After the borrower receives the Closing Disclosure, the lender discovers an error that increases the borrower's APR by 0.25 percent. Under TRID, what must happen before closing can proceed?
Correct Answer
C) A revised Closing Disclosure must be provided and a new three-business-day waiting period begins
TRID requires a corrected Closing Disclosure and a fresh three-business-day waiting period when the disclosed annual percentage rate becomes inaccurate before consummation. Accuracy is measured by Regulation Z's APR tolerance: one-eighth of one percent for a regular transaction and one-quarter of one percent for an irregular transaction, meaning one with multiple advances or irregular payment periods or amounts. An increase of 0.25 percentage point on an ordinary loan exceeds the one-eighth tolerance, so closing waits until the borrower has received the revised disclosure and the new three-day period has run.
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