Q: Who is responsible for providing the Closing Disclosure to a seller in a purchase transaction?
A: The settlement agent is required to provide the seller with the Closing Disclosure reflecting the actual terms of the seller’s transaction. (§ 1026.19(f)(4)(i))
The settlement agent may comply with this requirement by providing the seller with a copy of the Closing Disclosure provided to the consumer (buyer) if it also contains information relating to the seller’s transaction. (Comment 19(f)(4)(i)-1)
However, the TILA-RESPA Rule affords flexibility in providing the seller those disclosures that relate to the seller’s transaction, and does not require that the seller receive the same version of the Closing Disclosure provided to the customer. Therefore, the settlement agent may also provide the seller with a separate disclosure, including only the information applicable to the seller’s transaction from the Closing Disclosure (§ 1026.38(t)(5)(v) or (vi), as applicable). (See form H-25(I) of appendix H to Regulation Z for a model form).
Note, in a purchase transaction that involves a subordinate-lien loan, if the Closing Disclosure for the first-lien loan has all the required disclosures related to the seller, a settlement agent may provide the seller with only the first-lien Closing Disclosure (that relates to the seller’s transaction reflecting the actual terms of the seller’s transaction) instead of also providing the seller with the Closing Disclosure for the subordinate-lien loan. (Comment 19(f)(4)(i)-2). See section 13.9 below for information about simultaneous subordinate-lien loans.