Understanding The Closing Disclosure (CD) - Mortgage Settlement Statement
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- เผยแพร่เมื่อ 30 ก.ค. 2020
- Understanding The Closing Disclosure - Mortgage Settlement Statement Explained! The Closing Disclosure or CD is part of the TILA/RESPA Ingegrated Disclosure rule or TRID. It is the companion to the Loan Estimate or LE and shows your final charges. In this video I will go into detail as to what each section means to match back to the LE to ensure you know what you are signing and explain the 3 day rule.
My name is Emmett Dempsey, and I am a Mortgage Broker and owner of Treasure Coast Mortgage, LLC in Port Saint Lucie, Florida. This channel is about financial education related to mortgage loans to help teach families how to buy a house in any housing market and build wealth with real estate.
I talk about mortgage rates and discuss general finance and real estate market news that moves interest rates that can affect you when buying a house. I help to show the home loan process so that any first time home buyer or experienced home buyer can learn more about purchase and refinance mortgages.
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Emmett Dempsey, Mortgage Broker/Owner NMLS 208522
Treasure Coast Mortgage, LLC NMLS 1958997
Company Address - 584 NW University Blvd, Suite 711 Port Saint Lucie, FL 34986
Equal Housing Opportunity - For licensing go to www.nmlsconsumeraccess.org
Its End of The Month, and hopefully you're closing on your new home! Check out this video about the CD. Thanks for watching and please like and subscribe!
Hi! Thank you so much for this video! I just want to ask, is it disclosed on the CD the amount payed to the broker by the bank?
@@nailedbyraquel7265 Yes is disclosed
@@emmettmortgage thank you so much for your answer! Would you tell me how I can find it ?
@@nailedbyraquel7265 It would be in Box A and read "Paid by Others" (L) for lender. Only a Broker has to disclose this. Non Depository Banks or Correspondent Lenders dont have to disclose what they make. Brokers do.
@@emmettmortgage thank you! I appreciate it! ☺️
Thank you so much! I don't know why it seems like they make these so overly complicated specifically for a first time buyer.
Glad it was helpful! Yes I completely agree. These forms were meant to simplify things, but can be a little complicated. I try my best to walk my clients through each form at every step.
Thank you so much this video was exactly what I needed
Glad it was helpful!
You explained this topic very well!
Thanks!
u did a great job explaining thank you.
You are welcome!
Thank you for your explanation
You are welcome
This really helped!
You'e welcome! Thanks for the comment!
THANKS
You're welcome!
Wow, thanks for basically reading exactly what it says on paper. I was looking for a more behind the scenes and what to look for.
Youre welcome. 😜. Yeah I realize its a bit basic but in a TH-cam video it has to be generic for compliance reasons.
Everyones loan is different so I do a personal LE video tailored to them.
What other behind the scenes info can I help with?
Can u make something on HELOC ..and initial closing disclosure comparison between refi and purchase..why pages look different
Well HELOCs are held to different rules. What I didn't expand on is the LE/CD is only required on closed end forward mortgages. A HELOC is an open ended loan and can use the old Good Faith Estimate (GFE) form with looser compliance rules.
Hi Emmett - do you have a guide that explains any issues you’ve run into post-closing and remedies to solving them with disclosures to the borrower (I.e. restitution for an oversight, what happens when you don’t issue lender credits for a tolerance cure when disclosing over the legal limit, critical figures that should never change, and how to disclose changes to your borrowers clearly, legally, and timely)?
The CFPB has guides about the CD and LE:
files.consumerfinance.gov/f/documents/cfpb_kbyo_guide-loan-estimate-and-closing-disclosure-forms_v2.0.pdf
We were brought in to close and we thought we were closing and funding that day. To our dismay the realtor didn’t explicitly tell us this was not the case. We were pissed because we’ve bought a house but never sold one. To think you’re getting a payout like that and having to ultimately wait a week in a wet funding state was such a headache.
YIKES! Sorry to hear that!
Hello there. Iam in process of trying to buy a house but the Loan Estamate or CD there"s lots of fees iam doubtful about and another thing where its says (HOMEOWNERS INSURANCE PREMIUM) for 12 months the whole amount is added in the section that says (borrower-paid AT CLOSING) for $2018.00 Homeowners insurance per month is $168.17 witch i find to high. They can not charge me the whole year at closing date right?
Hey Daniel. I would love to help. You can email me at emmett@tcmortgage.com and we can talk more about this.
Yes the 1st year of homeowners insurance is due at closing. Then the escrow is built to pay the NEXT years insurance when it comes due.
Yes going into escrow they will
What is the lender credit and where it is applied ? Because my loan disclosure doesn’t make sense with this fee ! Thanks
The lender credit is in Section J - Lender Credits. A lender credit is just that; credit from a lender. Usually that credit is given in exchange for a higher rate.
This video did not increase my understanding. Talking too fast everything was a blur.
