XYZ mortgage company has mailed a closing disclosure to a consumer. When does the waiting period prior to closing officially begin?

The waiting period prior to closing officially begins on the third business day after the closing disclosure is mailed. This is in accordance with the regulations set forth by the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA), which emphasize the need for borrowers to have adequate time to review the closing disclosure before finalizing the mortgage transaction.

The rationale behind a three-business-day waiting period is to ensure consumers are given enough time to understand the terms of the loan, compare it with their initial loan estimate, and ask any questions they may have. This is intended to protect the consumer and promote informed decision-making.

While the date the closing disclosure is mailed or the next business day could be considered as points in the timeline, the official countdown for the waiting period is specifically designed to start three days after the disclosure is sent. The day when a completed loan application is received does not directly impact the timing of the waiting period for the closing disclosure.