TRID – Agent’s duty to review Closing Disclosures

QUESTION:  I represent a buyer. I have a closing scheduled later in the week. When I called the closing attorney to request copies of the Closing Disclosures for the buyer and seller, I was told that the attorney could not, or would not, share those documents with me. I am concerned that I may be subject to discipline if I don’t review those documents. What should I do?

ANSWER:  We have heard similar complaints from many brokers since the new rules promulgated by the Consumer Financial Protection Bureau (the “CFPB”) went into effect for loan applications received on or after October 3, 2015. Those rules are commonly known as the TILA/RESPA Integrated Disclosure (or “TRID”) Rules.

Although the TRID Rules do not limit the sharing of the new Closing Disclosures, some lenders are taking the position that there is personally identifiable information in the Closing Disclosures and that, therefore, other federal laws prohibit the lender from sharing this information with third parties without the consent of the borrower. To address this concern, new authorization language was added to paragraph 6(d) and 8(b) of the Offer to Purchase and Contract (Standard Form 2-T). This language authorizes the Buyer’s lender, the parties’ real estate agent(s) and the closing attorney to provide both parties’ Closing Disclosures, as well as the settlement statement and disbursement summary, to the parties and their real estate agent(s).

We have heard that some lenders do not consider the authorization language in Form 2-T to be sufficient and are instructing their closing attorneys not to send the Closing Disclosures to the parties’ brokers. This creates a potential problem for brokers in North Carolina.

The Real Estate License Law states that a broker may be subject to discipline for “failing, at the time a sales transaction is consummated, to deliver to the broker’s client a detailed and accurate closing statement.”  G.S. 93A-6(a)(14) states that if a closing statement is prepared by an attorney, a broker may rely on the delivery of that statement. However, the broker “must review (that) statement for accuracy.”

In their course materials for the 2015-2015 General Update class, the Real Estate Commission has acknowledged that a broker cannot review what he or she is not given. The course materials contain the following language: “[A] broker’s duty to provide a party with a copy of the settlement statement is satisfied if the broker assures that the closing attorney-settlement agent has provided a copy of the Closing Disclosure to the party.”

Our suggestion is that brokers should continue to request the Closing Disclosures from the closing attorney in every transaction. Brokers should be prepared to point out the express authorization language in paragraphs 6(d) and 8(b). If a closing attorney refuses to provide the Closing Disclosures, brokers should document their request for those disclosures, and insist that the attorney confirm in writing that the Closing Disclosures have been provided to the parties themselves.