We made a residential mortgage loan to an unmarried woman, with her partner signing the mortgage only and not as an obligor on the note. Although the woman is the only party obligated on the note, the Closing Disclosure listed both her and her partner as “borrowers.” Does a non-borrowing co-mortgagor need to be listed as a borrower on the Closing Disclosure? If not, is this a problem? The loan already has closed.

No, we do not believe that a non-borrower should be listed as a borrower on the Closing Disclosure; this would be a technical violation of the TRID requirements. Having said that, we are not aware of any provisions in the TRID rules for curing this type of technical violation when the loan already has closed.

Regulation Z allows creditors to correct “non-numeric clerical errors” by sending a corrected Closing Disclosure within sixty days of the loan consummation. However, the borrower information provided in the Closing Disclosure does not fit the definition of a non-numeric clerical error. Consequently, we do not believe this error can be remedied with a corrected Closing Disclosure.

Nonetheless, we think it would be prudent to send the borrower a Closing Disclosure showing the correct borrower information so that she has the accurate information in her records and your bank can show that she was advised of the error.

For resources related to our guidance, please see:

Regulation Z, 12 CFR 1026.19(f)(1)(i) (“In a transaction subject to paragraph (e)(1)(i) of this section, the creditor shall provide the consumer with the disclosures required under § 1026.38 reflecting the actual terms of the transaction.”)

Regulation Z, 12 CFR 1026.38(a)(4)(i) (“For each transaction subject to § 1026.19(f), the creditor shall disclose the information in this section: . . . . Borrower. The consumer’s name and mailing address labeled ‘Borrower.’”)

Regulation Z, Official Interpretation, Paragraph 38(a)(4), Comment 4 (“Section 1026.38(a)(4)(i) requires disclosure of the consumer’s name and mailing address, labeled ‘Borrower.’ For purposes of § 1026.38(a)(4)(i), the term ‘consumer’ is limited to persons to whom the credit is offered or extended.”)

Regulation Z, 12 CFR 1026.19(f)(2)(iv) (“A creditor does not violate paragraph (f)(1)(i) of this section if the disclosures provided under paragraph (f)(1)(i) contain non-numeric clerical errors, provided the creditor delivers or places in the mail corrected disclosures no later than 60 days after consummation.”)

Regulation Z, Official Interpretation, Paragraph 19(f)(2)(iv), Comment 1 (“An error is considered clerical if it does not affect a numerical disclosure and does not affect requirements imposed by § 1026.19(e) or (f). For example, if the disclosure identifies the incorrect settlement service provider as the recipient of a payment, then § 1026.19(f)(2)(iv) requires the creditor to deliver or place in the mail corrected disclosures reflecting the corrected non-numeric disclosure no later than 60 days after consummation. However, if, for example, the disclosure lists the wrong property address, which affects the delivery requirement imposed by § 1026.19(e) or (f), the error would not be considered clerical.”)