A covered mortgage is scheduled to consummate on Friday. Underwriting cleared the file the preceding week. Assume no legal public holidays that week and no emergency waiver. By which day must the consumer receive the initial Closing Disclosure?
Correct Answer
A) By Tuesday of the consummation week
A. The consumer must receive the Closing Disclosure by Tuesday for the stipulated Friday consummation. With no intervening Sunday or legal public holiday, Wednesday, Thursday and Friday are the three business days following Tuesday receipt. The rule concerns receipt, not simply sending the document. Underwriting clearance does not start this waiting period. Scope and exceptions: This assumes no permitted emergency waiver and an ordinary covered transaction. Mailing without evidence of actual receipt adds a separate receipt presumption. June 19 must not be silently treated as a nonholiday. Source: 1026.19(f)(1)(ii)(A), (iii), comment 19(f)(1)(iii)-1 — https://www.consumerfinance.gov/rules-policy/regulations/1026/19/
Why This Is the Correct Answer
A. The consumer must receive the Closing Disclosure by Tuesday for the stipulated Friday consummation. With no intervening Sunday or legal public holiday, Wednesday, Thursday and Friday are the three business days following Tuesday receipt. The rule concerns receipt, not simply sending the document. Underwriting clearance does not start this waiting period. Scope and exceptions: This assumes no permitted emergency waiver and an ordinary covered transaction. Mailing without evidence of actual receipt adds a separate receipt presumption. June 19 must not be silently treated as a nonholiday.
Why the Other Options Are Wrong
Option B: On the day underwriting cleared the file
The underwriting-clearance date is not the receipt deadline.
Option C: At consummation on Friday
Receipt at consummation omits the required waiting period.
Option D: By Thursday of the consummation week
Thursday receipt leaves only one business day before Friday consummation.
Exam Tip
Separate delivery, receipt and consummation when counting disclosure time.
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