Good afternoon,

A revised LE was issued and the following day the CD was issued. The borrower then requested a waiver to the3 day waiting period based on a financial emergency. The waiting period was waived. The loan closed within 2 days of issuing the final CD. Does the timing on the revised LE, less than 4 days prior to closing, cause this loan to fall out of compliance?

Not IMO. It appears you provided the LE & CD in the proper sequence and I don't see their request for a waiver affecting the timing sequence.

I would be more concerned about: The borrower then requested a waiver to the3 day waiting period based on a financial emergency.........The loan closed within 2 days of issuing the final CD.

What was so important they couldn't wait one more day?

The seller was walking away and retaining their down payment. The issue, we are being told, is not the reason for the waiver, but the timing on the LE.

They are out of their minds. That is not a financial emergency and whoever is the reviewer should be focusing on that issue. Poor planning is not an emergency.


The waiver is where your risk is. The fact that the customer later waived the CD period has absolutely nothing to do with an issuance of a LE and its timing.

Thank you, I will certainly bring that to their attention. Is there too much ambiguity around financial emergencies?

There's a lot more to this story than was shared here.
What happened that closing got delayed to the nth hour?
That's where your problem is.

curious what valid CC precipitated the revised LE to be needed too.

Interest rate was reduced and points were increased.

19(f)(1)(iv) Consumer's waiver of waiting period before consummation.

1. Modification or waiver. A consumer may modify or waive the right to the three-business-day waiting periods required by § 1026.19(f)(1)(ii)(A) or (f)(2)(ii) only after the creditor makes the disclosures required by § 1026.19(f)(1)(i). The consumer must have a bona fide personal financial emergency that necessitates consummating the credit transaction before the end of the waiting period. Whether these conditions are met is determined by the facts surrounding individual situations. The imminent sale of the consumer's home at foreclosure, where the foreclosure sale will proceed unless loan proceeds are made available to the consumer during the waiting period, is one example of a bona fide personal financial emergency.

Losing your house due to a foreclosure is a financial emergency - putting a roof on that was blown off in a storm is a financial emergency.

Buying a new piece of property is not a financial emergency.

Thank you. I have raised this issue and await their response. All 3 of you agree the issue is not the LE but the waiver.

there's only one time you MUST redisclose the LE and that's when you lock the rate via a signed written rate lock agreement.
If you got one when you reduced the rate and increased the points then yes, you had to redisclose the LE.

but that still doesn't explain why the closing was pushed off to the point that the seller was going to walk. what held up getting to closing in time to meet what I assume was on the Offer to Purchase as the closing date?

QUESTION: Did the bank get a copy of the purchase agreement? If so, the lender should have been aware of the deadline for closing. If not, why did the bank not require the purchase agreement copy?
OBSERVATION: If time was an issue, the lender could have used the CloD to play the role of the revised LE, so the CloD could have been provided a day sooner.

The lender did have the purchase agreement. I don't know what delayed the closing. Yes, it appears the CD would have been a better option. I am still waiting to hear back from compliance.

Tagging on to this. We have a contract with closing date of 06/03. The realtors asked some time back if it would be possible to move the closing date up inwhich the LO replied that if we had everything we needed and loan approved we'd be happy to. Well, they did an addendum moving it to 05/20 but did not give that to us until this morning. That leaves 2 days. The sellers are adamant they will not extend and they will not close after the 20th.

I feel this does constitute a financial emergency in that the buyers will lose the house, lose their deposit, sacrifice a locked rate if they have to start over, etc. The regulation is less than helpful on a sale situation as the only example they give applies to a refinance, not a purchase.

Opinion or anyone who has allowed a "short closing"?

but did not give that to us until this morning

"Poor planning on your part does not constitute an emergency on my part."

IMHO you do not have a basis for the waiver. Any financial emergency is between the buyer and their Realtor.

Now with that said if the bank wants to accommodate the buyer then that is a risk decision.

I get what Dan's saying...at the same time, the poor planning sounds like it was on the realtor's part, not the borrower's part, unless i'm misunderstanding. I guess what i'm getting at is: it sounds like the buyer's have a financial emergency that was caused by their neglectful realtor. The fact that it wasn't the bank's fault seems sort of beyond the point to me right now.

