclosure is acknowledged on a Thursday, for example, the borrower can sign loan docs on the following Monday; Friday would be Day #1; Saturday would be Day #2; and Monday would be Day #3 (borrower can sign on Day #3).

The table below sets out the acknowledgment and earliest possible signing days.

Closing Disclosure Calendar

Lastly, federal holidays and Sundays do not count as business days.

We typically fund loans 1-2 business days after a borrower signs their loan documents.

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 1197176, NMLS# 310167