I am sorry and thank you for the feedback. I do realize I talk fast. You can email me any questions at emmett@tcmortgage.com if you have any specific questions.
I feel the same. Lol blah blah that's all I heard.
So the estimated escrow payment is a one time fee, after your first monthly payment it will disappear right
The escrow payment is typically a part of your total monthly payment. It goes towards your property taxes and insurance.
No. If you choose to escrow your required taxes and insurance, you need to build the initial account balance. It changes depending on the time of year, but generally its 3 months of insurance and 4 months of taxes. In Florida, taxes are due in November, and your insurance is due on your purchase anniversary. The escrow needs enough months of payments to have 14 payments when an anniversary rolls around (12 months to pay the bill and 2 month buffer). It does not go away.
In a process of buying a home and I just received closing disclosures
Congrats!
When do you the cd on a new construction
Same process generally. As soon as you can expire the 3 day wait
Just got my CD, right before 5p of course, and its missing my seller's concession. How long is this error gonna set me back? Thanks - A Dempsey from another mother.
Hey Mr. Dempsey. 😀 Well was it your initial CD?
@@emmettmortgage yes it was. I've been under contract since 8/24, provided all requested documents/conditions to broker/lender w/in 24hrs if not sooner. So it's a little discouraging when I finally get the CD & it has errors. On top of that my seller is in "time of the essence" mode and was actually fined $2500 for missing their closing date on their new house due to this closing taking forever. Pretty frustrating.
Why is the "down payment/funds from borrower" added to the closing costs(J) rather than being subtracted from it?
Is the deposit the same thing as the down payment?
Why is the closing costs higher than cash to close?
The deposit is the Ernest money paid to the title company. Not the down payment.
Did you figure this out?
The only thing I am confused about is the county taxes, what does the to mean? And some contracts show an X or something here and I do not understand what this means?
Hey Keera. Can you elaborate? You can email me at emmett@tcmortgage.com and we can dig into the details. County property taxes are standard for most purchases unless you are 100% disabled and you get some tax relief.
@@emmettmortgage Hi, I forgot to mention, I am studying for the license test. I am not someone applying for a loan etc. just wanted to understand the contract
@@keerahenderson1286 Oh OK. Good luck!
Thank you for this video! I just received my CD yesterday. I was a bit confused though they originally told me that my cash to close would be 2000 more but on my CD is a lot less. Not complaining but when I asked my lender about this they said that they were still waiting on the attorneys fees to come back. Why would the attorney fees not already be included in the CD?
Well the LE is not a perfect document. There are items that are credits that show up as charges. For instance, the appraisal. On the Loan Estimate the fees shows even if you paid it with a credit card. On the CD, it will show as POC (Paid Outside Closing) and hence be deducted. So it "appears" like it went down, when really it adjusted to the reality. Another item is the Aggregate Adjustment and Seller prorations for escrow. Credits that are due to the borrower, that aren't reflected in the LE, but show up on the CD.
What if the loan processor contacts you after you’ve closed and asks you to sign a CD and backdate it two months?
The final CD you closed with?
@@emmettmortgage not the final. The initial CD when the rate was locked. We signed the final CD at closing, however we did get the final CD 2 days before close vs 3. They sent it 5/23 and we closed 5/25. For the initial one they asked us to backdate They explained they were required to send within 3 days and that sounds a lot like TILA/RESPA regulatory compliance. I don’t feel comfortable backdating - especially backdating that far.
What if the demand feature is checked?
Generally its for a balloon payment where the lender can call the loan due. Here is the link to the CFPB website about it:
www.consumerfinance.gov/ask-cfpb/what-is-a-demand-feature-what-does-it-mean-if-the-demand-feature-is-checked-off-on-my-closing-disclosure-en-1997/#:~:text=The%20Closing%20Disclosure%20has%20a,early%20repayment%20of%20the%20loan.&text=The%20lender%20can%20make%20this,reason%20or%20for%20no%20reason.
What’s the Survey fee under section C???
The survey is a top down drawing of your property line. Its a sketch of the boundaries of your property. You will need that to build a fence or a pool.
Hey Emmet, can you do a video on prepaid finance charges? Am I in fact getting less credit extended to me than the loan amount I requested for?
Hmm. It sounds like you may have gotten an FHA or VA loan?
@@emmettmortgage conventional! Loan amount $425k, but the actual credit being extended is ~$422k (amount financed). I don’t understand why I would be repaying the full note amount, when the actual amount being financed is lower than that
If you could email me the document I can take a look. emmett@tcmortgage.com@@TheSc00pz
So is it NOT always the case that borrower signs the closing disclosure and three days later they close? Because I signed my CD on Tuesday this week, and today is Friday, I still haven’t heard a single thing from my lender. No word on what’s to follow.
Did you go finance a boat?
