What Is a Closing Disclosure (CD)?
Before 2015, homebuyers were often hit with massive, surprise fees on the day of closing because the lending paperwork was confusing. To protect consumers, the federal government (via the CFPB) created the TRID rules and introduced the Closing Disclosure (CD).
The CD is a standardized, five-page document that tells the buyer exactly how much money they need to bring to the closing table. It details the loan amount, the exact interest rate, the estimated monthly payment (including escrow for taxes and insurance), and an itemized list of all closing costs, such as title insurance, appraisal fees, and attorney fees.
The Strict Three-Day Rule
Under federal law, the lender must deliver the Closing Disclosure to the buyer at least three business days before the closing date. This rule is absolute.
The purpose of this three-day waiting period is to give the buyer time to review the CD, compare it to the original Loan Estimate they received weeks earlier, and ask questions without feeling pressured by the seller or the closing agent. If the lender makes a massive change to the loan at the last minute (such as increasing the interest rate or changing the loan type from fixed to adjustable), the three-day clock completely resets, forcing the closing date to be delayed.
Seller's Closing Disclosure
While the buyer's CD is a massive, heavily regulated federal document generated by the bank, the seller also receives a Closing Disclosure. The seller's CD is generated by the title company and simply itemizes the seller's closing costs (such as real estate commissions, documentary stamp taxes, and the payoff of their old mortgage), calculating the exact net cash the seller will walk away with.
Related Terms
- Closing Costs — The specific fees itemized on page two of the CD
- Mortgage — The underlying loan that the CD summarizes
- Escrow — The impound accounts detailed on the CD for taxes and insurance
Barnes Walker Closing Services
Barnes Walker's attorney-led closing department meticulously prepares seller Closing Disclosures and closely collaborates with buyer lenders to ensure the three-day TRID rules are strictly followed, preventing any federal compliance issues from delaying the transaction. Request a legal inquiry for assistance.
Florida Law Reference
12 U.S.C. § 2601 et seq. (RESPA); Fla. Stat. § 627.7711
Real estate closings in Florida are governed by federal RESPA requirements and state title insurance regulations. Florida is a "title state" where closings are typically handled by title companies or attorneys.
Reviewed by the attorneys at Barnes Walker, Goethe, Shea & Robinson, PLLC