APR was wrong on a TRID loan. Do we send a corrected post-closing CD to the borrower?

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Question:

An auditor just told us we have an APR violation on a TRID loan, and we need to make restitution to the borrower. Don’t we need to send a corrected Closing Disclosure too?

Answer:

What a great question! This concept is frequently misunderstood (or not understood at all). TRID rules require a corrected post-closing disclosure when something is found to be inaccurate on the CD. However, you can have an APR calculation go wrong, without it affecting any of the items on the CD. To reiterate: an APR error does not equal a TRID error. If the only thing “wrong” on the CD is the APR, you must honor that APR! The disclosed APR is the truth of the matter, and you must provide restitution. You would not issue a corrected CD, because there is simply nothing to correct on it.
Surprised? You need to tune into the upcoming webinar: “APY and APR Accuracy (Bonus! Using the FFIEC Calculator on TRID Loans)” on May 23, 2024 to get all the facts!