In the standard Closing Disclosure cash-to-close table, Closing Costs Financed changes from $0 in the Loan Estimate column to −$3,100 in the Final column. The Did this change? column is blank. Does this satisfy the comparison requirement?
Correct Answer
A) Non-compliant: the $3,100 change must be answered in that column
A. The required change statement cannot be left blank. The non-rounding difference requires a statement identifying the change. The explanation must indicate that closing costs were included in the loan amount, increasing that amount; numbers alone do not supply the required statement. Scope and exceptions: This addresses section 1026.38(i)(3), not every alternative disclosure format. Financed costs remain borrowed costs, not a discount. The omission alone does not establish whether other tolerance or waiting-period rules were violated. Source: Section 1026.38(i)(3)(ii)–(iii) — https://www.consumerfinance.gov/rules-policy/regulations/1026/38/
Why This Is the Correct Answer
A. The required change statement cannot be left blank. The non-rounding difference requires a statement identifying the change. The explanation must indicate that closing costs were included in the loan amount, increasing that amount; numbers alone do not supply the required statement. Scope and exceptions: This addresses section 1026.38(i)(3), not every alternative disclosure format. Financed costs remain borrowed costs, not a discount. The omission alone does not establish whether other tolerance or waiting-period rules were violated.
Why the Other Options Are Wrong
Option B: Non-compliant: the closing costs financed line may never change at all
The line is not categorically forbidden to change.
Option C: Compliant: the column is optional where the change favors the borrower
The requirement is not waived because financing reduces immediate cash needed.
Option D: Compliant: the $3,100 already shows in the figures themselves
The numerical columns do not replace the explanation.
Exam Tip
Disclose both the changed amount and the required explanation.
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