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27 Apr

Does a Creditor Need to Share Closing Disclosures with Third Parties?

Does a Creditor Need to Share Closing Disclosures with Third Parties?

Often times as a settlement is coming down to the wire, there are pressures to share the Closing Disclosure with a realtor or broker involved in the transaction.  Why would they need this information?  They also have obligations to report certain data fields to close their listing and that information is on the Closing Disclosure.  Sometimes, their purchase contracts go so far as to include language that it can be shared.  But should the creditor share that information?

The quick answer is “No.”

The issue isn’t TRID – it’s GLBA & Privacy.  GLBA prohibits the sharing of non-public personal information (NPPI) without the consent of the owner of the information. CFPB did not propose guidance or a model form in the “TRID” revisions for information sharing because it would not be germane to Truth in Lending.   There was a significant discussion in the Preamble to the Amendments issued August 11, 2017 which cited that the TRID rule provides methods whereby information could be separated for borrower and seller disclosures, with the seller’s disclosure not including the personally identifying information of the borrower.

To routinely release a Closing Disclosure to third parties, a creditor would need to revise their Privacy Notice and implement an opt-out form – an option many institutions don’t want to do.  So how else might one handle this issue?  GLBA allows disclosure with the express consent of the consumer who has provided NPPI – the institution could implement a borrower consent form just for Closing Disclosure sharing.  And nothing prohibits a borrower or seller from sharing their Closing Disclosure directly with third parties who request it from them.

Finally, ALTA discusses the issue at their blog.  They note that one of the reasons behind the ALTA Settlement Statements was this very issue – to provide useful information to title insurance and settlement companies.  They also recommend that realtors obtain copies directly from the seller or buyer.

So, there you have it!  Best practice is not to share but if you do, do so within the confines of the Privacy regulation.

For additional information contact Evelyn at