What is the potential liability or ramifications for providing a different CD to the seller than has been shared with the buyer? Meaning, if the lender delivers the CD to the buyer but the settlement agent delivers the CD to the seller, what if they are not the same document?

That’s actually allowed, under the rule there is a provision that, I think it was a response to a lot of public comments that were citing state privacy requirements for the borrower’s and seller’s information, allows lenders and settlement agents to separate the borrower’s and seller’s information onto two different CDs, so the borrower doesn’t get the seller’s and the seller doesn’t get the borrower’s private information.

Now, some numbers actually do have to be the same between the two different disclosures, so, for example, the proration, or the seller credit, those are things that will be on both the borrower’s and the seller’s forms. If that information is the same between the borrower’s and the seller’s CD there is no violation from providing the rest of the information separately, but if that information that will actually have to be the same on both the borrower’s and seller’s CD is actually different, if they don’t reconcile, that is a potential disclosure violation, on the borrower’s CD or the seller’s CD, because one of those numbers is likely inaccurate.

So, for example, if the seller is providing a $5,000 dollar lump sum credit, and on the seller’s CD it shows that $5,000 lump sum credit but on the borrower’s CD it shows a $4,000 lump sum credit, that would be a violation on the borrower’s CD that would actually be easily identifiable by an examiner or somebody looking at the loan file because the number would be different on the seller’s CD as well as probably the settlement agent’s settlement statement.

Answered By: Richard Horn