Is it OK to re-disclose a corrected APR after loan-closing?

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Question:

In post-closing review, we noticed a loan’s APR is understated outside of tolerance. Can we just send a new disclosure showing the correct APR to fix this inadvertent error?

Answer:

No, no, and NO! No matter how much your lender wants to re-disclose this problem away, you absolutely, 100% cannot do this. The APR disclosed at loan closing, and accepted by the borrower when they signed the loan documents, is now the truth of the loan. You must make reality match the disclosure, by giving cash to the borrower to make the loan’s calculated APR paid match what you told them it would be. There is no way around this. The Truth in Lending Act mandates such restitution, and failing to take this corrective action could lead to civil, criminal, or regulatory penalties.

Alarmed at this? Join the upcoming webinar “Yikes! The APR or APY is WRONG…Now What?!” on May 18, 2023 to learn more!

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Learn more about Rebekah Leonard’s, Yikes! The APR or APY is WRONG…Now What? webinar.