Escrow & Title
What is 'closing disclosure' timing requirement under RESPA and what happens if the deadline isn't met?
AA. The CD may be provided at the closing table with no advance timing requirement
BB. Lenders must provide the Closing Disclosure at least 3 business days before closing; if the CD is not provided in time, closing must be delayed—borrowers cannot waive this requirement except in genuine emergencies✓ Correct
CC. The 3-day requirement can be waived by the buyer in writing at any time
DD. Only the lender's copy of the CD must be provided 3 days before; the borrower's copy can be at closing
Explanation
RESPA requires the lender to provide the Closing Disclosure at least 3 business days before consummation (closing). If certain changes are made after the initial CD (increased APR, new prepayment penalty, changed loan product), a new 3-day waiting period begins.
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Key Terms to Know
Title Insurance
Insurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
ProrationThe division of ongoing property expenses (taxes, HOA dues, rents) between buyer and seller at closing based on their respective days of ownership.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
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