Q Under the TILA-RESPA Integrated Disclose (TRID) requirements, must the description of a fee or charge be consistent between the Loan Estimate and Closing Disclosure?
A Yes. Regulation Z, § 1026.38(h)(4), sets forth the requirements for how creditors must describe or label origination charges, services the borrower did and did not shop for, and other costs on the Closing Disclosure. It states that these services and costs disclosed under § 1026.38(f) and (g) “shall be labeled using terminology that describes the item disclosed, in a manner that is consistent [emphasis added] with the descriptions or prescribed labels, as applicable, used for such items on the Loan Estimate pursuant to § 1026.37.” Further, § 1026.38(h)(4) states that “[t]he creditor must also list the items on the Closing Disclosure in the same sequential order as on the Loan Estimate pursuant to § 1026.37.” Comment -1 to § 1026.38(h)(4) reiterates the requirements regarding the consistency of terminology and the order of the charges.
The consistency in terminology aspect also extends to the written list of settlement service providers. Comment -3 to § 1026.19(e)(1)(vi) explains that the settlement service providers identified on this list “must correspond to the required settlement services for which the consumer may shop, disclosed under § 1026.37(f)(3).” The sample forms in Appendix H of Regulation Z demonstrate this approach, with the sample Loan Estimate H-24(B) and the sample Written List of Providers H-27(B) utilizing the same descriptions of fees and charges.
For more information, contact ABA’s Terry Hollinger.
Please note that this section is not a substitute for professional legal advice.