You are correct. The Initial CD is so you CAN close in 3 days IF your loan is ready to. Our goal is to get that CD out and signed so there are no holdups if the closing date is tight. It has been on several occasions so an early CD is in your best interest.
@@iishyxvietxboyii1 nope, did nothing
@@ponleusoreyaa It’s been a month. Did you close on the loan?
@@iishyxvietxboyii1 i didn’t. They never called me back. Also, I truly believe the VA didn’t allow the new terms. I’m glad the loan did not go through because I would have regretted it. My current mortgage payment is much lower than what it would have been after the refinance. The rate would have increased by nearly 2%
Hi sir any opening in initial disclose and cd process or reissue i will worked under movement mortgage 4.5 year experience..i have own laptop so will give work from home opportunity
Sorry no
Can you please do a video on the "paperwork/documents" one would receive in a cash out refinance? I guess I should subscribe first, then check your video playlist first . light bulb ...on !
Hey Porsha. Receive from me in the lending side or from title?
How can I get that? When my loan is approved I cannot see anything about that.
The Closing Disclosures? Its not at loan approval generally, unless you are sent the document early. If you were issued an LE on your loan a CD is in your future. 😀
For everyone complaining that he talks too fast, you can slow the playback speed of the video.
That being said I have a question. What are aggregate adjustments?
Thanks
Sorry folks. I do talk fast and I do my best to slow it down. To your question, this adjustment is to ensure the lender does not collect too much money for your escrows and violates RESPA compliance.
Thanks for the informative video... Have a query.. If the ufmip on an fha loan is 4000 $ and the borrower pays 1000 from his pocket and gets 3000 added to the loan, what value will be mentioned in the closing costs section as a mortgage premium?
3000
What is the aggregate adjustment?
The Real Estate Settlement Procedures Act (Regulation X) protects consumers when they apply for and have a mortgage loan. Section 1024.17, entitled “Escrow Accounts” limits payments to escrow accounts upon creation. Specifically, “[a]t the time a servicer creates an escrow account for a borrower, the servicer may charge the borrower an amount sufficient to pay the charges respecting the mortgaged property, such as taxes and insurance, which are attributable to the period from the date such payment(s) were last paid until the initial payment date. The “amount sufficient to pay” is computed so that the lowest month end target balance projected for the escrow account computation year is zero (-0-) (purposefully omitted). In addition, the servicer may charge the borrower a cushion that shall be no greater than one-sixth (1/6) of the estimated total annual payments from the escrow account.” 12 CFR 1024.17 (c)(1)(i).
The simple way to think about this is that a lender must ultimately collect escrow amounts at closing for each month they will not have a payment, plus a two (2) month cushion. For example, if a closing were occurring in March, a lender would likely collect six (6) months of taxes at closing. One month for each month they won’t have payment (January, February, March and April), plus a two (2) month cushion. The aggregate adjustment is typically a credit provided to the buyer on the settlement statement, which means the amount collected exceeded what was allowed pursuant to the above regulation.
I’m the state of FL can a lender let you know your final approval before you physically receive a CD.
Yes
Which section shows your net profit from the deal?
Whos profit? The seller?
Slow down, I guess I will replay.
Yeah I hear that a lot...I know I talk fast. 😀 I will work on it and record an update
Just wanna know why there is initial CD then final CD prior to closing...
Just to give an idea and to confirm if the borrower want to go ahead with the deal. Beacuse the borrower mostly first time home buyer doesn't know about the additional charges that is attached towards the Home Mortgage.🤗
@@nasib27 thank you. I able to close my firt time home buyer experience, cause i received the final CD on the day of the closing, right at the closing table... 😂... thanks again
The initial CD starts the "3 day clock" so you can close the loan on time. I really wish they would remove that, especially on refinances. But that is the TRID law, and we have to have the CD signed at least 3 days before consummation of the mortgage.
Hello
Hello
You just read through the form lol explain what it means bro haha
Reading through the form explains what it means. I talked about what it means as a Settlement Statement.
you didn't explain anything
How do you figure? I explained every box of the CD. What would you suggest I explain better?
Don’t even bother. He doesn’t explain. He literally reads it as it is.
The point of this is a deep dive line by line of this form. Most families don't buy homes every day, so many clients have told me they appreciated this level of detail. Do you have a specific question or suggestion?
No just a comment. There was no “deep dive” you’re full of crap. People save your time
@@Wealthsquad-zq2njSo youre just a troll with nothing constructive to add? This form has a finite number of sections all of which I went over. Again what else do you think should have been done?
You talk to fast
Yes I know. I do my best to slow down and will keep that in mind.
“Too?”
Why are you constantly swallowing hard or seeming like you've got a pint of flem in your throat. This is a legitimate question that isn't looking for a "like" or thumbs-up response.
Phlegm
Sorry man. This was 3 years during COVID lock downs. Who knows? 😀 Ill keep it in mind for future videos.