Who Handles Preparation and Delivery of Seller’s Closing Disclosure?
March 24, 2016
To comply with the TILA-RESPA Integrated Disclosures rule, both the buyer and seller must receive Closing Disclosures that provide details of the transaction, according to Richard Horn, a former CFPB attorney who led the TRID final rule and the design of the forms, and has since formed the law firm Richard Horn Legal PLLC.
“In sale transactions, the rule places the responsibility on the settlement agent to provide the seller with a Closing Disclosure relating to the seller’s transaction no later than the day of consummation,” Horn said. (See § 1026.19(f)(4).)
Settlement agents cannot use an ALTA Settlement Statement or other disbursement document in place of the Closing Disclosure. There is not a “receipt” requirement, which means that technically a settlement agent is not required under TRID to confirm receipt. “But it may be a best practice to obtain such confirmation—a signature on the Closing Disclosure at closing, for example,” Horn added.
The rule recognizes that in some instances, the settlement agent may meet this obligation by either providing the seller with a seller-only Closing Disclosure or a combined buyer/seller Closing Disclosure, according to Steve Gottheim, ALTA’s senior counsel.
“This can be done by either the lender or the settlement agent depending on the agreement between those parties,” he added. “Similar to lenders being liable for delivery and accuracy of the buyer’s Closing Disclosure, settlement agents are liable for delivery and accuracy of the seller’s Closing Disclosure. If a lender decides to provide the seller’s Closing Disclosure, the settlement agent must be aware of this process and ensure accuracy.”
Contact ALTA at 202-296-3671 or communications@alta.org.