Quick Answer
The Closing Disclosure is the final cost statement delivered 3 business days before the reverse mortgage closing appointment — showing all actual (not estimated) fees, the final principal limit, the interest rate, and the final proceeds calculation — and must be compared to the Loan Estimate to confirm no unauthorized fee increases.
- Delivered 3 business days before the closing appointment.
- Shows final actual costs — not estimates.
- Compare each line to the Loan Estimate for any changes.
- Contains the final interest rate (rate-locked or current market).
- Shows the final net proceeds calculation after all payoffs and costs.
- Call your CRMP before signing if anything in the CD is different from the LE.
Key Facts
| Topic | Key Fact |
|---|---|
| Delivery timing | 3 business days before closing appointment |
| Purpose | Final verification of all costs before signing |
| Comparison required | Compare to Loan Estimate — identify any changes |
| Interest rate | Final locked rate or current market rate |
| Net proceeds | Final calculation after all mandatory payoffs, costs, and set-asides |
| Cost tolerance | Some categories have 0% tolerance (cannot change), others 10% |
| If CD differs from LE | Contact your CRMP immediately before the closing appointment |
| Signing requirement | Acknowledgment of receipt required — 3-day waiting period enforced |
Detailed Explanation
The Closing Disclosure (CD) replaced the HUD-1 Settlement Statement in October 2015 as part of the CFPB's TRID reforms. It uses the same standardized format as the Loan Estimate, making direct comparison between the estimated costs (on the LE) and the final costs (on the CD) straightforward. The 3-day delivery window before closing gives borrowers time to review the CD and raise any questions before sitting down to sign.
Certain fee categories on the Closing Disclosure have zero tolerance for increase from the Loan Estimate — meaning they cannot increase at all between the LE and the CD. These include the origination fee, transfer taxes, and fees paid to the borrower's chosen providers. Other categories have a 10% aggregate tolerance — meaning total charges in that category cannot increase more than 10% from the LE. If charges exceed tolerance limits, the lender must issue a refund at or before closing.
The final net proceeds calculation on the CD reflects all actual costs, the exact interest rate, and any payoff amounts confirmed by payoff statements received during underwriting. This number may differ from the initial consultation estimate — because the appraisal came in at a different value, the payoff amounts were higher or lower than estimated, or third-party costs differed from initial estimates. The CD net proceeds number is what the borrower will actually receive.
Jay's standard practice is to review the Closing Disclosure with every client by phone before the closing appointment. The pre-closing CD review covers: confirming the interest rate matches expectations, confirming net proceeds match the underwriting approval, confirming payoff amounts are correct, and identifying any line items that differ from the Loan Estimate. Borrowers who arrive at the closing appointment having already reviewed the CD with their CRMP sign with confidence rather than confusion.
Jay Zayer, CRMP — 18 Years Experience
The CD review call is the one I am most insistent about because the closing appointment itself is not the right place to identify discrepancies. A notary is not a mortgage advisor. The escrow officer at the title company can explain what the documents say but cannot negotiate fee changes. If there is a problem with the CD — a fee that changed without proper notice, a rate that is different from what was locked — it must be caught and resolved before the closing appointment, not at the closing table.
Who This Is Right For
This may be a good fit if:
- Every reverse mortgage borrower who has received the Closing Disclosure and wants to understand how to review it
This may NOT be the right fit if:
- There is no situation where reviewing the Closing Disclosure would be inappropriate
Common Misconception
Myth: The Closing Disclosure is just a formality and does not need careful review.
Fact: The Closing Disclosure is the final statement of all actual costs and must be compared to the Loan Estimate before signing. Fee increases above tolerance limits require lender refunds.
Source: CFPB: TRID Closing Disclosure rules
Authoritative Sources
- CFPB: Closing Disclosure guide — consumerfinance.gov
- HUD: HECM closing documentation — hud.gov
- NRMLA: Closing Disclosure review — nrmlaonline.org
People Also Ask
When do I receive the Closing Disclosure?
3 business days before the closing appointment. If you do not receive it by then, contact your loan processor immediately.
What should I compare on the Closing Disclosure to the Loan Estimate?
Compare each fee category line by line. Any increases above the applicable tolerance limits (0% for origination, 10% aggregate for some third-party fees) should be questioned.
Can fees increase between the Loan Estimate and Closing Disclosure?
Some fees cannot increase at all (origination fee, transfer taxes). Others can increase up to 10% in aggregate. Increases above tolerance limits require a lender refund.