We provide separate Closing Disclosures (CDs) to the buyer and seller for residential mortgage transactions. We list standard seller charges (such as the seller’s attorney’s fee, final water bill, seller’s transfer taxes, seller’s recording fees, and miscellaneous title fees) on the seller’s CD under Loan Costs or Other Costs, as applicable. Do we need to disclose those seller charges on the buyer’s CD? In other words, does page 2 of the seller’s CD need to be identical to page 2 of the buyer’s CD? We have received a finding on this in the past, but our third-party auditors and investors have not required this.

Yes, we believe that the buyer’s CD must list all loan costs and other costs paid by the seller on page two, as outlined in Regulation Z, even if you issue a separate CD to the seller. However, we do not believe that page two of the seller’s and buyer’s CDs need to be identical, because Regulation Z does permit you to omit certain buyer’s costs from page two of the seller’s CD.

The CFPB has issued guidance making it clear that the CD provided to a buyer (also referred to as the consumer) must include “seller-paid Loan Costs and Other Costs . . . on page 2 of the consumer’s Closing Disclosure even if separate Closing Disclosures are provided to the seller and consumer.”

Additionally, the seller’s CD may omit costs paid by the buyer on page two. Similarly, the buyer’s CD may omit the summary of the seller’s transactions located on page three.

For resources related to our guidance, please see:

CFPB, TILA-RESPA Integrated Disclosure FAQs, Providing Closing Disclosures to Consumers #1 (May 14, 2021) (“If separate Closing Disclosures are provided to the seller and the consumer, does the TRID Rule require that seller-paid Loan Costs and Other Costs be disclosed on page 2 of the consumer’s Closing Disclosure? Yes, the TRID Rule requires seller-paid Loan Costs and Other Costs to be disclosed on page 2 of the consumer’s Closing Disclosure even if separate Closing Disclosures are provided to the seller and consumer. A creditor does not comply with the TRID Rule if it discloses seller-paid Loan Costs and Other Costs only on page 2 of the Closing Disclosure provided to the seller. 12 CFR § 1026.38(f) and (g); 1026.38(t)(5)(v) and (t)(5)(vi). See Section 11.7 of the Small Entity Compliance Guide for more information about the modifications allowed when separating the seller and consumer’s Closing Disclosures.”)

CFPB, TILA-RESPA Integrated Disclosure Rule: Small Entity Compliance Guide, v. 5.2, page 80 (May 2018) (“Seller-paid Loan Costs and Other Costs are required to be disclosed on the consumer’s Closing Disclosure, regardless of whether a separate Closing Disclosure is provided to the seller. Seller-paid real estate commissions are one example of seller-paid costs that may not be omitted from and must be included on the consumer’s Closing Disclosure. (§ 1026.38(g)(4); Comment 38(g)(4)-4). Additionally, non-commission real estate brokerage or agent charges for services to the seller or consumer are required to be itemized separately, with a description of the service and an identification of the person ultimately receiving the payment. (Comment 38(g)(4)-1 and -4; § 1026.2(a)(11) and (a)(22)).”)

Regulation Z, 12 CFR 1026.38(t)(5)(v) (“Separation of consumer and seller information. The creditor or settlement agent preparing the form may use form H-25 of appendix H to this part for the disclosure provided to both the consumer and the seller, with the following modifications to separate the information of the consumer and seller, as necessary: . . .”)

Regulation Z, 12 CFR 1026.38(t)(5)(v)(A) (“The information required to be disclosed by paragraphs (j) and (k) of this section may be disclosed on separate pages to the consumer and the seller, respectively, with the information required by the other paragraph left blank. The information disclosed to the consumer pursuant to paragraph (j) of this section must be disclosed on the same page as the information required by paragraph (i) of this section.”)

Regulation Z, 12 CFR 1026.38(t)(5)(v)(B) (“The information required to be disclosed by paragraphs (f) and (g) of this section with respect to costs paid by the consumer may be left blank on the disclosure provided to the seller.”)

Regulation Z, 12 CFR 1026.38(k) (“Summary of seller's transaction. Under the heading ‘Summaries of Transactions’ required by paragraph (j) of this section, a separate table under the subheading ‘Seller's Transaction,’ that includes the following information and satisfies the following requirements: . . .”)