The Closing Disclosure That Changed the Deal
Marcus is buying a $260,000 home with 10% down and a $234,000 loan. His Loan Estimate shows a 6.25% rate, $5,900 in closing costs, and a $4,000 seller concession. Closing is set for Friday. On Wednesday the lender sends a revised Closing Disclosure showing a 6.50% rate, $1,800 in discount points that were not on the Loan Estimate, and $6,850 total closing costs. The APR increased. Marcus's agent says the seller concession will cover the difference and urges everyone to sign Friday so the movers stay on schedule. The seller's closing date is firm because the seller is buying another home the same day. Marcus has not received a revised Loan Estimate.
1. Can the transaction close Friday as scheduled?
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No. A revised Closing Disclosure that increases the APR triggers a new three-business-day waiting period before consummation. Receiving it on Wednesday is too late for a Friday closing.
The buyer cannot be asked to waive the waiting period merely because the movers are scheduled or the seller has a same-day purchase. A waiver is limited to a genuine personal financial emergency, explained in writing, and this is not that situation.
The judgment call: the agents should immediately seek a written closing extension and notify the lender and title company. Pressuring Marcus to sign a Closing Disclosure he received two days earlier creates a federal disclosure violation and a contract problem.
2. Who is responsible for the $1,800 in discount points and the increased costs?
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Discount points paid to the lender are generally zero-tolerance charges. If they were not disclosed on the Loan Estimate and there is no valid changed circumstance, the lender must cure the difference - typically by refunding or crediting the amount - rather than simply passing it to Marcus at closing.
The increased rate and APR also require a corrected Closing Disclosure and explanation. The $4,000 seller concession may help with allowable buyer closing costs, but it does not cure a lender tolerance violation. Conventional seller-concession limits also depend on loan type, down payment, and investor guidelines; at 10% down the concession may be within limits, but that must be verified rather than assumed.
Marcus should not sign the Closing Disclosure until the lender explains the points, the APR change, and the tolerance cure.
3. What should the agents do to protect their clients and the contract?
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The agents should:
- Put a written extension in place before Friday and notify all parties that the lender's revised disclosure prevents consummation.
- Ask the lender for a corrected Closing Disclosure showing any tolerance cure and the final cash-to-close.
- Document the reason for delay and preserve the buyer's financing contingency and earnest-money position.
- Address the seller's same-day purchase with the seller's agent - not by rushing the buyer.
- Advise Marcus to compare the final CD to the Loan Estimate and to ask about the rate lock and points.
A buyer's agent who says "the seller concession covers it" is confusing who pays with whether the charge was legally disclosed. Those are separate issues.