Page 13 - Homeowners Manual - Santa Cruz County

‘KNOW BEFORE YOU OWE’ MORTGAGE DISCLOSURE TERMS

Closing Disclosure – The five-page Closing Disclosure, also referred to as CD, must be provided to the
consumer three business days before they sign their loan documents. The Closing Disclosure details all of the
costs associated with their mortgage transaction.

Consummation – Consummation is not the same thing as closing or settlement. Consummation occurs when the
consumer becomes legally obligated to the creditor on the loan, not, for example, when the consumer becomes
contractually obligated to a seller on a real estate transaction.

Loan Estimate – A three-page Loan Estimate (LE) must be provided to the consumer no later than three
business days after they submit a loan application for most mortgages. The Loan Estimate provides information
about key features, costs and risks of the mortgage loan for which the consumer is applying.

Redisclosure – For covered transactions under the TILA-RESPA Integrated Disclosure (TRID) Rule and
under very specific circumstances, the Loan Estimate and/or the Closing Disclosure may be revised and
delivered to the consumer.

Three-Day Review Period – For transactions covered under the TRID Rule, the creditor is generally
required to ensure that the consumer (borrower) receives the Closing Disclosure no later than three business
days prior to the consummation of the loan.

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