A borrower receives the Closing Disclosure and notices the loan has a prepayment penalty that was not disclosed on the Loan Estimate. Under TRID, what must happen?
Correct Answer
B) A revised Closing Disclosure must be issued and a new three-business-day waiting period must begin because the addition of a prepayment penalty is a significant change
Adding a prepayment penalty is one of three changes that triggers a new three-business-day waiting period under TRID (along with APR increases above the tolerance threshold and changes to the loan product). A revised Closing Disclosure must be provided.
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