Those are just my current thoughts......Dan (or others) may convince me otherwise.

Definitely on the Realtors.

That's sort of what i'm getting at......as long as the negligence isn't on the buyers themselves, it seems sort of beside the point WHOSE fault it is.....the buyers now have a financial emergency that they themselves did not cause. I don't see why it wouldn't meet the criteria given in the regulation.

That's my thoughts, RJ. Thanks.

as long as the negligence isn't on the buyers themselves

Were they not responsible for insuring the necessary information was provided to the bank? If they did not follow-up with their Realtor then that's on them.

Losing an investment or purchase opportunity due to poor timing is not a financial emergency, however as I said above if the bank wants to accommodate the buyer then that is a risk decision for them to make.

The consumer must have a bona fide personal financial emergency that necessitates consummating the credit transaction before the end of the waiting period. Whether these conditions are met is determined by the facts surrounding individual situations. The imminent sale of the consumer's home at foreclosure, where the foreclosure sale will proceed unless loan proceeds are made available to the consumer during the waiting period, is one example of a bona fide personal financial emergency. Each consumer who is primarily liable on the legal obligation must sign the written statement for the waiver to be effective.

I am sorry raitchjay, since when does not purchasing a property involves a financial emergency? If this was not the fault of the buyer, then the buyer gets their attorney involved (and I bet you dollars to donuts they do not have one) and they sue the seller and the seller's realtor or whoever failed to let the lender know the new closing date. This is a business deal that has gone bad and not a financial emergency.

They give ONE example of a financial emergency...i think the term is ill-defined. But as i implied above....i was just sharing thoughts. I don't have strong feelings actually.

As RJ said, they gave one example that doesn't even apply to anything other than a refi. This is NOT the fault of the buyer or the FI. The Realtors dropped this ball and the buyer is invested in this. The seller's are doing EVERYTHING they can do to make this fall apart so they can put back on market to raise the price.

Yes, they can get a lawyer and sue, but in the meantime they lose their [substantial] EMD, survey, appraisal, inspection, etc.], cost which would cause them not to be in a position to just move on and find a different home. Yes, I consider this bonafide and financially-relative. It may be a risk to us, yes, but we have no record of abusing the normal requirements, not even during 2020 and it's shortened by one day....so they still had more than 50% of the time to review...I'm not afraid to defend this.

Poor timing for a purchase or investment opportunity is never a financial emergency for the waiving the consumer's right under the regulation.

If they brought in the purchase agreement and other necessary papers today to purchase a property at 25% of it's value but the deal is they have to close tomorrow or they lose the purchase opportunity...would you waive the waiting period?

The Realtors some time back

It's basically the same situation, they changed the closing timing and it was their responsibility along with the seller and buyer to get the information to the bank in a timely manor. Their failure to do so, and the buyer losing their investment because of it, is not a financial emergency.

https://www.academybank.com/blog/personal-banking/savings/5-types-financial-emergencies

Here are a few examples of things that are not financial emergencies:

Planning a wedding
Attending a wedding
Purchasing birthday or holiday gifts
Taking a vacation
Putting a down payment on a home
Remodeling your home voluntarily
Replacing non-essential electronics
There are a few reasons none of the above examples qualify as financial emergencies: they’re either not unexpected, don’t impact your health, or they don’t impact your ability to earn income -- or a combination of all three.

One additional point to why IMO this does not constitute a financial emergency for the buyer.

Changing the closing date was not an "unplanned" event on the buyer's part. They had to agree to it by signing the revised purchase agreement.

Y'all must not deal directly with buyers very often. Most have no clue. Yes, the Realtors were negligent. I won't put that responsibility on the borrower.

The examples above, particularly the one in red, doesn't really apply in my opinion. That sounds like a situation where you are cash-out refinancing in order to have money to PUT a downpayment on property. Not money already put out in good faith. I would agree that example is NOT a financial emergency of any sort.

"If they brought in the purchase agreement and other necessary papers today to purchase a property at 25% of it's value but the deal is they have to close tomorrow or they lose the purchase opportunity...would you waive the waiting period"?

Of course not.