A consumer has timely received the initial Closing Disclosure for a covered non-timeshare mortgage, showing $27,400 cash to close. Before consummation, a new $5,000 seller credit reduces that amount to $22,400. No inaccurate APR, loan-product change or added prepayment penalty results. What correction and waiting-period treatment applies?
Correct Answer
D) Provide a corrected Closing Disclosure received at or before consummation; this change does not start a new three-business-day wait
D. Correct the disclosure without restarting the waiting period for this change. $27,400 − $5,000 = $22,400, so the earlier cash-to-close figure needs updating. None of the three specified restart conditions occurs under the question's assumptions. Scope and exceptions: The initial waiting requirement still applies. The consumer must also be allowed to inspect the known corrected items during the preceding business day. If the credit produces an APR inaccuracy under the applicable rules, the excluded restart condition must be reassessed. Source: Section 1026.19(f)(2)(i)–(ii); comment 19(f)(2)(i)-1.i — https://www.consumerfinance.gov/rules-policy/regulations/1026/19/
Why This Is the Correct Answer
D. Correct the disclosure without restarting the waiting period for this change. $27,400 − $5,000 = $22,400, so the earlier cash-to-close figure needs updating. None of the three specified restart conditions occurs under the question's assumptions. Scope and exceptions: The initial waiting requirement still applies. The consumer must also be allowed to inspect the known corrected items during the preceding business day. If the credit produces an APR inaccuracy under the applicable rules, the excluded restart condition must be reassessed.
Why the Other Options Are Wrong
Option A: Reissue and restart the 3 business days, as the cash to close has moved
Not every cash-to-close adjustment requires a new wait.
Option B: Reissue and restart the 7 business days that apply to a closing disclosure
Seven business days is not the corrected-CD waiting rule.
Option C: No reissue is owed, since a decrease can never harm the borrower here
A favorable change still requires an accurate disclosure.
Exam Tip
A corrected Closing Disclosure and a restarted waiting period are different decisions.
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